Eingereicht von Daniel Semper
Angefertigt am Institut für Organisation und globale Managementstudien
Erstbeurteiler / -beurteilerin Prof. Giuseppe Delmestri
Zweitbeurteiler/ -beurteilerin Prof. Werner Auer-Rizzi
Mitbetreuung Prof. Royston Greenwood MARKET CATEGORY May 2017 DYNAMICS AND STATUS RE-POSITIONING
Dissertation zur Erlangung des akademischen Grades Dr.rer.soc.oec. im Doktoratsstudium Sozial- und Wirtschaftswissenschaften
JOHANNES KEPLER UNIVERSITÄT LINZ Altenberger Straße 69 4040 Linz, Österreich www.jku.at DVR 0093696
I hereby declare that the thesis submitted is my own unaided work, that I have not used other than the sources indicated, and that all direct and indirect sources are acknowledged as references.
This printed thesis is identical with the electronic version submitted.
Linz, 22. May 2017
Table of Contents
1. INTRODUCTION ...... 1
1.1. THE THEORETICAL LENS ...... 3
1.2. METHODS ...... 9
1.3. CONTRIBUTIONS ...... 10
1.4. STRUCTURE ...... 11
2. THEORY ...... 12
2.1. MARKET CATEGORIES, INSTITUTIONS AND COGNITIVE MAPS ...... 13
2.2. ALTERNATIVE VIEWS ON CATEGORIES: STRATEGY VS. RESPONSES ...... 18
2.3. CATEGORY STRUCTURES ...... 22
2.3.1. HORIZONTAL EXPANSION ...... 22
2.3.2. VERTICAL ORDERING ...... 23
2.3.3. STATUS DYNAMICS ...... 26
2.4. AUTHENTICITY OF CATEGORIES ...... 27
2.5. STIGMATIZED CATEGORIES ...... 32
2.6. CATEGORY DYNAMICS ...... 35
2.7. THE ROLE OF THE PROFESSION IN THE THEORIZATION OF CHANGE ...... 38
2.8. GAPS IN THE LITERATURE AND RESEARCH QUESTION ...... 42
3. METHODOLOGY ...... 48
3.1. DATA COLLECTION ...... 49
3.1.1. INTERVIEWS ...... 52
3.1.2. ARCHIVAL DATA ...... 54
3.1.3. OBSERVATIONS ...... 57
3.2. DATA ANALYSIS ...... 58
3.3. TRUSTWORTHINESS ...... 60
4. RESEARCH CONTEXT ...... 64
4.1. A SHORT OVERVIEW OF THE HISTORY OF AUSTRALIAN WINE ...... 64
4.2. PENFOLDS GRANGE ...... 68
4.3. CASELLA’S YELLOW TAIL ...... 73
4.4. THE ROSEWORTHY COLLEGE ...... 76
4.5. AN ECONOMIC OVERVIEW OF THE AUSTRALIAN WINE INDUSTRY ...... 78
4.6. THE SOCIAL AND CULTURAL ENVIRONMENT ...... 85
5. FINDINGS ...... 89
5.1. AUSTRALIA AND ITS COLONIAL PAST ...... 89
5.2. STRIKING NEW PATHS ...... 95
5.3. CREATING AND CELEBRATING THE MYTH OF SCIENCE AND PROGRESS ...... 102
5.3.1. CELEBRATING THE GRANGE ...... 107
5.3.2. CELEBRATING THE YELLOW TALE...... 110
5.3.3. TAKING PRIDE IN SCIENCE ...... 113
5.3.4. DEMOCRATIZATION OF WINE DRINKING ...... 115
5.4. A FEELING OF SUPERIORITY TOWARDS THE OLD WORLD ...... 118
5.4.1. SHOWCASING SCIENCE AND TECHNOLOGY ...... 125
5.4.2. PARALLEL NARRATIVES OF TRADITION AND MODERNITY ...... 126
5.5. SUMMARY ...... 139
6. DISCUSSION ...... 141
6.1. THEORIZING CHANGE: A GROUNDED MODEL OF GRADUAL CONFRONTATION THROUGH NON-CONFORMITY ...... 143
6.2. PHASE 1: FROM STIGMATIZATION TOWARDS HISTORY DETACHMENT ...... 148
6.2.1. PREPARING THE GROUND FOR CHANGE ...... 149
6.3. PHASE 2: HIGH STATUS NEGLECT - BREAKING THE CATEGORY GLASS CEILING ...... 153
6.4. PHASE 3: RE-FOCUSSING - THE MYTHIFICATION OF THE CATEGORY ...... 158
6.5. PHASE 4: REACHING CRITICAL MASS – THE EMERGENCE OF A MIDDLEBROW CATEGORY ...... 163
6.6. A FIRST OUTLINE OF A THEORY OF CATEGORY GRAVITY AND ATTENTION 167
6.7. DIS-ENCHANTING AUTHENTICITY ...... 174
7. CONCLUSION, LIMITATIONS AND FUTURE RESEARCH ...... 177
7.1. LIMITATIONS AND FUTURE RESEARCH ...... 179
LITERATURE ...... 182
List of Figures:
Figure 1: Data Structure ...... 51 Figure 2: Timeline of Crucial Events in the Australian Wine Industry ...... 68 Figure 3: Langton’s classification ...... 72 Figure 4: Yellow Tail front label ...... 74 Figure 5: Bearing Area of Vineyards, Wine Production and Wine Exports (1986-2013) ...... 79 Figure 6: Export Volume (1850-2014) ...... 80 Figure 7: Number of Wineries (1985-2013) ...... 80 Figure 8: R&D Investment in Total and in Percent of Wine Sales ...... 81 Figure 9: Increase in Turnover in Relation to Number of Companies and Employment ...... 81 Figure 10: Exemplary Rating Developments; Penfolds Grange ...... 83 Figure 11: Premiumization of Wine Plantings by Wine Grape ...... 84 Figure 12: Premiumization in Total: Premium and Non-Premium Shares of Wine Production ...... 84 Figure 13: Landmarks in the Formation of an Australian National Identity ...... 88 Figure 14: Penfolds Advertisement: To The Renegades ...... 105 Figure 15: Penfolds Grange Labels over Time: 1954 ...... 129 Figure 16: Penfolds Grange Labels over Time: 1961 ...... 130 Figure 17: Penfolds Grange Labels over Time: 1963 ...... 130 Figure 18: Penfolds Grange Labels over Time: 1990 ...... 131 Figure 19: Advertisements by Penfolds: Adam Brown, Grower Liaison Manager ...... 132 Figure 20: Advertisements by Penfolds: Tim Riley, Winemaker ...... 133 Figure 21: Advertisements by Penfolds: Nostalgia ...... 134 Figure 22: Advertisements by Hardy’s: Nostalgia ...... 135 Figure 23: Advertisements by Casella: Beach and Fun ...... 136 Figure 24: Advertisements by Casella: Tattoo and Fun ...... 136 Figure 25: Advertisements by Casella: Humor and Fun ...... 137 Figure 26: Badge at Hickingbotham of Droomana, Cellar Door: Ian Hickinbotham ...... 138 Figure 27: Badge at Hickingbotham of Droomana, Cellar Door: Alan Hickinbotham ...... 138 Figure 28: Grounded Model of Successful High Status Category Theorization ...... 144 Figure 29: Articles referring to “Colonial Wine” in the Australian and UK press, 1800 - 2008 ...... 152 Figure 30: Category Contrast and Theory of Value ...... 171
List of Tables:
Table 1: Table of Interviews ...... 52 Table 2: Archival Data Inventory ...... 56 Table 3: Observational Data Inventory ...... 57 Table 4: Data Sources and Illustrations of Dimensions ...... 61 Table 5: Examples of the Global Category of Iconic Wines ...... 71
List of Photographs:
Photograph 1: Wine Australia Museum Adelaide, Artifact ...... 95 Photograph 2: Cellar Door at Penfolds, Tasting Room Artifacts, Books ...... 103 Photograph 3: Cellar Door at Penfolds, Tasting Room Artifacts, Books ...... 103 Photograph 4: Bottle Shop McLaren Vale ...... 118 Photograph 5: Cellar Door at McGuigan, Gold Medals ...... 119 Photograph 6: Cellar Door at Wolf Blass, Gold Medals and Books ...... 119 Photograph 7: Cellar Door at Wynns, Tasting Room Artifacts ...... 126 Photograph 8: Cellar Door at Penfolds Front Side ...... 127 Photograph 9: Cellar Door at Penfolds Backside ...... 127 Photograph 10: Cellar Door at Yalumba, Front Side Artifacts ...... 128 Photograph 11: Cellar Door at Yalumba, Backside ...... 128
Abstract
This study on category status dynamics draws on a qualitative field study on the Australian wine industry. The data inventory comprises interviews, observations and archival data, such as media reports, technical books and newspaper articles. The case of the Australian wine industry allows to draw from a historical perspective a processual model from early stigmatization towards legitimacy through de-stigmatization. The case provides an empirical example of a status leap of an entire category. This achievement was possible on the basis of three distinct innovations. First, Penfolds Grange revolutionized the wine world with its novel approach to winemaking. This elite wine succeeded in breaking the category glass ceiling, which allowed for a detachment from the stigmatized category by becoming a member of the global category of iconic wines. The final legitimization was achieved through international wine critics.
Secondly, this wine and since then the majority of wines in Australia, were created on the basis of scientific winemaking. The authority of science and the myth of progress and social improvement through science and technology led to a rise of the profession of scientific winemaking. The myth of scientization helped grant legitimacy to the novel practices.
Thirdly, the last impactful innovation deals with the creation of a novel wine category, initiated be Casella’s Yellow Tail wines. This category emerged on the basis of the creation of a wine for non-wine drinkers. Yellow Tail wines sidestepped all category norms by introducing wine at low prices of reliable and faultless quality, easy and early drinkability. People did no longer need to know anything about wine in order to appreciate a bottle of Yellow Tail. This event is also referred to as the democratization of wine drinking.
Based on the empirical data, a grounded process model could be formulated that provides an alternative view on category change dynamics through the separation between the category population density, the category gravity, and the prototype, the center of attention. In order to dis-locate the center of attention from the category center of gravity, Penfolds Grange had to
first break the category glass ceiling, which allowed a detachment from the category. The second innovation extended the category horizontally through the emergence of a middlebrow
(sub-) category. This novel category, aimed at catering to a mass market, which required different legitimization processes based on the notion of democratization of wine drinking.
This development allowed for a dis-location of the center of gravity form its prior position. Due to the momentum of the first innovation that spoke to highbrow audiences and the critical mass reached but the new category that spoke to middlebrow audiences, the overall category of Australian wine extended and stretched via a step-wise process. This process unfolds according to the four mechanisms that allowed for the entire category to re-define itself, and, thus, reach high status: history detachment, high status category neglect, myhtification, and stigma reversing.
These four mechanisms correspond to four distinct phases of, first, stigmatization and history detachment, which prepared the ground for change, second, the breaking of the category glass ceiling, third, the re-focussing through mythification, and fourth, reaching critical mass and reversing the stigma.
Another contribution speaks to the authenticity literature. The findings suggest a novel form of authenticity, an expression of scientization as rationalized myth of modern societies, running counter the conventional understanding of authenticity as either an expression of originality or tradition.
Keywords: Market Categories, Category Dynamics, Status Dynamics, Professionalization,
Scientization, Stigma, Australian Wine, Authenticity, Qualitative Research
Preface
This study evolved out of a genuine interest in wine and its making. The initial puzzle of how
Australia “went down under” after its meteoric ascendency, as Jancis Robinson wrote in one of her famous comments, sparked further intriguing questions that finally lead to this dissertation. Part of this interest is of theoretical nature, revolving around questions of institutional change and category dynamics. Part of this interest is also grounded in my personal interest in wine, as a sommelier. Having a professional qualification in this area of expertise helped a lot to better understand the phenomena and the technicalities. However, it did not influence this study based on my personal preferences and taste. I am confident that I pursued a neutral standpoint throughout the study. Thus, the prominence of scientific winemaking for instance does not allow to draw a conclusion about my personal conviction concerning good winemaking.
This journey, metaphorically and physically, was enriched and accompanied by many persons to whom I feel deeply indebted.
I owe my supervisors a depth of gratitude. I am deeply grateful to Giuseppe Delmestri,
Werner Auer-Rizzi and Royston Greenwood. I have been very fortunate to receive a research grant by Giuseppe Delmestri that allowed for this field trip to Australia in the first place.
Furthermore, I have to thank Giuseppe for his unconditional support, availability and his formidable questions as advocatus diaboli. In addition, I feel privileged to have a supervisor who shares a mutual interest in food and beverages. I am also very grateful that Giuseppe brought me to Linz, which had so many wonderful consequences for my further life. I have very positive memories of our meetings, discussions and mutual trips, which were always a pleasant experience. My gratitude for Werner Auer-Rizzi addresses his constant positive influence through an outstandingly constructive attitude towards this study. I owe Royston
Greenwood for the manifold meetings at the University of Alberta and his constructive criticism that always hit the point. I enjoyed these conversations a lot.
Furthermore, I would like to express my gratitude to Davide Nicolini, without whom I would most likely not have chosen a career in academia. With this in mind, I would also like to express my gratitude to my colleagues and friends at the Warwick Business School, who had a great influence on me and my development, Dmitrjs Kravcenko, Eunwoo Lee, Jose
Barbero, Amith Mansoor to name a few.
I explicitly owe gratitude to Woody Powell, who’s enthusiasm for my dissertation topic gave me sufficient encouragement to start this project. Along this line, I would also like to express my gratitude to the critical feedback, comments and moral support I received from Mike
Lounsbury, Hokyu Hwang, Jeanette Colyvas, Marc Ventresca Chris Steele, Renate Meyer,
Markus Hoellerer and Gili Dori. Without Markus, this Australian adventure would not have been possible.
In addition, I would like to thank my former professors at the University of Graz, Stefan
Moebius, Christian Fleck, Karl Acham and Dieter Reicher, who helped me gain a sound basis for my further academic career.
I am also indebted to my colleagues at the Johannes Kepler University in Linz, who provided me with an academic home for five years. Among my colleagues, I would like to express my special gratitude to Caecilia Innreiter-Moser and Werner Auer-Rizzi. I owe special thanks to
Angela Weltler for countless hours of editing. I would like to also address the Wirth Institute,
Joseph Patrouch in particular, and my colleagues at the institute as well as at the Business
School, for hosting me at the University of Alberta. It was a wonderful experience.
This journey, however, would not have been the same without my friend and travel companion in Australia. Without the many discussions I had about Australian wine with
Benjamin Luft, this thesis would definitely lack critical reflection. My travel companion in spirit,
Gilbert Jeschko, puzzled me constantly with his interest in highly abstract theoretical concepts and thus allowed my ideas to contemplate and persist a critical judgment from an external view.
However, my deepest gratitude goes to my wife, Julia, whom I met during this theoretical journey and who accompanied my path since then in many enriching ways.
Thank you all for your support, wise words, critical views, understanding and leniency in times of theoretical struggle thought the last years.
The Australian wine industry has virtually reinvented itself. It has proved a great ambassador for Australia. (Brian Croser cited in Faith, 2002)
1. Introduction
The history of Australian wine and its development during the last century evolves around the notion of two distinct innovations that transformed a highly institutionalized system of wine categories. In particular, it involves, first, the emergence of a new high status wine from a stigmatized context, and second, from the same context the fundamental reconstruction of a low status category.
The first innovation deals with the creation of a new wine that was unknown at the time in respect to its scientific approach. This wine, Penfolds Grange, stands out as a unique example of high-class winemaking in the „New World“ in its own right. The second innovation occurred at the low end of the status hierarchy. The producer Casella introduced Yellow Tail wines on a high quality level (relative to its market segment) despite the vast scale of production. The achievement of Yellow Tail is not merely seen as an economic success but also as an effort leading to the democratization of wine drinking. Yellow Tail set a new standard in quality and consistency across varieties and vintages at the low price range of the market on an unprecedented production volume.
Both of these events are unprecedented and changed the whole landscape of the global wine industry. Nowadays, there are hardly any wine shelves in wine stores and in supermarkets around the globe without wines from Australia. Australian wines collected 14 top ratings by
Robert Parker Jr. Counting from the year in which Australia hit the top ratings first, 1976,
Australian wines were among the best in the world, outnumbered only by French and US
American wines (The Wine Advocate). They had conquered the markets on both extreme ends, high value and low value. When asked what Australian wine stands for, people from the industry always refer to Penfolds Grange and Casella’s Yellow Tail at the same time.
The story unfolds with the success of Grange, which proved that Australian winemakers are
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among the best in the world and that the scientific approach is perceived as legitimate if not even the gold standard of modern winemaking. This is particularly interesting since Penfolds
Grange had to break the glass ceiling of the stigmatized category of Australian colonial wine in order to become a member of the global elite wine category of iconic wines1. Status leaps are usually associated with firm affiliations or increased quality perceptions (Podolny, 1993;
Podonly and Phillips, 1996; Benjamin and Podolny, 1999; Yogev, 2010). In the Australian case quality proved insufficient to reach status. Australian wines were awarded top tier ratings at wine shows in Vienna, 1873 and Paris, 1878, directly compared to high end Bordeaux wines, such as Chateau Margaux. The wines were subject to blind tasting. Once discovered that these wines were of Australian descent, they lost the prices, as the critics originally thought to sip French wines (Mayo, 1986, p: 35). Thus, perceived quality seems not to account for the status leap of Penfolds Grange, as Penfolds like all other Australian producers of the time, was marked with the stigma of colonial wine.
The story of Yellow Tail unfolds roughly half a century after the initiation of the Grange. The success of Yellow Tail adds the notion that Australian winemakers are also capable of producing good quality wine on unprecedented production volumes. Hence, at both ends,
Australia showed the world that they cannot only keep up with the rest, particularly the ‘Old
World’, they can moreover outrun their competitors by being innovation leader. Australian wine was successfully theorized at a high price and a low price level, both building on the legitimation of the profession of winemaking as thriving on science and innovation, the cornerstones of modernity.
The empirical story examined in this thesis offers three puzzles. The first focuses on how
Penfolds Grange, located in a stigmatized wine context, could become one of the most
1 The status hierarchy builds on the wine segmentation based on prices. The foundational distinction is between table wine and bulk wine. Bulk wine is usually sold in boxes or large volume bottles with prices below $ 3 per liter. Table wine is then further divided into quality ranges from popular premium wine ($ 6 per bottle), to premium wine ($ 8 per bottle), super premium ($ 16 per bottle), ultra premium (up to $ 170 per bottle) and iconic wines (over $ 170 per bottle). (Rabobank International 2003) 22. May 2017 Daniel Semper 2/211
successful and sought after iconic wines in the world2. The second story addresses the events that allowed Yellow Tail to gain such prominence and market dominance with quality wine produced in huge volumes. The third puzzle concerns the industry as a whole and asks how both events could happen in the same industry and how these effected the category of
Australian wine.
1.1. The Theoretical Lens
To unravel the case of category change of the Australian wine industry, therefore, I divide the process into three analytically distinct parts. The first part of the thesis concerns organizational status dynamics in relation to category dynamics. An increase or decrease in one would inevitably also result in dynamics in the other. Such an interdependence raises awareness to the dynamics related to the breaking of the category glass ceiling. For one, this dynamic refers to situations in which an organization detaches itself from its context in order to redefine its category membership. Organizational affiliations determine status effects of leakage, erosion and enhancement (Podolny, 1993; 2001; 2005; Podolny and Phillips, 1996,
Washington and Zajac, 2005). Thus, detachment from a low status or stigmatized category helps to allow a leap in status position (cf. Delmestri and Greenwood, 2016). Also, the perception of quality can be attributed to the social poisedness of the actor (Johnson and
Powell, 2015). In the case of Australian wine, the high quality of the early wines in the 19c were not socially accepted as legitimate. Instead they were perceived as faulty wines from the colonies. This comparison was based on the fact that these wines were produced with the same techniques and production standards as the European counterparts. A century later, the success of Penfolds Grange was based on an innovation in winemaking, referred to as scientific winemaking, which was counter the European winemaking standard of the time.
Consequently, this study asks how an organization deeply embedded in a stigmatized
2 The hierarchical order of the wine category ranks as follows: stigmatized – low status – middle status – high status – iconic. The step from stigmatized to low status marks the transition from illegitimate to legitimate. 22. May 2017 Daniel Semper 3/211
category could become the epitome of modern winemaking at an outstanding quality level, perceived as legitimate and authentic on the basis of so far illegitimate and inauthentic practices of scientific winemaking. The literature would assume such a status leap as very difficult to accomplish, especially if achieved by introducing illegitimate practices instead of imitating high status organizations (Davis and Greve, 1997; Phillips and Zuckerman, 2001;
Rao, Monin and Durand, 2003; Delmestri and Greenwood, 2016). Penfolds Grange
Hermitage is, thus, a suitable case of status dynamics. Up to date, empirical examples of organizational status leaps are rare, particularly when embedded in a stigmatized or low status category.
The second part of the thesis deals with an innovation that redefined the overall category of wine. By introducing good quality wines on a low price level, Casella opened the wine market to a broader audience. This was achieved by creating a new sub-category of affordable quality wines. In doing so, the Yellow Tail wines introduced a new quality dimension to the average wine drinker, so to allow Casella to achieve market dominance, particularly in the US and UK. As such, the novel category positions itself as ‘middlebrow’ audience perceptions
(Peterson and Kern, 1996; Phillips and Kim, 2009), offering an alternative between highbrow elite category and the lowbrow bulk wine category. For new or de-novo categories to become legitimate, the literature would assume bricolage or blending of legitimate features of related categories to gain legitimacy (Jensen, 2010; Jones, Maoret, Massa and Svejenova, 2012).
However, Casella ignored the category norms of Australian, as well as international wine and invented a novel category of low priced quality premium table wine. The role of critics is crucial in experience goods industries and creative industries (Croidieu, Rueling and Boutinot,
2016; Glynn, 2000; Khaire and Wadhwani, 2010). Thus, the perception of wine quality is usually subject to experts’ opinions. Since in the wine industry only premium wines are in the focus of wine critics, low prized table wines are rarely reviewed (Taber, 2011). However,
Yellow Tail was occasionally reviewed by Robert Parker Jr. and other impactful wine critics.
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Nevertheless, the lack of regular reviews and ratings opens opportunities for players operating in this market segment to reach legitimacy by sidestepping the critical “highbrow” judgment of mediators. Thus, quality lies in the eye of the average wine consumer. I will argue that the critics’ focus on premium wine shielded possible negative evaluations. The innovations allowed Casella to produce wine at good quality on low price levels, which is referred to by many wine consumers as the principle of democratization of wine drinking. A second shielding mechanism is based on the strategic decision by the Winemakers’
Federation of Australia to brand Australian wine under one national label. Thus, Yellow Tail benefited from a status spillover effect through affiliation. The theoretical puzzle, thus, deals with the question of how a low status organization could spin off a novel sub-category of wine globally and gain legitimacy, which involved a valorization of prior neglected low status wines.
To date, the question of how organizations and their product offerings positioned at the low end of the market become legitimate and thus influence the category as a whole through their ubiquity and market dominance has not been explored in the status nor in the category literature.
The third part of the thesis brings together both innovations and asks how and why they could occur in the same industry and secondly, how they effected the overall category of Australian wine. The first innovation, Penfolds Grange, amplified the process of de-stigmatization of the entire category of Australian wine. The critical acclaim this wine received allowed for a status leap by breaking the category glass ceiling of colonial wine and becoming a member of the global category of iconic wines. The second innovation, Casella’s Yellow Tail, increased the audience’s quality perception of low price wines, which were up to then only available on a low quality level. Both together allowed the entire category of Australian wine to increase its status position. The process of how the category ceiling broke, the category stretched and finally moved upwards the status hierarchy will be detailed in chapter 6. This process will be referred to as beachhead and linchpin (or pair of wingers) strategy.
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Another aspect deals with the consequence of this process, having two exemplars instead of one. The literature on categories would assume one prototype (Rosch and Mervis, 1975) as central unifying anchor of the category. In cases of absence of a prototype, theory suggests that audiences orient their attention towards their “theory of value” focusing on their needs
(Paolella and Durand, 2016). Differently than the existing category literature, I will suggest in chapter 6.3. an alternative view on prototypes and exemplars, by introducing the idea of a category stretched vertically by two extreme cases of exemplars. This provides a space for audiences and category members to contemplate the market identity of the category along the vertical axis of the status distribution. I will argue that innovations at both ends of the spectrum are of equal importance to the market category of Australian wine. Binding the exemplar argument into the analysis of the category leap process, chapter 6.3. will differentiate in more detail how two exemplars are positioned distinctly to each other as the center of attention and the center of gravity, which together helps transform the whole category and allows the entire category to reach higher status. The concepts of center of gravity and center of attention are novel. Together they aim at helping to differentiate between the audience’s attention on one (or two) exemplar(s) and the population density of the category members. The beachhead-linchpin strategy process will show that the upward movement of both centers of attention and gravity are intertwined. Moreover, the interplay between these two explains the category status leap in more detail. Thus, I will argue that both innovations, despite the lag of appearance (1950 and 2000), can be theorized as a co- evolution of science of oenology, in research and education, and winemaking, which laid the foundation for the legitimacy and success of scientific winemaking.
Besides legitimacy, authenticity plays a crucial role in the domain of food and beverages
(Kovacs, Carroll and Lehman, 2013; Lehman, Kovacs and Hannan, 2014; Negro, Monin and
Durand, 2011; Weber, Heinze and deSoucey, 2008). In such industries authenticity and legitimacy seem to fall together. Authenticity plays a particularly crucial role for premium
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offerings (Beverland, 2005), but less so on low price levels. I will argue that the low end of the vertical category order could lack authenticity, whereas the premium end is perceived as authentic, despite the common characteristics of scientific winemaking on both ends of the hierarchy. Besides, aspects which are hidden to average wine consumers, the practices of scientific winemaking, other aspects are proudly presented to the tasting room visitors. That is for instance the case of Australian winemakers exhibiting scientific instruments, such as microscopes, and chemical analysis showing sketches of molecules in wine tasting rooms.
Also, the vast areas of wine-tanks, refrigerators, and wine presses are not disguised or hidden underground as typical for wineries in other countries. Australian winemakers seem to take pride in the scientific and technological aspects of their profession. The authenticity of
Australian wines, particularly on the top end of the hierarchy is not in question. Thus, the theoretical question asks how so far inauthentic practices could become legitimized and perceived as authentic, although these practices represent an anti-tradition and anti- craftsmanship ideology. The current literature on authenticity of categories lacks the understanding of authenticity as an expression of modernity and science instead of tradition and craftsmanship. The notion of authenticity is usually scrutinized at either the top end of the status category (Beverland, 2005) or in homogenous categories (Weber, Heinze and
DeSoucey, 2008). In addition, authenticity claims are aimed at different audiences: insiders, such as critics and experts, and average consumers. Claims referring to traditional authenticity concepts focus for instance on the soil and claim reference to European wine labels, such as “Hermitage”, the early appendix to Penfolds Grange. However, experts will know the practices of scientific winemaking involved in the production of the wines. I will, thus, argue that contradictory authenticity claims are not perceived as problematic or discount their credibility. Similar to the positive effects of ambiguity of features of market offerings (Kim and
Jensen, 2011) and the extent to which audiences can relate to these different features (Wry,
Lounsbury and Jennings, 2014), I will argue that, first, the different identity and authenticity
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claims are directed to a different audience. Secondly, the consequent ambiguity helps reaching a broader audience, as each audience relates to different authenticity claims differently.
No attention has been given so far to how stigma detachment is achieved by a category in the process of becoming fully legitimate. Stigma detachment is usually referred to as a straddling process (Vergne, 2012) or as stigma work (Hampel and Tracey, forthcoming). The status leap concerns organizational achievements in global wine categories at both ends of the hierarchy, which in turn allowed the whole category to reach high status. The status leap of the entire category speaks to a horizontal category shift from a colonial wine category to the category of
Australian wine involving the detachment of the stigma.
Another point of interest is that the literature does not yet speak to the puzzle of how entire categories change over time through a process of distributed agency, taking into account the manifold actors involved in stemming the status leap.
Since non-conformity is always a puzzle in institutional theory, the motivational question in part three asks what conditions allowed the whole industry to become globally successful, deviating vastly from the global standard of winemaking. Understanding category emergence is recognized as theoretically underdeveloped in the category literature (Kennedy and Fiss,
2013; Kennedy, Lo and Lounsbury, 2010). This is particularly true concerning the question of how category dynamics relate to status changes (Jensen, Jensen and Kim, 2010; Sauder,
Lynn and Podolny, 2012; Delmestri and Greenwood, 2016). Therefore, the case of Australian wine is theoretically interesting as it represents a case of status shift of an entire category.
The findings are counter-intuitive to what one would assume based on prior studies of category change and emergence. In addition, status as a dependent variable is relatively underdeveloped in the status literature, as status is usually scrutinized as a concept to explain consequences for organizations. This study builds upon the notion of status as something the organization is, not what it has (Sharkey, 2014: 1425).
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Empirically, this study seems suitable to account for many other examples of category changes and status dynamics. That is for instance the emergence of the category of the romantic novel from an illegitimate genre to a highly successful literary form; the emergence of professional schools, such as nursing schools, from low status vocational schools into scientific schools and colleges; the change of low status schools of commerce to high status business schools, as well as the rise of power and influence of the academic discipline of economics in academia, for policy making and society overall.
1.2. Methods
The study employs an exploratory, hence inductive, research design, since the aim is to develop theory (Glaser and Strauss, 1967; Yin, 2013). The dataset comprises primary interview data and field observations, drawing on a three-month field study in South-Australia.
I also integrated archival material into the dataset. That is wine publications, books, wine reviews and ratings, historical newspaper articles, as well as secondary interview data. The time frame for the analysis covers a historical overview form the early beginnings until mid
20th century, which will then be in the main focus of the analysis. In order to account for the most successful period of Australian wine, the export boom decades, the study covers the period until the economic crises hit the global economy in 2008.
Since the Australian wine industry was export oriented from its commencement and the domestic market appears stable, the focus of this study is on the global impact and resonance of Australian wine. The study focuses on multiple audiences. For one, these are expert audiences, such as people form the industry, wine experts and critics. Additionally, audiences comprising regular wine consumers and newcomers to wine, at a global level, as well as on a domestic level, play an important role.
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1.3. Contributions
The study contributes to the literature on status dynamics as it provides an empirical case of an organization, breaking the categorical boundary and reaching high status acclaim.
Secondly, the study contributes to the literature on category dynamics as it provides an empirical story of a complete category change that reaches beyond category re-definition
(Delmestri and Greenwood, 2016; Hampel and Tracey, forthcoming), category blending
(Jensen, 2010; Rao, Monin and Durand, 2005), category straddling (Alexy and George, 2013;
Negro, Hannan and Rao, 2010) and category spanning (Hsu, 2006; Kovacs and Hannan,
2010). It provides a case of a vertical meaning expansion across the whole category between two extreme exemplars, instead of revolving around one central prototype. Despite their distant positions along the vertical dimension, both exemplars are united in their values and practices of scientific winemaking. To better grasp the category change dynamics around two exemplars, I introduce the concept of category center of gravity and category center of attention.
Another contribution deals with the novelty of the form of theorization of the Australian wine category. That is the notion of theorization by non-conformism, a variant of theorization by direct confrontation as hinted to by Delmestri and Greenwood (2016). The mechanisms contributing to the theorization process are history detachment, high status category neglect, category exemplar mythification and stigma reveringl. These mechanisms speak to the stigmatization literature (history detachment; stigma reversing) as well as to the literature on prototypes and authenticity (mythification).
A third contribution emphasizes the distributed character of collective action for category change (see for instance Leblebici, Salancik, Copay and King, 1991; Munir, 2005; Hargrave and Van de Ven, 2006). In this study the interrelation between category change and the change of social meaning systems institutionalized and embedded in the entire field becomes
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evident.
A fourth contribution concerns the literature on authenticity. The contribution addresses the development from a stigmatized category into a legitimate category that is granted authenticity at the upper levels of the status hierarchy, although the practices draw on the principles of modernity instead of tradition and craftsmanship.
1.4. Structure
The remainder of this chapter is organized as follows. Chapter 2 provides an introduction to the literature on market categories. After a short overview on the genesis of this stream of literature, the focus is on the recent developments. As such, the following subchapters concern category emergence and the role of status, the role of professions and professional associations, the role of authenticity and the role of stigmatization. In chapter 3, the methods are detailed. The following chapter introduces the historical and current context of the study.
This chapter provides a historical overview on Australian wine until the peak of its success. In addition, a brief overview of the economic developments in this industry will be given. In chapter 5 I present the findings of the study. Chapter 6 discusses the findings and introduces the mechanisms, which allowed for the entire category of Australian wine to reach high status acclaim. Chapter 7 concludes the thesis. Besides, limitations of this study and further research topics are scrutinized.
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2. Theory
This chapter unpacks the concepts of dynamics related to categorization, re-definitions of categories, self-categorization and category imperative introduced in the canon of the category literature. In doing so, this chapter spans a paradigmatic bridge from social- psychology to sociological theories of organizational ecology and organizational identity and will finally settle for an institutional approach to market categories. Despite the difference in perspective between these approaches, the core defining principles are common ground. The following chapters will carve out the similarities and differences and lay the ground for the further analysis.
The literature on categories is also two-fold at another dimension. Categories are dealt with strategically by organizations in order to position themselves in the market. In addition, another stream of literature focusses on how audiences deal with market categories and ambiguity that often comes with unclear categorization.
Further on, I will introduce the concepts of category structure, referring to horizontal expansion and vertical ordering. The former will deal with the width of a category, the latter will introduce status into the understanding of categories.
In addition, authenticity often pays an important role for categories, as the perception of the market identity of a category is crucial for its legitimacy and moreover its survival and success. This sub-chapter will try to integrate the concepts of legitimacy, legitimation and authenticity.
One extreme form of a lack of legitimacy is the case of stigmatized categories. The recent stigma literature is often incorporated into the category literature, as it perfectly speaks to issues of category change in the process of reaching legitimacy.
The last sub-chapter deals with the question of how categories and the meanings attached can change over time. For this reason, the concept of theorization, the pivotal core in
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institutional change literature, is introduced. Professions seem of particular relevance in this respect.
The theory chapter will close with addressing the gaps in the literature and introducing the research question.
2.1. Market Categories, Institutions and Cognitive Maps
The literature on categories goes back to the study by Porac, Thomas and Baden-Fuller
(1989) on competitive groups as cognitive communities in the Scottish knitwear industry. The authors employed a cognitive psychological approach in order to understand strategic decision making. As such this paper was understood as a critique of Porter’s approach to competitive strategy (Porter, 1980). Their work broke with the strategic management field by suggesting that categorization processes played an important role in competition and that the environments in which firms operate are endogenous to the interpretations and actions of the managers in firms themselves (Kaplan, 2011, p: 666). Porter’s fife forces address organization internal as well as external environmental effects on the strategic orientation of a company. However, the main goal is to achieve a unique market position deploying the company’s capabilities on the basis of a unique business model. According to his theory, profitable markets will attract new firms to enter the market and challenge the incumbents.
Entry barriers to markets exist in the form of patents or customer loyalty. The overall strategic orientation of the firm also caters to the potential threat of being substituted by other companies, the bargaining power of customers as well as suppliers. A crucial aspect evolves around the limits to and availability of information. Besides, this theory puts forth the notion of industry rivalry as a major driving force for the innovativeness of companies. As a response, the early category literature shifted the focus towards hierarchical competition and cooperation. Organizations are not only seen as in competition with each other. Moreover, they are seen as a community of companies working in the same field. The fact that
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companies do not see themselves as islands in a sea of industry competition but related to other companies in manifold ways, shape their mental model of what the firm stands for in relation to the industrial community. Porac, Thomas and Baden-Fuller (1989) speak of a cognitive model of strategic management.
In a later study Porac, Thomas, Wilson, Paton and Kanfer (1995) expanded this early insight to the notion that such communities are safeguarded by boundaries. These boundaries are social constructions around a mutual mental model shared by organizations of one community. These boundaries are semantic in nature and thus impose coherence and shared beliefs of the social world (DiMaggio, 1987; Lamont and Monar, 2002; Lounsbury and Rao,
2004). They introduced the notion of variation in business models as having an effect of ambiguity for both firms and customers. As a consequence, perfect competition is replaced with network structures of imperfect competition.
The emerging research on cognition in organizations made two related moves. The first was to address the question of organizational responses to their environments, which had been dominant in the discourse of organizations at least since Lawrence and Lorsch’s (1967) classic. The cognitive perspective suggested that the environment is not purely exogenous and therefore organizational response to the environment is mediated by the interpretations made of that environment by managers.
By this the foundation was laid for further development of categories in the management literature. Building on the cognitive perspective on management, the literature moved from a social psychological view towards a sociological view, integrating aspects of organizational death and survival rates based on the organizational ecology theory (see for instance Hsu and Hannan, 2005), which is still a dominant view in the canon of category literature today
(Vergne and Wry, 2014). Strategy remained a topic particularly in the self-categorization literature (Durand, Rao and Monin, 2007). However, this paper orients itself more towards the institutional streams (Lounsbury and Rao, 2004) and the related organizational identity
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streams (Glynn, 2008) within the category literature. Despite discrepancies in respect to the understanding of agency, the underlying concepts are similar in nature (Negro, Hannan and
Rao, 2010).
For instance, organizations try to shape the category system they are members of (Negro,
Hannan and Rao, 2010). They strategically manipulate the audiences by diluting the organizational or category market identity in case of stigmatization (Vergne, 2012).
Conversely, the concept of the category imperative (Zuckerman, 1999) downplays this agentic approach. Similar to the debate in institutional theory, the questions concern whether and in what way actors who are deeply immersed into the institutional environment they live in can change the settings that are taken for granted for them. This is referred to as the paradox of embedded agency (Battilana and D’aunno, 2009).
Self-categorization refers to the fact that organizational cohabitants bundle together into a category if common organizational characteristics are salient. In such a case firms self- categorize themselves into a mutual category (Porac, Thomas and Baden-Fuller, 1989). The competitive dynamics of members of such categories are shaped by the cognitive maps of possible strategic actions. An organizational category is recognized as such, when similar member organizations and a set of associated external audiences come to a mutual understanding of the material and symbolic resources that serve as a basis to assess the membership in the category (Vergne and Wry, 2014, p: 68).
This definition reveals the duality of the conceptual understanding of categories. One aspect deals with the self-categorization of firms. The other aspect concerns the importance of audiences in their assessment and validation of the category offerings. That is products, services but also the member organizations and their practices as such.
Such communities of organizations are confined by cognitive boundaries, distinction between social objects that share a family resemblance (Barsalou, 1985; Rosch and Mervis, 1075).
Family resemblance acts as a cohesive force, a glue that functions on the average similarity 22. May 2017 Daniel Semper 15/211
among category members and likewise its dissimilarity to non-members. Thus, membership status is defined through the category boundary. This distinction helps audiences distinguish between but also within categories (Vergne and Wry, 2014). Such boundaries cannot always be neatly drawn. They are often in flux or ambiguous. Despite this, audiences usually perceive them as comparably clear. Boundaries are policed and constantly enacted and reproduced (Lamont and Molnar, 2002). Boundaries group individuals and organizations and offer a basis for agreement upon definitions of reality (Lamont and Molnar, 2002, p: 168). The shared understanding of social reality serves as a means of status stratification. Moreover, it creates and restricts access to resources. This is the case because boundaries ensure unequal access to and distribution of resources among people and organizations and as such to social partaking. Thus, boundaries are in the focus for actors who wish to change the status quo of the category structure (see for instance Zietsma and Lawrence, 2010).
The condition and nature of the boundary varies. It depends on the category contrast and the degree of membership of organizations in the category. Membership status is attributed to an organization by the audience, as they recognize organizations as member on the basis of shared beliefs that offerings of the organization as well as organizational characteristics fall into the same category. Besides organizational characteristics, another important point deals with the question whether the organization is sufficiently focused (Vergne and Wry, 2014).
Such cases are especially relevant for partial membership, when organizations fall into several categories. The grade of membership (Hannan, Polos, and Carroll, 2007; Kovacs and
Hannan, 2010) explains cases when organizations fall into several categories. Taking music as an example, Joe Zawinul falls into the category of Jazz and into the category of World
Music. Thus, he would be counted ½ towards Jazz and ½ towards World Music. Of course he would count 0 points in other music categories, such as heavy metal or techno.
This example also explains well in what way categories provide identity codes to audiences, who in turn ascribe a shared identity to all category members. The ascription works on the
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basis of an assessment and understanding of symbols and values attached (Durand, Rao and
Monin, 2007; Kroezen and Heugens, 2012). Such identity codes can be borrowed from institutional logics (Weber, Heinze and deSoucey, 2008; Jones, Maoret, Massa and
Svejenova, 2012). Institutional logics can serve as the normative basis for a category to emerge (Weber, Heinze and deSoucey, 2008) and frame social movements (Rao, Morrill and
Zald, 2000). Categories can also shape action based on cultural norms and values associated with an institutional logic (Jones, Maoret, Massa and Svejenova, 2012).
A coherent structure of material practices and sociocultural belief systems that transport meaning and values fuel potential agency (Vergne and Wry, 2014). That is because of the comprehensibility of categories, which helps reduce complexity (Lounsbury and Rao, 2004) and shape perceptions and expectations in order to help process the information (Douglas,
1986). Categories impose coherence in a complex social world by dividing organizations, products, people and practices into groups (Vergne and Wry, 2014). It also provides a foundation for quality assessment, value judgment and allocates attention (Zuckerman, 1999) and it allows for comparisons between firms (Hsu and Hannan, 2005; Rao, Monin and
Durand, 2005). Consequently, rivalry and (imperfect) competition shape the category structure.
Categories are socially ordered constructions, represented by a label, that differentiate objects, people, practices, time and space (Lamont and Molnar, 2002). The objects are clustered into a product category, which is recognized through similarity of socio-technical artefacts. These artefacts are available in the market within a distinct market segment that serves as a basis for interaction between firms, customers and mediators, such as critics or financial rating agencies (Vergne and Wry, 2014).
After all, categories are institutions per se. Institutions are (more or less) enduring social patterns (Giddens, 1984), established on the basis of reciprocal typification of habitualized actions (Berger and Luckman, 1991). Not only are categories institutions themselves,
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categories are also fundamental aspects of institutions, based on their cognitive and normative characteristics. They transport and convey meaning into durable/stable cultural orders (Ocasio, Loewenstein, and Nigam, 2015, p: 31).
In addition to the cognitive aspects, categories also entail and transport values and belief systems and are hence closely tied to efforts of institutional maintenance and change
(Maguire, Hardy and Lawrence, 2004).
2.2. Alternative Views on Categories: Strategy vs. Responses
Categories are at the interface between organizations and audiences. As such, they bridge multiple levels of analysis, from micro to macro level. Both sides, the organizations and the audiences, are understood to have actorhood. For instance, audiences in interaction with the companies shape the category.
Conversely, strategic approaches entail efforts of category straddling. Category straddling refers to the case, when organizations have simultaneous membership status in multiple categories, whereat both categories are located at the same classification level. A Napa-
Bordeaux wine would be a case of straddling, since both categories are at the same classification level. Napa is no sub-category of Bordeaux, nor the other way around. Both are subcategories of US American and French wine. Australian desert wine, as another example, does not straddle categories, as they are not located at the same classification level. An
Austrian Thriller would not straddle categories, whereas a Science Fiction Thriller would be an example of category straddling.
Multiple category membership is usually associated with negative evaluations (Hsu, Hannan and Kocak, 2009). Thus, ideally category specialist are unequally distributed among different category memberships. In the extreme case, organizations are only member of a single category, as multiple memberships often result in confusion.
However, straddling can provide positive as well as negative ramifications for an organization. 22. May 2017 Daniel Semper 18/211
Organizations that are perceived as positive, face negative consequences when they straddle. Consequences could be less favorable evaluations and sanctions (Hsu, 2006; Hsu,
Hannan and Kocak, 2009). Conversely, negatively perceived organizations receive less negative evaluations when straddling (Jensen, 2010; Vergne, 2012). This mechanism becomes even more effective, when categories have high contrast (Kovacs and Hannan,
2010) or high saliency (Vergne, 2012). This is also true when straddling organizations face audiences comprising rather market takers than market makers (Pontikes, 2012) or when the organization is strongly identified with illegitimate practices of a category it becomes a member of (Alexy and George, 2013). Low contrast has ramifications due to unclear difference to other categories and a loss of distinctiveness to other categories, and a vagueness concerning other members of the category in respect to their common characteristics (Negro, Hannan and Rao, 2010).
On the contrary, effects of category straddling can be mitigated when other members of the category have already straddled in the past (Rao, Monin and Durand, 2005), when categories have low category currency (Alexy and George, 2013) or when the straddled category is still nascent (Ruef and Patterson, 2009). Category currency is a concept that measures the extent to which a category provides a clear meaning and transports a positive appeal (Kennedy, Lo and Lounsbury, 2010). The concept of category currency bridges legitimation and legitimacy processes. That is because it combines the ascription of a clear meaning, which gives legitimation (Hannan, 2007), with the social desirability of the positive appeal, which grants legitimacy (Suchman, 1995). This distinction is particularly relevant for stigmatized categories.
In the category literature, the collective identity of category members seems highly relevant in the process of gaining legitimacy (Lounsbury and Glynn, 2001; Navis and Glynn, 2011; Wry,
Lounsbury and Glynn, 2011).
Other important properties of categories that can be strategically employed are category fuzziness, contrast, leniency and saliency. Fuzziness refers to a disagreement between
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category members and audiences about the definition of the category. This could be the case due to multiple category memberships. The contrast of a category is defined here as the average grade of membership (Negro, Hannan and Rao, 2011). Audiences understand and grasp the idea of what the product is about or what the organization stands for better if membership ascription is clear and the category boundary is of high contrast (Durand and
Paolella, 2013), which means that the level of difference or deviation is relatively low among category members grouped around an ideal category exemplar. Such an exemplar, the prototype, captures the essence of what the category represents, the typical and ideal characteristics (Rosch and Mervis, 1975).
Category leniency is understood as the extent to which category membership constrains affiliated organizations (Vergne and Wry, 2014). The saliency of a category deals with its visibility, how much attention is devoted to a particular category within a broader classification hierarchy (Vergne and Wry, 2014).
In cases of low contrast and leniency paired with high saliency and fuzziness audiences would likely react with confusion. Such ambiguity will most likely lead to discounts and low evaluations based on the category imperative. That is a policing and disciplining power of audiences as a response to straddling or blending (Zuckerman, 1999). Hence, strategic approaches to categorization will usually have to face responses by external audience, which imposes constraints on their decisions through policing efforts and possible sanctions based on the category imperative. Particularly, the question of membership and the conformity to the categorical imperative involves strategic decision making to address the tension between conformity and differentiation. This tension is also referred to as the competitive cusp (Porac,
Thomas and Baden-Fuller (1989) or the strategic balance (Deephouse, 1999). It concerns the minimum criteria that organizations have to conform to in order to be granted legitimacy. Only after conformity, in a second step, differentiation is possible on a legitimate basis (Zuckerman,
1999).
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Who are these audiences? Audiences are understood as an unrelated group of individuals who interrelate or interact with members of the category. Vergne and Wry (2014) defined this interrelation as mutual dependence. Audiences attend to offerings from category members, which provides them a cognitive frame for comparisons, both within the category as well as between categories. Audiences exert power over the material as well as symbolic performance of category members (Vergne and Wry, 2014). That is, they reward and sanction category members for their behavior and the quality and characteristics of their products. The term audience can refer to all sorts of stakeholder, organization members, customers, critics, rating agencies or media.
Consequently, categories are understood as enabling and constraining devices. The boundaries not only safeguard from competition, they also enforce policing, which entails sanctions for possible breaches of the category norms.
External audiences, such as critics and rating agencies, are particularly important in experience good industries, as the products and services cannot be tested beforehand and experiences cannot be guaranteed to be reliable. The same holiday destination can feel totally different from one time to another, the same brand of wine can taste distinctly different, even more so from vintage to vintage. The same opera performance will most likely vary every time. The Vienna Schnitzel in your favorite bistro at the corner will not always taste the same.
No matter if evaluations are assessed by audiences directly or mediated by arbiters, usual sources of contestation are straddling, blending, spanning, hybridity and ambiguity. Hsu
(2006) found for instance that category spanning in the movie industry can broaden the audience but are in the end perceived as less attractive by the audience. In some occasions, spanning can be beneficial as well. Breaching the categorical rules of the game can dilute attention or integrate positive characteristics from another category (Jensen, 2010; Vergne,
2012; Wry, Lounsbury and Jennings, 2014). In this respect, Paolella and Durand (2016)
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challenge the determinism of the disciplining force of the category imperative, as spanning can potentially have beneficial effects. Such cases were found for instance in open innovation
(Alexy and George, 2013), the movie industry (Jensen, 2010) or the dilution of attention from a stigmatized industry (Vergne, 2012). The mainstream would, however, still speak of discount effects when organizations incorporate aspects of multiple categories (Hannan,
Polos and Carroll, 2007; Negro, Hannan and Rao, 2010). Thus, unclear identities appear less meaningful.
According to Kovacs and Hannan (2010) the effects on category spanning depend on contrast. High contrast category membership increases the appeal to audiences. Accordingly, straddling high contrast categories causes the appeal to decrease.
2.3. Category Structures
A classification hierarchy is a cognitive representation of the structural relationship between categories that has reached some consensus among category members and audiences.
Thus, categories divide into sub-categories, classes and niches (or genres). Genres are understood as the social construction of market niches (Anand and Croidieu, 2015). Such sub-categories intersect with the audiences taste and the organization’s capabilities (Hannan,
2010). However, categories are meaningful at all levels (Vergne and Wry, 2014). Examples would be in music for Jazz, Bebop or Swing, for Classical Music, Opera or Dodecaphonism.
The concept of category structure encompasses horizontal as well as vertical expansion.
2.3.1. Horizontal Expansion
A horizontal category extension resonates with an institutional perspective (Delmestri and
Greenwood, 2016). The meaning of a category does not only stem from consensus over its
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characteristics, as in prototype theory, but also from the social and cultural practices associated with it (Khaire and Wadhwani, 2010; Durand and Paolella, 2013; Delmestri and
Greenwood, 2016). Hence, categorization is not only a cognitive phenomenon, but rather a socio-cultural phenomenon alike, as organizations and audiences are embedded in a cultural environment in which the interaction takes place (Glynn and Navis, 2013).
Categorization is understood as a process of increasing abstraction (Hofstadter and Sander,
2013). Coffee, for instance is as a brewed drink made of roasted coffee beans. Coffee can also be a cluster of beverages including espresso, café latte, Irish coffee, ice-coffee and clod brew. The social meaning attached will vary from type to type. Going for a coffee, having a break from work or meeting friends will employ different concepts of coffee. As for wine, the meanings abstract from a glass of wine, to its alterations as Hugo, Orange Wine or Spritz, to the social practice of cheering for someone’s anniversary with your wineglasses raised or clinking glasses, to celebrate a wedding or as a ceremonial feature of the holy mass. Hence further abstraction encompasses new social meanings that become reproduced through social practices.
2.3.2. Vertical Ordering
Vertical orders refer to a status hierarchy. Social practices are always expressions of social positions along a vertical order (Bourdieu, 1984). Thus, people refer to different practices and objects that transport a particular taste, distinct for a certain hierarchical position. One would not serve a low class, mass-produced “New World” wine at the Queen’s anniversary banquet.
As such, markets and their hierarchies are socially constructed (Berger and Luckmann, 1966;
Meyer and Rowan, 1977).
The saliency of status positions is particularly relevant when the uncertainty in markets is high
(Podolny, 1994; Sauder, 2012). The literature on organizational status usually deals with status as an explanans for effects in organizational affiliations and future performance.
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Usually, the focus lies on high status organizations. Phillips and Zuckerman (2001) found that high status actors are granted more freedom to violate categorical rules. Deviation does not necessary involve penalties, as lower status actors would have to face (see for instance Rao,
Monin and Durand, 2003). Moreover, the pressure on organizations seems the highest for middle status organizations. Phillips and Zuckerman (2001) speak of middle status conformity in this respect.
Status is usually understood as determined by past performances and affiliations with other organizations on a specific status position (Podolny and Phillips, 1996). Status is socially constructed, particularly, since past performance is often linked to an assessment of perceived quality, which also depends on the active participation in the market, which in turn affects the definition of perceived quality of product offerings and thus organizations (see for instance Yogev, 2010).
Durkheim (1982, p: 110) defined status classifications of social entities as imperfect, as every entity is an infinity and infinity cannot be exhausted. Consequently, there are infinite similarities and differences between two possible entities (Murphy and Medin, 1985).
This thesis builds upon Sharkey’s definition of status: Status is not what an organization does, but what an organization is (Sharkey, 2014, p: 1425). Thus, past performances and acquired quality evaluations fall short in determining an organization’s status. They only count towards status in so far as these quality assessments and interpretations of the past performance reveals traits of who the organization is. Thus status is the lens through which audiences focus their attention and evaluate organizations and their offerings, which shapes their expectations. As a consequence, high status organizations will strategically position their offerings on the high end of the quality continuum (Sharkey, 2014, p: 1384). Audiences esteem organizations that associate with other high status organizations and avoid relations with low status actors. The former would concern status spillover or enhancement effects, the
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latter leakage or erosion effects (Podolny, 1993; 2001; 2005; Podolny and Phillips, 1996;
Washington and Zajac, 2005).
In turn, high status organizations benefit from their status position through the increased potential to exercise more power (Gould, 2003), their freedom to be less constrained by categorical norms (Phillips and Zuckerman, 2001), through the positive effects on their cost structure (Podolny, 1993), higher returns (Malter, 2014) and increased market opportunities
(Jensen, 2008). Thus, the literature often speaks of the Matthew effect of high status positions
(Merton, 1968). Status is highly relevant for audience and thus has severe consequences for organizations (Jensen and Kim, 2015).
Status is thus a claim of a social position, based on agreed upon social hierarchies (Weber,
1978, p: 305). A term that is often confused with status is reputation. Following the definition by Washington and Zajac (2005), reputation is “being known”. It represents quality assessments and is based on performance outputs. Another term that often correlates with status and reputation is legitimacy, which reflects the social desirability and acceptances
(Suchman, 1995). However, according to Piazza and Castellucci (2014), legitimacy is not driven by outcome and performance. Status is thus bound to intrinsic values, which are not necessarily performance relevant. This could be gender or race for example (Sharkey, 2014, p: 1385). As a consequence, quality improvement does not erode stigma, since stigma is usually attached to intrinsic features.
The literature deals with status usually on an individual (see for instance Ya-Ru, Peterson,
Phillips, Podolny, Ridgeway, 2012) or organizational level. Examples of status orders within a category are for instance classification of Medoc wines in 5 growths, which are unchanged for
150 years (Malter, 2014). Benjamin and Podolny (1999) found that high status organizations benefit more from high status affiliations than organizations occupying lower status positions.
Zhao and Zhou (2011) studied status inconsistency, which undermines status claims of organizations.
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Status as a feature of an entire category is rare, although categories as such have status as social meaning attached (Delmestri and Greenwood, 2016). Instead, status is treated as a feature of intra-categorical distinction (Sharkey, 2014). Jensen, Kim and Kim, (2011) hinted already at the possibility of status leaps of entire categories. But it was until Delmestri and
Greenwood’s study (2016) that an empirical example was to be published. In their example the social meaning of Grappa was to become redefined through theorization of allusion. This form of theorization comprises, first, a detachment from the category, second, emulating high status category organizations, and third, sublimation. By these mechanisms the entire category could become high status, as the status of other categories was not directly contested and thus did not provoke fierce reactions and resistance (Delmestri and
Greenwood, 2016). Other studies focused on status change through the means of sub- category emergence (Brint and Karabel, 1989) or touched upon status change under the condition that stigma is understood as the lowest hierarchical status position (Vergne, 2012;
Hampel and Tracey, forthcoming).
2.3.3. Status Dynamics
Changes in status are referred to as status dynamics. Jensen, Kim and Kim (2011) introduced the concept of dynamics along the vertical and horizontal axis of a category. This system allows to trace status dynamics of organizations or entire categories not only as a vertical expansion. It offers a more complex visualization and analysis of interrelated dynamics, involving horizontal and vertical expansion at the same time.
The microbrewery movement for instance concerns a horizontal meaning expansion, as it conveys different values opposed to the mainstream beer brewing companies. It transmits values of craftsmanship and an indisputable focus on quality in opposition to the industrial beer production (Carroll and Swaminathan, 2000). These characteristics (among others) differentiate microbrewers from regular beer companies. Thus, Jensen, Kim and Kim (2011)
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speak of a horizontal category expansion. Also vertically, microbreweries occupy a different position, based on the same values and higher product quality. Jensen (2010) found similar dynamics in the emergence of the genre of porn comedy. Also in this case, the novel category reveals a horizontal expansion, as it differentiates from regular comedy as well as from regular pornography. Vertically, this new genre seems inferior.
However, taking all these examples of status dynamics into account, status orders are difficult to change (Lounsbury and Rao, 2004; Malter, 2014; Washington and Zajac, 2005). This is partly, because status maintenance is a central concern to markets. Too much fluidity would create uncertainty and ambiguity. Examples of category status stability are Ivy League
Universities3 in the US, Oxbridge4 and the Russel Group5 Universities in the UK, the Grandes
Ecoles in France or the big 4 accounting companies. All successfully secured their prestigious positions (Kodeih and Greenwood, 2014).
2.4. Authenticity of Categories
The concept of authenticity is a recurrent phenomenon in the category literature. Although usually not in the focus of analysis, authenticity seems to play a pivotal role for audiences to make sense of the category offerings. Negro, Hannan and Rao (2010; 2011) speak of authenticity as a main argument that defecting organizations have to face and re-interpret.
Delmestri and Greenwood (2016) touch upon the concept of authenticity of fine Grappa production as an artisanal product of craftsmanship that helped the entire category to reach higher status acclaims. Weber, Heinze and deSoucey (2008) speak of authenticity codes that the social movement of grass-fed beef production thrives on as an alternative logic, anti- modern and anti-scientific in nature, which as a consequence allowed the movement to
3 Ivy League refers to a group of old and prestigious universities in the US. The Ivy League itself is a sports league of the universities of Brown, Dartmouth, Columbia, Cornell, Harvard, Princeton, Pennsylvania, and Yale. The reference of ivy illustrates the tradition of old university building having ivy growing on their brick walls. 4 Oxbridge refers to the two leading universities in the UK, Oxford and Cambridge. 5 The Russel Group comprises the 24 leading universities in the UK. 22. May 2017 Daniel Semper 27/211
experience a leap from low to high reputation. The underlying authenticity code is that grass- fed beef is sustainable.
Kovacs, Hannan and Lehman (2014) studied authenticity in restaurant settings. In their study authenticity is understood as family-owned, independent and specialist restaurants, in opposition to generalist, non-family owned, chain restaurants, which are demarcated as inauthentic. Their results based on restaurant ratings reveal that authenticity is assigned higher value.
The search for authenticity, for the authentic experience, seems increasingly important for customers in creative industries and experience goods and services. It appears as a quest for enchantment in a thoroughly disenchanted modernity, a quest for purity in a world of industrialization, a quest for origin and tradition in an ever changing environment. Authenticity is taken as an absolute value in contemporary life (Lindholm, 2008, p: 1).
Peterson (1997) draws on the development of the field of country music in the US, driven by professionalization, according to modern market and management principles. The professionalization of the field lead to a loss of authenticity which then in turn required a reinvention of tradition to speak with Ranger and Hobsbawm (1983). Industrialized processes of production driven by science and technology in art or creative industries are usually obscured, disguised, whereas the specialty, uniqueness and capability of craftsmanship in relation to origin and historical roots, are celebrated in public.
Thus, the phenomenon of authenticity is socially constructed. It is not inherent in an object.
Conversely, it is granted or rejected by the audience. The necessity to explicitly claim for authenticity usually only comes into play when it is questioned by the respective clientele
(Peterson, 2005). It then appears as a form of impression management (Goffman, 1978) aimed at enchanting the audience. The concept of authenticity fabrication attracts a lot of attention from marketers in recent years. The idea is to strive a comparative advantage
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through brand authenticity (Beverland, 2009; Gilmore and Pine, 2007). The underlying assumption is that the authenticity claims seem strategically constructed to impress a certain audience and vaguely correspond with the “reality” of its inner (production) processes.
Another reading of authenticity refers to the notion of purity and truth (Lindholm, 2008).
Authenticity as truthfulness is understood as an expression of the inner nature of something, a truthfulness to its origin, a maintenance of a certain tradition. However, authenticity is seen as a crucial factor for success in creative industries, experiential goods, services and tourism
(Jones, Anand and Alvarez, 2005; Lindholm, 2008; Beverland, 2009). Customers increasingly seem to seek the authentic experience. The audience’ belief in the authenticity of a piece of art or an experience is essential to have credibility as an artist (Peterson, 1997; Lindholm,
2008;). The slow food movement seeks for purity and regionality as a moral imperative in opposition to the inauthentic industrialized food (Lindholm, 2008: 74). Authenticity, merely claimed or true, requires a process of becoming authentic in the first place and of being recognized and accepted as authentic in the consequence. Between these two steps a process of professionalization erodes the original authenticity, which then in turn has to be re- established by fabricated claims (Peterson, 1997).
When country music was yet in its infancy, not marketed, not established as a music genre, the artists where by nature authentic in what they did and how they performed their music.
Once the process of professionalization set in the scene became rationalized. Agents appeared, music was recorded, records were distributed, the music went on air, session musicians found their way into the scene, songwriters were employed, music sheets were published, the artists were more and more formally educated on their instrument, etc. Labor division, specialization, long term strategic contracts modernized the field in rational, economic terms. However, these new well-trained musicians lost the original spirit and
“dirtiness" of traditional country music. As a consequence, to repair the lack of credibility,
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authenticity claims were strategically fabricated to re-establish the credibility as authentic country music artists. Hank Williams stated: “you have to plow a lot of ground and look at the backside of a mule for a lot of years to sing a country song” (Peterson, 1997: 217).
The strategic decisions to fabricate authenticity claims require continuous efforts in authenticity work (Peterson, 2005). Peterson lists group membership, status identity (not based on quality but on authenticity), role performance as important features of authenticity work. According to Beverland (2005) the creation of symbolic stories and the re-interpretation and adaption of history is essential. Institutionalized orders of classification systems foster the perception of authenticity by formalizing scripts and regulations. Collectives are seen as authentic if their biological heritage can be traced back. Secondly, the members of such a collective have to follow the norms of the community in a culturally valued manner (Lindholm,
2008: 2). These norms and practices are binding and thus constitute identity as they are likewise constituted by a common identity. Lindholm (2008: 84) refers to the Frenchness of champagne as follows: “this wine resembles us, it is made in our image, it sparkles our intellect, it is lively like our language.” In this statement the connection to a mutual identity
(national or regional) becomes visible.
As a consequence, the loss of truthfulness to the origins through the process of rationalization leads to the need to develop myths to function as social glue. Just like in country music, also in the wine industry, this strategic de-coupling takes place. Behind closed doors science and technology dominates the practices in Bordeaux but towards the customer artisanal wine- making and truthfulness to the particular history of the chateau are celebrated (Lindholm,
2008). According to Beverland (2005) this holds true for the majority (if not all) top tier wines in the world. They all share the passion for craftsmanship, hand work, a dedication to the soil.
The magic seems to be all about terroir. The enchantment of the aura of a Bordeaux wine impacts on the willingness of customers to pay more for the wines than for others (Ulin, 1995).
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The classification of the Medoc wines fostered the institutionalization of Bordeaux as being superior and authentic (Beverland, 2005) and hence justifies higher prizes (Malter, 2014).
This classification scheme refers to origin and a long-standing tradition mystified by its history, more precisely the way in which the history is portrayed. It also safeguards the reputation and guarantees authenticity to the consumer, as the classification system operates as almost an iron cage towards regulation of practices and taste. To put the limelight on history helps obscure the industrial parts of the process (Beverland, 2005). This argument stands in line with Anderson (2006) and Ranger and Hobsbawm`s (1983) historical analysis of the creation of myths and the invention of tradition to create a sense of communality and belonging.
Mythification, the creation of a myth, seems an essential part in authenticity construction.
Country music would have not been accepted as authentic without the myth of the country singer plowing the fields with a mule (Peterson, 2013). A myth is often mistaken for something purely invented. Although Ranger and Hobsbawm (1983) speak of invented traditions, their focus lies upon the social construction of what is henceforth understood as a tradition, cumulating in a historical fact. Barthes stresses the semiological nature of a myth. Myth, according to him, is a type of speech, a second order semiological system, which signifies signs (Barthes, 1972, p: 116). Thus, the social meaning of a myth itself belongs to the history it creates. However, myths are not invented in order to hide anything. Rather, myths distort perceptions. Myths are made of shapeless associations and nebulous condensations
(Barthes, 1972, p: 119). What we see as signification is in fact the myth itself. More importantly, every myth has an imperative character (Barthes, 1972, p: 124). As such, the audience is subjected to its intentional force.
Although myths do not hide anything, they can be strategically positioned in a way that bundles attention. As a consequence, the focus of the limelight usually leaves other aspects in the dark. The power of rationalized myths leaves ambiguous aspects and questions in the dark. Trouillot (1995) speaks of silencing the past, in this respect.
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Stigmatization would be an example of aspects people would often wish to be silenced.
Connecting the organizational field level and societal institutional spheres, Zilber (2006) speaks of myths as rationality nested in broader societal belief systems. In her study, the rational high-tech myths appear nested in beliefs of nationalism, individualism, and enchantment, which are generic Israeli myths themselves.
However, Ferris, Fedor, Chachere and Pondy (1989) found that myths contribute to more meaningful interpretations of phenomena. In their study this seems particularly true in an intra-organizational context. Boje, Fedor and Rowland (1982) defined a myth system as a structure of beliefs within organizations that serves as the taken for granted logic base for the organizations and their members. Hence, myths interlock people with their beliefs. Myths are created in interplay with the organizational political arena and the social environment.
2.5. Stigmatized Categories
Stigma is a socially constructed mark that discredits the bearer (Hampel and Tracey, forthcoming). Goffman (2009) distinguishes between three types of stigma: physical abominations, character blemishes and tribal signs (associated with certain ethnicities).
Adopted upon organizations, stigma refers to a mark given by audiences that discredits organizations as fundamentally flawed and morally questionable (Devers, Dewett, Mishina and Belsito, 2009). As a consequence, audiences avoid interaction with stigmatized organizations, withhold resources (Goffman, 2009) or show open hostility (Durand and
Vergne, 2014). Interaction with a stigmatized organization involves the threat of stigma transfer (Hudson and Okhuysen, 2009). This applies to individuals, organizations and categories alike. Thus, stigma attached to a category has the effect of keeping audiences at a safety-distance. They try to avoid a non-beneficial association with a stigmatized category
(Devers, Dewett, Mishina and Belsito, 2009: Hudson and Okhuysen, 2009). No company wants to be officially involved with an arms dealer (Vergne, 2012) or cadaver trade or be seen
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as the supplier for the deadly venom that will execute the prisoner in the death row (Anteby,
2010). Rarely, people would openly admit to consume pornography (Jensen, 2010).
The effects of stigmatization attached to categories are moderated by the category structure, its fuzziness, contrast and similarity with other categories (Ruef and Patterson, 2009; Kovacs and Hannan, 2010; Wry and Lounsbury, 2013).
Stigma is the ultimate lack of (moral and pragmatic) legitimacy. Legitimacy is usually reached when a nascent group of actors agree on a collective identity defining story, explaining the community’s core values, purpose and practices. Once agreed upon it can become institutionalized and creates a symbolic boundary (Wry, Lounsury and Glynn, 2011). The same practices apply to the process of stigmatization. Audiences agree upon the collective identity of homosexual men and the respective values attached to this label for instance. The boundary practices associated with this label transcend to the social practices of gay people who seem to preferably meet in bathhouses (see for instance Hudson and Okhuysen, 2009).
Evaluators’ judgments are pivotal to create and reinforce such boundaries as they are critical voices in the process of validation and a central bridge between customers and organizations, particularly in experience good industries. Through these evaluation processes discourse is produced and circulated, which influences audiences’ perceptions and expectations, in short, what they think of organizations and their products and services (Hardy and Phillips, 1998).
They can also help create de novo categories in translating meaning and providing sense- making tools to the audience (see for instance Khaire and Wadhwani, 2010).
Hence, arbiters play an essential role in influencing audiences’ perceptions, which allows for organizations and categories to become destigmatized and thus legitimate.
The literature traditionally sees stigma removal through firing or decoupling as appropriate strategy (see for instance Elsbach and Sutton, 1992). Current approaches also entail the option to strategically employ the stigma to the organization’s benefit. Thus, organizations seem to have three options in respect to the stigma they bear. Either, they try to make use of
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it through co-opting (Tracey and Phillips, 2015). In this case, organizations employ the benefits a stigma creates, as it brings attention and a certain sense of urgency (Helms and
Patterson, 2014; Tracey and Phillips, 2015). Martial arts organizations have positive repercussions when they coopt the stigma of violence (Helms, and Patterson, 2014). Social workers being subject to stigmatization based on refugee work face identity crises. As a consequence, these social workers engage in identity work, which in turn reveals positive consequences from external audiences (Tracey and Phillips, 2015). A second strategic option is to shield the negative effects by concealing the stigma in order to minimize negative ramifications (Hudson and Okhuysen, 2009; Reinmoeller and Ansari, 2016). Hudson and
Okhuysen (2009) show that bathhouses employ strategic boundary management practices to avoid unwanted attention. Reinmoeller and Ansari (2016) provide an example of strategies of stigma management, which are keeping the practices opaque and stressing the usefulness as a justification. A third approach refers to category straddling. This process dilutes the stigma and provides positive spillover effects from legitimate categories (Jensen, 2010; Carberry and
King, 2012; Durand and Vergne, 2015). Jensen’s study on comedy pornography (2010) highlighted the positive legitimacy spillover effect of category straddling. Durand and Vergne
(2014) show that divestment strategies help shield negative publicized responses. Hampel and Tracey (forthcoming) add the processes of stigma reduction and elimination work. Both processes speak to the broadening and co-opting audiences by redefining boundaries and moral norms.
Processes of de-stigmatization always involve shifts in the categorical system along the horizontal and vertical axis. Either, it leads to a re-definition, thus to a horizontal shift or to a vertical leap along the status hierarchy, or both together (see for instance Hampel and
Tracey, forthcoming). Thus, de-stigmatization of entire categories speaks to category dynamics.
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2.6. Category Dynamics
Categories are mostly treated as stable entities (Lena and Peterson, 2008; Ruef and
Patterson, 2009) or at least the scholarly emphasis lies upon their stability (Lounsbury and
Rao, 2004; Durand and Paolella, 2013; Kennedy and Fiss, 2013). However, recent interest in how categories emerge. In this vein, the thesis answers a call by Kennedy and Fiss (2013) to shed light into the so far neglected question of how categories emerge and disappear, and how they blend or fragment into subcategories. So far, category emergence (Kennedy, 2008;
Khaire and Wadhwani, 2010; Navis and Glynn, 2010) as well as blending and straddling
(Jensen, 2010; Vergne, 2012) reflect an agentic approach.
Category dynamics account for interaction and change of categories. The focus in the literature lies on self-categorization, the strategic decision to create a new category or become a member of a certain category, and act upon its categorical imperative.
Forms of category dynamics are category emergence, which can be de-novo or through bricolage. Despite the differentiation in the literature between new and de-novo categories, the ontological variations remain vague. Both require a re-interpretation and adaption of already existing features and characteristics. De-novo categories are for instance the grass- fed beef movement thriving on an alternative logic of anti-modernity and -science (Weber,
Heinze and deSoucey, 2008), or the case of the emergence of modern architecture by integrating existing institutional logics of commerce, religion, state and family, depending on the clientele (Jones, Maoret, Massa and Svejenova, 2012). Jensen (2010) explains the category emergence of porn-comedy through a blending process of both forms. Kennedy, Lo and Lounsbury (2010) speak of blending as a process that changes meaning, which can be beneficial for the perception of the new category.
Khaire and Wadhwani (2010) explain the emergence of modern Indian art through the process of blending modern Western art and traditional Indian art. Rosa, Porac, Runser-
Spanjol and Saxon (1999) discuss the socio-cognitive foundation underlying blended
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categories, such as the minivan. Negro, Hannan and Rao (2010) debate the success of blended categories depending on the category contrast. Jensen (2010) speaks of the creation of a new market identity of a blended category that brings legitimacy through shifting the focus of attention towards features of the prior legitimate category. Negro, Hannan and Rao
(2011) speak in this respect of category reinterpretation. Also the revolution in the French cuisine from Haute Cuisine to Nouvelle Cuisine follows the creation of a new identity and a fragmentation into traditionalists and modernists (Rao, Monin and Durand, 2003). The clear manifestation of a new market identity depends also on the category contrast. Concerning de- novo and new categories, high contrast seems to have different ramifications. High contrast makes de-novo categories easier to be recognized but nevertheless at the same time it makes it harder for audiences to understand them (Jones, Maoret, Massa and Svejenova
2012). Conversely, a hybrid (new) category allows audience to draw on already known characteristics.
These examples reveal category dynamics of emergence of a new or de-novo category based on blending or bricolage (Jensen, 2010; Jones Maoret, Massa and Svenjenova, 2012), or a fragmentation into sub-categories (Rao, Monin and Durand, 2003; Negro, Hannan and
Rao, 2010; 2011). Status is usually seen as a driving force that increases the likelihood of success of the new movements and categories. It was the central chefs in the French cuisine revolution who had sufficient legitimacy and freedom to experiment and alter the social practices of the high end cuisine (Rao, Monin and Durand, 2003). In cases of low status actors, critics seem to fill the power and legitimacy void, as portrayed in the study on modern
Indian art (Khaire and Wadhwani, 2010). Also in the study on the status leap of Grappa as an entire category, the support and benevolence of critics plays an important role (Delmestri and
Greenwood, 2016).
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This highlights the importance of various actors in change processes to theorize and thus influence the institutionalization of new categories and organizational forms. One influential factor that appears recurrently in the category emergence literature and related publications is the actorhood of the profession.
A special case of category emergence in the domain of creative industries concerns genre emergence. Croidieu, Rueling and Boutinot (2016) studied the emergence of creative genres in the Australian wine industry. Their insights reveal four mechanisms of shifting and layering of metrics, analogies with established creative industries and practices, resonance with society-level logics, and personification that help lift a new, creative genre out of a commodity based industry. There are many similarities with this thesis besides the case itself. However, first, the thesis applies a different approach, as it does not focus on the distinction of creative vs. commodity industries. Rather, both types of genres fall together in the final argument in this thesis, as commodification and creativity appears to be the two spirals of the Australian wine DNA. Analogous to this metaphor, both strands are connected with each other and more importantly, both build the structure inseparably form each other. Secondly, this thesis applies a broader perspective on categorization as an intrinsically cultural phenomenon. As such, genre or category emergence is deeply embedded in societal beliefs, which are themselves rooted in history and its myths. Thus, this thesis integrates a historical perspective that reaches beyond the immediate success phase of Penfolds Grange starting in the 1950s. This thesis fully acknowledges the findings by Croidieu, Rueling and Boutinot (2016). The mechanisms of shifting and layering of metrics makes critics’ ratings accessible, comparable and compelling. However, this only applies to highbrow judgment. It does not apply to low and middle class wines, as they are usually not rated by critics. The second mechanism of finding analogies with established creative industries seems in question, as I argue that the emulation of European wine standards in the 19c was not successful, whereas the invention of modern winemaking as an anti-European approach proved successful in the end.
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Especially, the basis of the argument of relating to European traditions on the Grange label seems odd, as it was attached only after its initial success, not from the beginning, which would not make a lot of sense, since Max Schubert wanted to create an Australian wine, not an Australian copy of a European wine. A similarity between Croidieu, Rueling and Boutinot’s study (2016) and the thesis is the resonance of practices with societal logics of national identity and national pride. The last mechanism of personification, touches upon the same grounds with the mechanism of mythification, as employed in this thesis. Mythification reaches beyond personification, as it also stresses the inseparability of the nexus of Max
Schubert as a historical person with the myth of Max Schubert as the renegade, which seems not an accurate historical portrayal (Hooke, 1994), and the myth of science in modern winemaking. The personification alone does not account for the interconnectedness of the three aspects, which altogether constitute the perception of Australians (and probably also international audiences) of this iconic wine, Penfolds Grange.
2.7. The Role of the Profession in the Theorization of Change
Category dynamics necessarily involves change processes. Categorization refers to a process of institutionalization, the theorization, acceptance and ultimately taken for grantedness of new or re-defined categories. According to the institutional literature, such an endeavor is usually achieved by institutional entrepreneurs (DiMaggio, 1988) or through institutional work (Lawrence, Suddaby and Leca, 2009). The approach of institutional entrepreneurship is increasingly criticized for the exaggeration of human agency in the form of hyper-muscular actors (Lawrence, Suddaby and Leca, 2009) or deus ex machina (Delmestri,
2006), resisting institutional pressure of conformity. Besides, this approach neglects the embeddedness of social actors in their institutional environment.
Current answers to the question of how institutional settings change over time address effects of institutional partaking, convening (Dorado, 2005) and distributed agency (Quack, 2007).
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Mahoney and Thelen (2010) speak of gradual institutional change. The multifaceted character of distributed agency progresses in small steps rather than as a rapid transformation. In this respect change processes are triggered and fueled by often abstract or mundane actors.
Especially, professions hold the potential power to initiate, influence and perform such change processes (Greenwood and Suddaby, 2006; Suddaby and Viale, 2011; Muzio, Brock,
Suddaby, 2013). Suddaby and Viale (2011) argue that professional projects (or professionalization for that matter) always carry within them projects of institutionalization.
Based on their expertise, they are able to bundle attention and influence the spin of the process in the course of theorization. As such, professions hold an endogenous potential for institutionalization processes.
Why is this? Abbott (1988) pointed out the political nature of professional activity. He defined the concept of professions vaguely as exclusive occupational groups of people who apply a highly specified and somewhat abstract knowledge to particular cases, also referred to as expertise (Abbott, 1988, p: 8). This expertise serves as a basis to claim particular and exclusive rights over the control of occupational practices. Also, it sets the boundary of the profession.
Professions themselves build upon the rationalization of work. The process of rationalization, the cornerstone of modernity, thrives upon a rational spirit (Weber, 1981). Division of labor and formal specialization is one consequence. However, in contemporary settings, much of this process is achieved through scientific progress and the authority of its triumph (Drori,
Meyer, Ramirez and Schofer, 2003; Drori, Meyer and Hwang, 2009). Scientific rationalization requires a shift from craftsmanship, based on inherited skills and on the job training, towards professionalization, based on formal education, which demarcates the becoming of modern societies and their social orders (Weber, 1981). Science appears as the epitome of rationalization, which in itself becomes a rationalized myth, reaching far beyond scientification, the progress and diffusion of scientific practices. Moreover, scientization
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entails the pseudo-religious belief in scientific progress and its teleological promise of panacea and salvation.
Professions, have the capability to challenge the incumbent institutional order through their legitimacy and expertise (Suddaby and Viale, 2011). Further, professions engage in boundary work of the field and identity work of their occupation. Rosa and Porac (2002), for instance, demonstrate that in the motor-cycle industry categorizations have different levels of persistence, which depend on the source ideas come from. Those coming from scientific authority had greater persistence.
Not only have professions power over social processes. Social processes also lead to the professionalization of manifold domains. Hwang and Powell (2009) studied the rationalization of charity. The non-profit sector shows more and more influences of professionalism (Drori,
Meyer, and Hwang, 2009). The wine industry shifts from craftsmanship towards professionalism (Bottura, Corrado, Forgues, and Odorici, forthcoming). Jones, Maoret, Massa and Svejenova (2012) speak of the emergence of the profession of modern architecture building on one hand upon symbolic boundaries between modern and ancient architecture, and on the other hand upon formal fine arts education. In their study (Jones, Maoret, Massa and Svejenova, 2012), the fight over the social meaning could be solved through category expansion and integration, although shared meaning is usually reached through boundary contraction (Colyvas and Powell, 2006). Boundary expansion leaves a certain vagueness due to a lack of clear definitions.
A central aspect of institutional change is theorization (Scott, 2013) that results in the legitimacy of practices. It is the crucial process of negotiating the alteration of meanings attached to a category (Aldrich and Fiol, 1994). Theorization provides templates and rationalities for the diffusion of novel practices (Rao, Monin and Durand, 2003). Theorization is a discursive persuasion of audiences by introducing a solution to a problem and the justification of this solution (Tolbert and Zucker, 1999). The aim is to raise awareness and
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urgency for change and translate the claims into ‘understandable and compelling formats’
(Greenwood and Suddaby, 2006, Nigam and Ocasio, 2010; Phillips and Oswick, 2012). Such a process involves the introduction of solutions to problems, which reach general acknowledgement, through providing a reasonable and convincing justification of the solution put forth (Tolbert and Zucker, 1999).
The role of professional associations in change processes is crucial for legitimating the change and its directions (Greenwood, Suddaby and Hinings, 2002). Often it is up to professional associations to point out failures and introduce potential solutions, which are then conceptualized. These solutions will be negotiated and contextualized towards the various local requirements, which in turn endorses further local innovations and shapes their diffusion (Greenwood, Suddaby and Hinings, 2002).
Institutional change requires precipitating jolts, which are for instance driven by local entrepreneurship that can disturb the consensus about social reality and its consequences.
Problems become visible during this process. Theorization offers potential solutions, which are justified based on moral and pragmatic legitimacy. Over time, the novel institutional order will diffuse through objectification and reach full pragmatic legitimacy (Greenwood, Suddaby and Hinings, 2002). The actorhood of professionalism, driven by scientization, reveals traits of legitimacy bound to the imperative of the natural and moral law (Meyer and Jepperson, 2000).
Every form of institutionalized imperative requires a social foundation, a movement that carries its values and beliefs, a contextualization concretion of ideas that originated from theoretical and abstract formulations (Strang and Meyer, 1993).
Theorization differs in regard to its context, from emerging to mature fields (Greenwood,
Suddaby and Hinings, 2002; Rao, Monin and Durand, 2003; Maguire, Hardy and Lawrence,
2004). Besides, the professional context matters. Professional settings might differ from purely economic settings. In economic settings, (quasi-) scientific arguments prevail to claim
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legitimacy (Abrahamson, 1996). In professional settings normative alignment would be expected (Greenwood, Suddaby and Hinings, 2002, p: 75; Rao, Monin and Durand, 2003).
Theorization, however, does not only seem to address the process of meaning creation and the agreement upon a solution, Munir (2005) introduced theorization as an overarching phenomenon that spans the entire change process.
2.8. Gaps in the Literature and Research Question
The literature on organizational status is well established. This is true for studies concerning status as an independent variable, explaining effects on organizations (Podolny, 1993, 2001,
2005; Podolny and Phillips, 1996; Benjamin and Podolny, 1999; Malter, 2014). Status was also integrated and conceptualized as integrative aspect of organizations and their market identity in respect to their category membership (Jensen, Kim and Kim, 2011). However, the literature seems to lack empirical evidence of dynamics of organizational status. This is particularly true concerning organizational status in respect to the category, in which the organization takes membership. Thus, the first part of this thesis addresses this shortcoming.
A category break-out scenario of an organization, as represented by Penfolds Grange6, goes counter the literature, as status as a differentiating characteristic of organizations is, first, related to the category the organization has membership in, and, second, in order to gain legitimacy, organizations have to conform to the categorical imperative before differentiation becomes possible (Suchman, 1999).
The case of Penfolds Grange provides not only an empirical example of organizational status attainment dynamics, it also offers insights into category dynamics in respect to the break out of the Grange from its vertical (national) category of colonial (Australian) wine, in order to become member of the horizontal (global) category of iconic wines. In addition, this case
6 The wine Grange Hermitage and the wine-company Penfolds are referred to interchangeably, as one is always associated with the other. The same applies to Casella and their Yellow Tail wines. 22. May 2017 Daniel Semper 42/211
provides insights into the process of legitimization that runs counter the literature. This speaks to the theoretical question of how organizations can decouple from their categories in order to raise their status position, which I will further refer to as breaking the category glass ceiling.
Therefore, this part of the thesis answers to calls for studying status dynamics (Piazza and
Castellucci, 2014) and to how status can change over time (Sauder, Lynn and Podolny,
2012).
The second part of the thesis addresses the gaps in the literature on category emergence.
The literature refers to category emergence as a process of fragmentation into sub-categories through blending or bricolage (see for instance Rao, Monin and Durand, 2003; Jensen, 2010) or a de-novo category creation on the basis of prior existing legitimate domains (see for instance Jones, Maoret, Massa and Svejenova, 2012). The legitimacy of the novel category is granted on the basis of already legitimate characteristics, identities, practices or institutional logics (Weber, Heinze and deSoucey, 2008; Jensen, 2010). The question of how sub- category emergence legitimizes itself as a democratized middlebrow category, which takes over the mass markets, is still underdeveloped, as sub-categories usually refer to niche markets, such as modern architecture (Jones, Maoret, Massa and Svejenova, 2012), grass- fed beef (Weber, Heinze, deSoucey, 2008), modern Indian art (Khaire and Wadhwani, 2010) or pornographic comedy (Jensen, 2010). All of these sub-categories speak to highbrow audience appeal and scrutiny. Thus, this part of the thesis responds to a call by Kennedy and
Fiss (2013) for further elaboration of category dynamics of emergence and dissolution. In addition, this part provides insights into the multiplicity of status positions, according to the categorical reference point. The empirical case of Casella’s Yellow Tail offers an example of an organization holding multiple status positions, depending on the category affiliation.
Concerning the de-novo category of critter wines, a global category of middlebrow wines,
Yellow Tail stands out prominently, thus having a high status position within this category.
Concerning the category of Australian wine, Yellow Tail holds a middle status position.
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Jensen, Kim and Kim (2011) introduced the concept of multiple status positions. They referred to differences in status positions for organizations occupying multiple positions in the market space. In contrast, this study refers to different status positions of the same offerings, in the same market. Thus, the literature would assume pressure to conformity for middle status actors (Phillips and Zuckerman, 2001), the multiplicity of status positions seems to allow Yellow Tail to act beyond the categorical imperative.
The third part of the thesis aims at contributing to category change processes in mature fields, which are widely neglected in the literature (Delmestri and Greenwood, 2016). This seems especially relevant for category dynamics beyond fragmentation into subcategories or spinning off new categories through bricolage and blending. Besides, the literature suggests that category changes are achieved more easily when the boundaries are fuzzy (Hannan,
Polos and Carroll, 2007). Both, initial category fuzziness and fragmentation, does not apply to the empirical case of this thesis, as Australian wine was sharply defined by heritage and well known for its characteristics in the market, specifically the UK market, stigmatized as low class colonial wine.
Status change of entire categories are rare in the literature. Brint and Karabel (1989) studied status change of organizations in the educational field, by strategically spinning off a sub- category. So far, it seems that there are only two empirical studies providing cases of category status leaps. One deals with the emergence of Grappa as a high class beverage, equal in status to Whisky and Cognac (Delmestri and Greenwood, 2016). The second study introduced the de-stigmatization process of the travel agency Cook, finally reaching high status acclaim, which, although not explicitly mentioned, seems to have status attainment effects for the entire category of organized travelling (Hampel and Tracey, forthcoming).
Despite the common grounds with these two studies, which are the evolution from a low status or even stigmatized background, the difference lies within the fact that both studies deal with category re-definitions. This means that the categories themselves did not
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fundamentally change. It was the meaning attached to the categories that changed over time.
The thesis provides an empirical case of status change of not only two distinct organizations, but of the entire category as such, based on innovations, which are fundamental to the category. Thus, one would assume, that the novel practices increase the product quality, which in turn increases the awareness of audiences. Based on the accumulation of positive performance evaluations by audiences, the literature would predict a status increase (Podolny and Phillips, 1996). Since the quality of (some) Australian wines, which tried to emulate wines of Burgundy type (Evans, 1973, p: 16), was perceived as very high already in the 19c, directly compared to high class Bordeaux wines, this argument seems to fall short to account for the rise of Australian wine. Moreover, new categories attaining high status positions, have to become legitimate in order to be successful. This happens usually on the basis of high status emulation (Delmestri and Greenwood, 2016). In this respect, the findings run counter to the literature, as the category defection occurred as a deviation from legitimate practices instead of an emulation of high status practices. Another distinction of this thesis lies in its empirical case of mass markets. The Grappa case (Delmestri and Greenwood, 2016) focusses on a niche market instead.
History and the perception of history plays an important part in this process. The role of history in institutional change processes seems mostly neglected in the literature. This is especially the case concerning the manifold ways history can be written, altered and interpreted to strategically manipulate the audience (for an exception see Hills and Voronov,
2013).
The institutional literature implies a problem formulation as first step in any theorization process. It can be assumed that the mark of a stigma attachment might contribute to a problem formulation, the thesis reveals silence on this aspect of history. A loud silence this is, as the missing of historical references, beyond the success stories of Penfolds Grange, speaks for itself. Instead of a reference to the historical heritage, the focus was on innovations
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and future. The focus on modernity and an anti-past attitude is known for category emergence
(see for instance Jones, Maoret, Massa and Svejenova, 2012). However, silencing the past appears to be novel.
Professions and professional association are usually understood as agents of reproduction
(cf. Kellogg, 2009; Ozturk, Amis and Greenwood, 2016). Greenwood, Suddaby and Hinings
(2002) demonstrated the potential of professional associations in theorizing change processes concerning their profession. However, empirical cases of professions amplifying and shaping change processes in which they are embedded in are rare. This can be explained by the nature of professions and their associations to safeguard the profession, to license and train their members, monitor the practices and the boundary of the profession, and discipline deviant behavior (Abbott, 1988). All of which rather speaks for an interest in maintenance of power relations and status quo than it does for change.
Scientization (Schofer, McEneaney, Drori, Meyer, and Ramirez, 2003; Drori, Meyer, and
Hwang, 2009) builds upon the professions of science. Thus, scientization provides an important aspect of professionalization in modern societies, as science and technology seems omnipresent in industry, medicine, pharma etc. However, the literature seems to fall short in integrating scientization as an aspect of many modern professions and its potential for change.
Therefore, this thesis not only answers to calls for studying category dynamics (Kennedy, Lo and Lounsbury, 2010), and how an entire category can shift in status (Delmestri and
Greenwood, 2016), but also to the question of how professions contribute to the change process of category emergence, which fundamentally redefines their role and status.
The literature on categories (Rosch and Mervis, 1981) builds upon the existence of one prototype or exemplar, around which the entire category typically revolves, based on the nature of the category imperative of conformity and optimal distinction within categories
(Zuckerman, 1999). This logical connection between the population density and the
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prominence of the prototype seems accurate for many cases. Apple, for instance, serves well as an example as prototype for the smart-phone category, around which most other companies revolve by emulating the gold standard of the smart phone category, set by the i- phone. However, it might not hold true for all cases, as this thesis will show. The exemplar might also be at the periphery of the category, not in the center of the organizational population.
The question of legitimacy should distinguish between the cognitive acceptance of an organization as an existing entity and its pragmatic and moral value (Kennedy and Fiss,
2013). Thus, focusing on the latter two, legitimacy seems usually granted upon some sort of authority. Again, this can be the case of professions and professional associations
(Greenwood, Suddaby and Hinings, 2002) or of critics (Khaire and Wadhwani, 2010), or both together (Jones, Maoret, Massa and Svejenova, 2012). Another source of legitimacy can be found in institutional logics (Weber, Heinze and deSoucey, 2008) or in professions drawing on institutional logics (Jones, Maoret, Massa and Svejenova, 2012). This thesis aims at shedding light upon the question of how organizations gain legitimacy in mass markets, which are often neglected by the highbrow judgment of critics. This seems particularly true in experience goods industries. Adding to this question, the literature falls short so far in understanding the complexity and ambiguity of authenticity claims in the process of reaching legitimacy.
The motivational question of this thesis asks how a stigmatized national market category could detach its stigma and become high status by ignoring the category imperative of the overarching global market category. What were the conditions that allowed the category to legitimately re-invent itself and in the process to be perceived as authentic?
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3. Methodology
This study emerged out of a genuine interest in the wine industry and the recent developments, putting the focus of attention more and more towards the „New World“ wine regions, such as Australia, the United States of America, Chile, Argentina but also more exotic wine origins, such as Canada, China or India. The upcoming wine producing nations, challenge the status quo of the „Old World“ wine producing countries. This creates a fierce momentum for innovation and spurs ambiguity and complexity. Newcomers produce often similar wines to the „Old World“ standards, trying to emulate European style wines, mostly
Bordeaux wines. Such examples can be found from New Zealand and China to the Canadian
Okanagan Valley7. The rationale, however, for the selection of the Australian wine industry as a case lies in its difference in this respect. Australia seems recognised as unique, successful and distinct in the wine world.
What particularly sparked my interest was that Australia seemed to be the only example taking a different path, producing wine that is capable of matching European top quality products but does not simply copy the style and practices of wine production. Although the most famous example of Australian fine winemaking, Penfolds Grange carries a direct reference to Bordeaux on its label since the 1980s, which was then altered to a reference to
Europe in the 1990s, the grape varieties, style and production methods vary vastly from those dominating in the Bordelais. Intuitively, being non-conformist in a highly contested global arena seems problematic in terms of gaining legitimacy and thus positive market response.
Nevertheless, Australia became a central player in the global wine industry. These reasons speak for the suitability of the case on Australian wine for an institutional analysis of category change and a respective status shift. Given that the market categories are by definition institutions (Durand and Paolella, 2013; Vergne and Wry, 2014), they are politically negotiated
7 Examples for Bordeaux style wines are a) for NZ: „Larose“ by Stonyridge, b) for China „Great Wall“ by China Great Wall Wine Co. and c) for Canada „Oculus“ by Mission Hill. 22. May 2017 Daniel Semper 48/211
and socially constructed social orders (Meyer and Rowan, 1977; Berger and Luckmann,
1991). Thus, a qualitative methodology seems the appropriate interpretative method to carve out hidden meanings and mechanisms responsible for meaning, value and practice changes in institutional settings. Since the purpose of this study is to develop theory, the method employed follows an inductive approach (Eisenhardt, 1989; Gioia, Corley, and Hamilton,
2013). The case study draws on a three-month field study conducted in the fall of 2014. The approach builds upon grounded theory (Glaser & Strauss, 1967; Corbin & Strauss, 2014) and encompasses multiple sources of evidence (Bryman & Bell, 2015). The case study design includes historical analysis, in-depth interviews, documents, artefacts, media coverage, reviews & ratings, as well as industry statistics (Yin, 2013).
Moreover, since the study is concerned with understanding how category change evolved over time and under what conditions, it employs a processual perspective, integrating narrations of any kind to account for what happened (Langley, 1999). In order to capture the context of such change processes it seems pivotal to employ a qualitative methodology
(Pettigrew, 1992).
3.1. Data Collection
I gathered data from three sources for this study: interviews, archival material and observations. The aim was to capture a broad range of vantage points on the issue of how the category of Australian wine is perceived by relevant Australian and international audiences and how this collective meaning was achieved. Tables 1, 2 and 3 summarize the data collection process. I started with a pilot interview with an Austrian/Australian winemaker as well as reading background literature and publications on Australian wine by wine critic
Jancis Robinson. These first steps confirmed the relevance and appropriateness of Australian wine as the case for this study.
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The sampling strategy followed a purposeful and theoretical sampling in several stages, aiming at balancing variation and similarity. The sampling process started with an interview with one winemaker, which then lead to the purposeful expansion of the sample (Patton,
2002; Suri, 2011), following a theoretical principle (Glaser and Strauss, 1967; Glaser, 2002).
This approach aimed at reaching variation in the sample. The idea was to cover a 360° perspective on the winemaking field in Australia including winemakers, winegrowers, wine critics, and wine scientists. Besides, the sampling aimed at gaining variation also in regard to the size of the winemaking companies, reaching from 3 hectares under vine to 8000 hectares under vine, as well as the annual production volume, reaching from 600 cases8 to 22 million cases. The sample also covers a variation in ownership structure including family run companies as well as publicly listed companies. Concerning geographical variation, the winemakers and growers were initially selected to represent the Adelaide Hills, Barossa
Valley, Coonawarra, Eden Valley, Fleurieu, McLaren Vale, the Mornington Peninsula, Hunter
Valley, and the Yarra Valley. During the first interviews in each of the regions, I tried to take advantage of the snowball strategy to enlarge the sample. The snowball effect helped aim for similarity in the sample. After the initial phase of interviews and observations, I included secondary interview data and critics’ reviews and reports into the data inventory to increase objectivity through data triangulation (Denzin, 2006). That is methodological triangulation through the use of different data sources and data triangulation through a variation in interviewees, geographical space and time, including secondary interview data. Besides and prior to data analysis I collected background information on the Australian wine industry through websites and books. This step was crucial to identify the regions and interviewees covering a broad sample of wineries, critics and scientists. The sampling continued until theoretical saturation (Glaser, 1978) was reached.
The data revealed 10 second order themes that I associated with 4 aggregate dimensions.
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These dimensions are staged as collective performances (Rao, 2001; Schüssler, Rüling and
Wittneben, 2014), although analytically distinct, their unfolding may overlap in practice. The data structure was emergent and revised several times. Once the final form crystallized, the primary data was recoded and the first-order codes refined, based on the iterative principle of qualitative research (Glaser & Strauss, 1967).
Figure 1: Data Structure
First-Order Codes Second-Order Themes Aggregate Dimensions
A1. Stigmatized nation of convicts A2. Defining the national identity 1. Problematizing colonial past History B1. Colonial wine stigma Detachment B3. Associated health issues 2. Distancing from fortified wine
C1. Anti terroir, craftsmanship, and tradition C2. Future orientation, innovativeness and scientific 3. Striking a new path in winemaking progress High Status Category D1. Formalization of education Neglect D2. Focus on scientific methods 4. Striking a new path in education D3. Separation between oenology and viticulture
E1. Books published E2. Celebrating critics’ reviews and medals E3. Celebrating prizes reached at auctions 5. Creating the myth of the renegades
F1. Narratives on being innovation leaders Category 6. Vanguard positioning F2. Pride in top national universities Mythification
G1. Anti snobbery attitude G2. Egalitarian society 7. Democratization of wine drinking G3. Early drinkability of wines
H1. Mocking established traditions H2. Taking pride in the professional environment 8. Emphasizing Modernity and professionalism
I1. Dichotomizing between New and Old World I2. Pride in quality of wines 9. Stressing scientific vanguard Stigma J1. Stressing growth Reversing J2. Stressing market dominance 10. Stressing economic success
K1. Stressing clean and sustainable production K2. Stressing health benefits 11. Stressing health benefits
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3.1.1. Interviews
Table 1 lists all interviews and the interviewees’ occupations. I tried to interview people who are central to the wine industry, as well as more marginal players. In case I could not get an interview appointment with important players, such as Penfolds, I substituted the interview as good as possible with secondary data about the company, often including secondary interview data. The interviews fall into two categories: short, semi structured interviews and long in-depth interviews, which leaned more towards a narrative approach.
Table 1: Table of Interviews Non-Archival Data Sources
(including secondary interview data)
Personal Interviews • Long interviews - Bert Salomon, 3 times, Salomon Estate, Winemaker - Larry Lockshin, University of South Australia, Dept. Marketing - Cristian Varela, AWRI, Scientist - Peter Dry, AWRI, Scientist - Dan Johnson, AWRI, Director - David Aylward, UTS, Wine Economist - Tony Battaglene, WFA, Director - Lawrie Stanford, WGGA, Director - Sigfredo Fuentes, Univ. Melbourne, Scientist - Brian Inglewood, Yering Farm, Cellar Door Manager - Allen Jenkins, Wynns Estate, Chief Viticulturalist - Andrew Murphy, Yalumba Estate, Chief Winemaker - Larry Jacobs, Hahndorf Hills Winery, Winemaker - Ruth Worgan 2 times, Little House of Red, Grapegrower - Barbara Brown, Ascella Estate, Winemaker - Greg Silkman, First Creek, Winemaker - Rodney Kempe, Lakes Folly, Winemaker - Rod Windrim, Krinklewood, Winemaker - Meredith McManus, Stomp, Winemaker - Peter Hall, McGuigan, Chief Winemaker - James Halliday, Wine Critic - Huon Hooke, Wine Critic
• Short interviews - Ian Napier, Hunter Valley Tourism & Wine Assoc., Director - Alissa Heffernan, St. Huberts, Cellar Door Manager - Alan deKeizer, Mac Forbes, Cellar Door Manager - Cellar Door Manager, Hickinbotham of Dromana - Thomas Balmer, Mantons Creek, Winemaker - John Paschke, D’Arenberg, Cellar Door Manager - Cellar Door Manager, Iron Gate Estate - Cellar Door Manager, Meerea Park - Cellar Door Manager, Lindemans Secondary Interview Data - Wolf Blass, Wolf Blass Winery, Winemaker - Mitchell Taylor, Taylors Wines, Winemaker - Ian Hickinbotham, Wynns, Winemaker 22. May 2017 Daniel Semper 52/211
- Edwin Soon, Wine Journalist - Malcolm Campbell, Campbells Wines, Rutherglen, Winemaker - Peter Wall, Yalumba, Winemaker - Max Allen, Wine Columnist, 2 interviews - Steve Lienert, Penfolds, Winemaker - Ben Glaetzer, Glaetzer WInes, Winemaker - Dan Standish, The Standish Wines, Winemaker - John Duval, John Duval Wines, Winemaker - Charles Cimicky, Cimicky Wine, Winemaker - Fiona Donald, Seppeltsfield, Winemaker - Chester Osborn, D’Arenberg, Winemaker - Sarah Marquis, Mollydooker, Winemaker - Paul Smith, Wirra Wirra, Winemaker - Mike Brown, Gumtree Wines, Winemaker - Joch Bosworth, Battle of Bosworth Wines, Winemaker - Steve Pannell, SC Pannell, Winemaker - Justin McNamee, Samuel’s George, Winmaker - Max Schultz, Penfolds, Winemaker - Kim Brebach, Winewriter Observations at - St. Huberts, Yarra Valley Production Sites, Cellar - Cold Stream Hills, Yarra Valley Doors & Laboratories - Chandon, Yarra Valley - Mac Forbes, Yarra Valley - Yering Farm, Yarra Valley - Yering Station, Yarra Valley - Tarra Warra, Yarra Valley - Hickinbotham of Dromana, Mornington - T Gallant, Mornington - Mantons Creek, Mornington - Foxeys Hangout, Mornington - Wynns, Coonawarra - Penfolds, Barossa Valley - Wolf Blass, Barossa Valley - Teusner, Barossa Valley - Torbreck, Barossa Valley - Langmeil, Barossa Valley - Lehmann, Barossa Valley - Yalumba, Barossa Valley - Henschke, Eden Valley - Sons of Eden, Eden Valley - D’Arenberg, McLaren Vale - Petaluma, Adelaide Hills - Hahndorf Hills Winery, Adelaide Hills - Little House of Red, Hunter Valley - Ascella Estate, Hunter Valley - Lindemans, Hunter Valley - Iron Gate Estate, Hunter Valley - Hope Estate, Hunter Valley - First Creek, Hunter Valley - Lakes Folly, Hunter Valley - Tempus Two, Hunter Valley - Krinklewood, Hunter Valley - McGuigan, Hunter Valley - Meerea Park, Hunter Valley - Salomon UnHof/ Salomon Estate, Krems(Austria)/Fleurieu - Australian Wine Research Centre, Waite Campus, University of Adelaide - University of Melbourne - Wine Federation Australia, Adelaide - Wine and Grape Grower Association of Australia, Adelaide - National Wine Centre Australia, Adelaide
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The in-depth interviews lasted from 45 minutes to 3 hours and were often accompanied by day long observations on production sites and cellar doors. All of them were recorded, except for one (the first interview) due to technical problems. In this case, the interview was documented through hand written notes. The short interviews were often not recorded due to the ambient noise. These interviews lasted on average half an hour. When recording was impossible, I took notes either directly during the interview or directly after.
The interviews followed different approaches depending on the different stages of the study.
The first interviews were semi-structured in nature, whereas the later interviews shifted more towards an episodic narrative approach, which allowed the interviewees to tell their stories with minimum intervention (Flick, 2000).
The final sample included primary data of 24 in-depth interviews and 10 short interviews.
Concerning the primary interview data, the sample includes 20 wine-producers from nine major wine-regions out of which 85% were family owned, reaching from small (3 hectares - annual production of 600 cases) to large (8000 hectares - 22 MM. cases) in size. 15% were publicly listed companies. The interview sample also includes two of the most influential
Australian wine critics, six wine scientists and three members of Australian wine-associations.
3.1.2. Archival Data
All data employed for analysis stemming from archival sources were selected and retrieved following the „new-archivalist“ principles of archival research (Ventresca and Mohr, 2002), focussing on ascending causality, revealing meaning systems interwoven in professional discourse and public articles as well as industry reports. The archival data set includes critics’ reviews, historical documents, statistical reports, strategy statements, and secondary interview data. The critics’ reviews comprise reviews by Jancis Robinson published online on purplepages, mentioning Australia, excluding tasting notes and wine maps, which comprehends 2136 articles. Besides, I followed James Halliday’s blog on
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australianwinecompendium.blotspot.ca., the blogs at wineeconomist.com, https://www.crikey.com.au/business/, Indayly.com.au, and drinkster.blogspot.com. Further, I read books published on key figures in the Australian wine industry, such as Max Schubert
(Hooke, 1994), books on the history of Australian wine (Laffer, 1949; Cox, 1967; Bishop,
1980; Mayo, 1986; Beeston, 1995; Pearce, 2003; McIntyre, 2009) and the current state
(Robinson, 1999; Mattinson, 2007; Wood, 2008; Lofts, 2010; Simpson, 2011; Caillard, 2013).
I reviewed the list of Australian wines awarded 100 points wine critic Robert Parker Jr. published in the Wine Advocate. In addition, I conducted an unsystematic internet search for media reports on Australian wine, adding articles published on ABC News Australian, The
Sydney Morning Herald, Businessinsider.com.au, theaustralia.com.au, The Newcastle Herald,
The Advertiser, Australian Financial Review, Suraysia Daily, and GreatWineNews.com.,
Winebusinesscom.au, and the Falstaff Magazine.
In total, the sample of contemporary articles in the news that made it into the final data set of relevant articles comprise 52 articles. In order to add an economic perspective to the newspaper articles, I drew on 14 publications on the Australian wine industry by Kym
Anderson (University of Adelaide), and David Aylward (University of Technology Sydney).
In order to understand how and in what way the values and meaning systems are portrayed and translated to the respective audiences, I also included marketing material, brochures and statements from homepages including the Wine Federation of Australia, the Wine Grape
Growers Association, Adelaide University (legal successor of the Roseworthy College), the industry body of Wine Australia, as well as documents and statements from the webpage of
Penfolds, the company producing the Grange.
Concerning the numbers accounting for the change process in the Australian wine industry, I looked into the statistics and industry reports from 1994 to 2011, published by the Australian
Bureau of Statistics, Australian Wine & Grape Authority, twenty reports published by the
Winemakers Federation of Australia, including the famous „directions to 2025 strategy report„
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and the „strategy on fortified wine strategy report“, thirty-seven reports published by the Wine
Grape Growers Association, two Deloitte industry reports, and three Rabobank reports.
The enrich the primary data interview sample, including statements from people and companies that were not part of the initial sample, I conducted an internet search for interviews and speeches by Australian winemakers and key figures in the industry. I also included a book (Barnes, 2014) on interviews with Australian winemakers to the data collection. Consequently, this added 21 interviews and one speech (held by Max Schubert at the first Australian National University Wine Symposium in Canberra, Australia in September
1979).
To access information about the (colonial) past of Australian winemaking, I analysed historical newspaper articles, retrieved from a systematic search at the National Library of Australia online system and to juxtapose these with the British (coloniser) perspective, I included historical British newspapers, which I retrieved systematically from the
BritishNewspaperArchive.co.uk. Both together account for 63 articles, stemming from the mid
20th century and earlier. Table 2 summarises the archival data (excluding the secondary interview data).
Table 2: Archival Data Inventory Archival Data Sources
(excluding secondary interview data)
Critic Reports by Jancis Robinson 2136 Wine Blogs Followed 5 Books on Australian Wine 14 Contemporary Newspaper Articles 52 Historical Newspaper Articles 63 Publications on Economic Developments 14 Statistics and Industry Body Reports 80
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3.1.3. Observations
Observations seem suitable for micro-institutional settings of how individuals make sense of everyday situations, how they create and negotiate meaning and relate to organizational practices (see for instance Bechky, 2003; Jarzabkowski, Matthiesen and Van de Ven, 2009;
Smets, Morris and Greenwood, 2012). Moreover, they offer insights into organizational values manifest in materialized practices, such as the architecture and design of tasting rooms, as well as of material aspects of exhibits, medals, trophies, tasting notes, laboratory equipment etc. Site visits also reveal how certain aspects of organizational life are hidden from the audience or presented upfront, just as some aspects are silenced during interviews or in reports, whereas other characteristics are stressed. The site visits include cellar doors, wine production sites, laboratories in wine companies, as well as research centres. They were accompanied by informal chats and sometimes by tours through the premises. I took field notes of observations directly after or in breaks between chats, tours and visits. The sample includes 35 cellar doors in 9 wine regions (as listed in chapter 3.1.), nine production sites including one laboratory, and two research centres.
Table 3: Observational Data Inventory Observational Data Sources
Cellar Door Visits Yarra Valley St. Huberts n=35 Cold Stream Hills Chandon Mac Forbes Yering Fram Yering Station Tarra Warra Mornington Peninsula Foxeys Hangout Hickinbotham of Dromana T Gallant Mantons Creek Coonawarra Wynns Barossa Valley Penfolds Wolf Blass Teusner Torbreck Langmeil Lehmann Eden Valley Yalumba
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Henschke Sons of Eden Adelaide Hills Hahndorf Hills Winery Petaluma McLaren Vale D’Arenberg Hunter Valley Little House of Red Ascella Estate Lindemans Iron Gate Estate Hope Estate First Creek Lakes Folly Tempus Two Krinklewood McGuigan Meerea Park Production Site Visits Yarra Valley Mac Forbes n=9 Coonawarra Wynns Eden Valley Yalumba Adelaide Hills Hahndorf Hills Winery Hunter Valley Hope Estate First Creek Lakes Folly
Krinklewood McGuigan Research Centre Visits Adelaide AWRI – Australian Wine Research n=2 Institute Melbourne Agriculture and Food Systems, Faculty of Veterinary and Agricultural Sciences, University of Melbourne
3.2. Data Analysis
The interviews were transcribed verbatim; field notes were documented during or right after the observations. Secondary data were included to the sample. I pursued an analysis approach following the principles of iteration through open, selective and axial coding (Corbin and Strauss, 2014). The process of revising, pattern matching, and category building aimed at formulating logical explanations and abstraction from the data (Yin, 2013). Thus, the process of gradual abstraction builds on swinging back and forth between data, theory and emerging concepts.
During the first coding process I tried to be as close to the data as possible, sometimes I coded phrases in vivo. With every iteration these concepts became denser and reduced in numbers. Thus, the key concepts emerged, collapsing into ten themes. Until this step, I tried to avoid conceptualizing themes in relation to the literature. Although the iterations included
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consulting literature to carve out which themes might be relevant and which could be abandoned, the themes emerged from the data. It was during the third analytical step of coining aggregate dimensions that I drew on literature to formulate abstract concepts. These emerging concepts were also challenged by alternative explanation drawn from alternative data, such as marketing and economics literature on the Australian wine industry, academic publications as well as industry publications. The process of constantly double checking for alternative explanations, fostered the credibility and value added of taking an institutional perspective rather than ascribing single organizations, marketing departments (Sjostrom,
Corsi and Lockshin, 2016; Williamson, Lockshin, Francis and Loose, 2016) or economic principles of innovation (Aylward, 2003; 2004a; 2004b; 2006; 2007; Aylward, Glynn and
Gibson, 2006; Aylward and Turpin, 2003), currency exchange rates (Anderson and Wittler,
2013), economic principles of growth (Anderson, 2000; 2001a; 2001b; 2004; Osmond and
Anderson, 1998) the power to account for the field level changes (see Barley and Tolbert,
1997).
The final model with an architecture of four aggregate dimensions encompass all related themes on an abstract level, explaining the dynamics of the category change, driven by 4 distinct mechanisms, connecting the macro level effects to micro level sense-making practices, narrations and strategic decision making. The core mechanisms are „history detachment“, „high status category neglect“, „category mythification“ and „stigma reversing“.
Figure 2 summarizes the core mechanisms and empirical themes. Table 4 offers an exemplary account of illustrative data, which were distilled into themes and aggregate dimensions.
The final model aims at capturing the relevant mechanisms in a chronological map. Such analytical abstraction sure falls short in portraying the change processes in all its fuzziness, ambiguity and inter-dependedness of iterative and simultaneous processes unfolding over time. Despite these pitfalls, a chronological simplification on the other hand offers a good
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overview of how things changed under what circumstances, providing an abstract causal map
(Miles and Hubermann, 1994).
3.3. Trustworthiness
To ensure trustworthiness (based on Lincoln and Guba, 1985), I employed triangulation of data. I had direct contact with the field for three months on a daily basis. Besides, my stay was prepared by intense email contacts, pilot interviews in Austria (with a winemaker present both in Austria and Australia). In addition, I had telephone as well as email contact after the field research period. During my stay I attended an industry meeting and a wine (and anti- mining) festival in the Hunter Valley. Thus, there have been manifold conversations with people involved in the wine business, beyond the formal settings of interviews or site visits.
This allowed to triangulate the data sources iteratively and look for additional sources when required. In order to balance the bias through increased intimacy with the local environment during the three months in the field, I continuously discussed the findings and emerging concepts with colleagues who were not involved in the wine business or this research project
(compare to Langley, Smallman, Tsoukas, & Van de Ven, 2013). In addition, I clarified my interpretations of the findings iteratively with winemakers and insiders in the field to constantly challenge the emerging elaborations and conclusions. This process aimed at guaranteeing a high level of credibility by improving the trustworthiness of the interpretations. However, as it is based on qualitative research, it might be possible that other researchers could draw other conclusions from the data.
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Table 4: Data Sources and Illustrations of Dimensions
Data Sources Illustrations of Dimensions
History Detachment
1. Problematizing the Colonial Past
Site Visits Australia stigmatized as land of convicts. Book in Archive First wine plantings seem as a way to civilize the country and to legitimize the presence of the colonists, establishing symbols of wealth and distinction (McIntyre, 2009 p: 306).
2. Distancing from Fortified Wine
Book in Archive The fortified wines’ in Australia long dagginess is a national shame. (Mattinson, 2007, p: 357) Newspaper Many cases of offensive behavior in public places heard in Newcastle during recent Database months, and quite a number of vagrancy charges have the drinking of cheap wines, or ‘plonk.' (The Newcastle Sun 26.08.1942) Wine Blog Max Schubert and Grange helped transform Penfolds from being makers of cheap fortifieds into one of the great wine companies of the world.’ (Richard Farmer cited by Brebach 2014).
High Status Neglect
3. Striking a New Path in Winemaking
Speech in Archive The method of production seemed fairly straightforward, but with several unorthodox features, and I felt that it would only be a matter of undertaking a complete survey of vineyards to find the correct varietal grape material. (Schubert, 1979) Personal Interview The revolution in the cellar techniques came from Australia, which were to work clean and cool. (Salomon)
4. Striking a New Path in Wine Education
Interview in Arch. You had to go to Roseworthy College for formal training to get somewhere in the industry. (Wall) Interview in Arch. You won’t make great wine without studying oenology. (McNamee) Category Mythification
5a. Creating the Myth of the Renegade Phase 1, Grange Hermitage
Wine Blog Chris Shanahan said in his 1994 obituary: ‘Like Patrick White and Sydney Nolan, Max Schubert’s genius blossomed in the early 1950s despite a post-world-war-two Australian culture that could hardly have been more hostile to originality and unconventional ways.’ (Brebach, 2014) Speech in Archive “Techniques need to be revolutionary and Australian”. (Schubert 1979) Newspaper in Arch Mr. Max Schubert Decanter Magazine’s Man of the Year. (The Canberra Time 6.03.1988) Speech in Archive It (Grange) has been almost unbeatable in wine shows, whether it be in the young vintage classes or the old open classes, having accumulated since 1962 some 117 gold, 63 silver and 34 bronze medals, plus 27 trophies and 7 championship awards. (Schubert, 1979)
5b. Creating the Myth of the Renegade, Phase 2, Yellow Tail
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Newspaper in So how is Yellow Tale a Blue Ocean product?… because Yellow Tail isn’t wine as we Archive know it — it’s a whole new thing. (WineEconomist, 2008) Website Yellow Tail wins the Oscars of the wine world. Australia’s [yellow tail] Limited Release 2005 Shiraz was named Red Wine of the Year 2011. The International Wine Challenge of Vienna (AWC) is the largest wine show in the world. (www.yellowtailwine.com)
6. Vanguard Positioning
Website Places such as the National Wine Centre in Adelaide and the National Wine and Grape Centre are leading the world in research and education. Our graduates are in high demand throughout the world. (www.rareaustralianwine.com) Personal Interview We're more technical in the amount of testing and knowledge about our wines than in Europe. We're doing 1.6 million tests a year in our lab which is double what we were doing five years ago. So we're getting more and more knowledge about our wines and with that knowledge you can make better informed decisions about what you do in the cellar. (Murphy)
7. Democratization of Wine Drinking (anti-snobbery movement)
Site Visit I do not like Riedel glasses, they are too delicate. All the swirling. I always break them. I prefer rough and down to earth stuff, Aussie style. (McGuigan) Newspaper Let it be emphasized that one of the worst enemy of the enjoyment of wine is snobbery. Database If a wine-drinker cannot also appreciate the excellent beers and ales of Australia. No true wine lover is he. (Queensland Times 24.01.1953) Stigma Reversing
8. Emphasizing Modernity and Professionalism
Personal Interview The French think it’s cute when their wines stink a little bit. (Hooke) Interview in Arch. We talk about the Old and the New World, the New World has actually older vines than the Old World. (Duval) Personal Interview Particularly in the south of France where the cooperative mentality just simply gave growers and makers in that vast region in the south of France absolutely no incentive to make better wine. (Halliday) Interview in In Europe I notice they were fairly old-fashioned or didn't actually think a hell lot about Archive winemaking, particularly in Burgundy. In Bordeaux, they are certainly thinking about it. Burgundy was very backwards, still making a lot of odd wines, and a lot of people not knowing really what they were doing. (Osborn)
9. Stressing Scientific Vanguard
Personal Interview European companies now have got their shit together. That's only a relatively recent phenomenon. Historically there were - bacteria with spoilage and hygiene was just like they were the norm not the exception. If you were working on a wine in France and it's knock off time you just walk away, you leave everything and you have all the indigenous micro flaw and things like that. (Hall) Newspaper Australian wine makers have, in general, overtaken French quality at the bottom and Database middle of the market. (The Canberra Times 02.01.1995)
10. Stressing Economic Success Personal Interview Since more than 20 years, Australia is dominating the global wine market in the sense of quality for money for rich red wines. There were no other companies which could possibly reach such a volume of production at all prize levels. (Salomon)
Newspaper in Most expensive wine bottle in the world: Penfolds Ampoule: 200,000 dollars. Archive (DailyMail.co.uk, 30.06.2012)
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Personal Interview I still think the number of brands is increasing, the number of labels is increasing it never stops growing. (Hooke)
11. Stressing Health Benefits and Sustainability
Personal Interview Probably a core value would be that we're really determined to hand our vineyards on to future generations in better condition than they are today. (Jenkins) Personal Interview Australia produces flawless wines, no faults, no bacteria spoilage. (Hooke) Site Visit Chinese ladies particularly like Australian red wines, as they are clean-skin and well made, without faults, fruit only alcoholic drinks, which foregrounds the benefits of the vines being healthy and good for the female skin. (McGuigan)
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4. Research Context
This study depicts a global phenomenon in the wine industry that had its origin in Australia.
Both innovations, the Grange and the Yellow Tail, changed the global landscape of winemaking, the wine market and its categories. The focus of this analysis lies upon the central and dominant group of wine companies in Australian. However, it does not neglect the existence of market niches encompassing „Old World9“ type of wines. Despite the presence in various wine ratings and wine media, these wines are marginal in economic terms. In contrast to the dominant market players, these niche organizations most often perceive themselves not as real Australian. Rather they coopt with their European heritage and often relate to a certain Europeanness, mostly Frenchness, of their wines.
The Australian wine industry is rich and diverse. It offers a huge variety of wines and winemaking ideologies. This study, however, addresses the characteristics of the central winemakers and global players, in terms of economic success and market dominance.
4.1. A Short Overview of the History of Australian Wine
In just 200 years, Australia's wine industry has grown from a few small plantings to an industry known throughout the world for quality, innovation and depth. Australian wines have received manifold international awards, competing favourably against long-established international wine industries. Australian wines grace the menus of many restaurants around the globe. There are hardly any shelves in wine stores and supermarkets that do not offer
Australian wines.
All of this happened despite the fact that Australia did not have native wine grapes, unlike
Europe and America. Originally, Australia was thought to become the empire’s vineyard.
Australia’s rich natural resources were of strategic interest for Britain to support the British economy with raw material (Bouchard, 2008, p: 183) or as Simon (1967, p: 607) put it,
9 “old world” is usually used in interviews as a synonym for European vis a vis the “new world”, Australia, New Zealand, North- and South America, as distinct from Europe. 22. May 2017 Daniel Semper 64/211
Australia was to Britain a bit as Algeria was to France, the supplier of cheap wines for people who could not afford or did not appreciate the good stuff. The wines from down under should eventually replace imports from other European countries (Faith, 2003, p: 11).
The first vines were planted in Sydney in 1788. The wine cuttings and several rooted vines stemmed from France and were transported from the Cape of Good Hope. They were shipped with the fleet from Britain to the penal colony of Australia (Kelly, 1961; Beeston,
1994). The first attempts to grow vines in Sydney did not turn out successfully. However, other attempts in the hinterlands of Sydney were more successful in vine cultivation. Wines of
Australian origin were available then from the 1820s onwards (Hartley, 2008).
The early Australian wine industry was greatly influenced by James Busby, who not only brought high quality cuttings from France and Spain, but also wrote books and manuals on how to grow these vines and produce good quality wines10. The rise of the French grape variety Shiraz (Syrah) dates back to these days. The influence Busby had on winemaking in
Australia concerns an emulation of European winemaking philosophies, since he “translated”
European techniques and methods into the Australian context.
A landmark for the early recognition of fine wines from Australia was the great exhibition in
London, 1851, which celebrated the triumph of Australian agriculture, in particular for
Australian wines in comparison with first-class European wines (Faith, 2003).
The first major successes and consequent drawbacks happened two decades later in Vienna and Paris at the great exhibitions. During a blind tasting at the 1873 Vienna Exhibition, French judges praised wines from Victoria. Once the judges discovered the origin of the wines they withdrew their ratings on the grounds that wines of that quality must be of French origin. In
1878, a Shiraz from Victoria, competing in the Paris Exhibition, was directly compared to a
Chateau Margaux from Bordeaux (Evans, 1973, p: 35; Faith, 2003). The official argument for the withdrawal of awards for Australian wines in Vienna and Paris were based on the doubt
10 James Busby published Treatise on the Culture of the Vine in 1825, A Manual of Plain Directions for Planting and Cultivating Vineyards and for Making Wine in New South Wales in 1830 and Journal and Tour through the Vineyards of Spain and France in 1833. 22. May 2017 Daniel Semper 65/211
about the honesty of these wines since they were unusually strong (Faith, 2003, p: 50). The two prominent figures for this agenda were Dr. Thudichum, a medical doctor and expert on drinks and diet, and Monsieur Dupre, a chemist. Both claimed that the wines from Australia must have been adultered and fortified, as it was unthinkable at the time that wines could possibly reach 14% alcohol through natural fermentation. Thus, so they thought, spirits must have been added. These claims were highly featured in the British press, which lead to an open discrediting of wines from Australia.
Since Australia, thus, had a difficult stand in the global wine market, the UK market became the major anchor and point of orientation. The domestic wine consumption leant more towards beer than wine. Consequently, Australian wines depended (and still depend largely) on exports. The mark of low quality adultered wines from Australia became a self-fulfilling prophecy for a long time. Australia was the supplier of (mainly) low quality products for low prices. As such, Australia followed the shift in demand in the British market for fortified wines.
This period lasted until the end of the 1960s, when fortified wine sales were taken over by those of table wines (Hemming, 2011).
This decade also marks the dawn of modern winemaking in Australia, and globally, as
Australia is understood as the birthplace of modern winemaking. Penfolds launched the
Grange, which immediately after its official launch started to win over the entire wine industry, collecting award after award. Many other wines followed suite. Some of these wines stand in the European tradition of winemaking, such as Chris Ringland and Henschke, others followed the path of scientific winemaking as put forth by Penfolds.
The ideal type of Old World winemaking, still predominant in the Burgundy for instance, entails small-scale production, regionality, terroir, craftsmanship, tradition and inherited knowledge, the unity of viticulture (farming) and oenology (winemaking), and family ownership. Conversely, the New World wine producers (especially in Australia) are often publicly listed companies, employ large scale production facilities, are science and technology
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driven, source fruit from parcels independent from terroir and region, separate winemaking from grape growing, as grapes are often bought on arm’s length market relations, and build upon formal university education in the science of oenology.
Fueled by enthusiasm over the success of Australian fine wine in the international press and in countless competitions, export boomed. All of a sudden, Australia was at the epicenter of wine production globally. The Winemakers`s Federation of Australia, founded in 1989, called out for “strategy 2025”. The paper stressed the importance of marketing, building competitiveness through successful branding of wine Australia, celebrating brand champions, and strengthen the world class reputation of Australian fine wine (Wine Australia: Directions to
2025). All the bold forecasts were soon exceeded. The targeted export rate of 1 billion AUD was reached in 1999 (Faith, 2003, p: 174). Besides, the importance given to marketing techniques was new in the wine industry. Not only that wine from Australia was branded with a national tag attached as Australian Wine, not based on regional origin and terroir, marketing also re-invented the language of wine labels. It was no longer necessary to be an expert in wines in order to understand and decipher the wine codes on the label. New World wine labels, Australian to the fore, are easily understandable. They list the place of origin and grape variety, which is not common practice in many wine regions, such as France, Spain or
Italy. This transparency helped new world wines (Veseth, 2011, p: 33). Conversely to wines from Australia, a Chablis does not tell the customer that it is a Chardonnay from Burgundy, a
Montrachet a Pinot Noir, a Pouilly Fume or Sancerre Sauvignon Blancs, a typical Bordeaux made from Cabernet Sauvignon, Merlot and Cabernet Franc, a Champagne typically made of
Pinot Noir, Chardonnay and Meunier, a Barolo made of Nebbiolo, a Brunello and Chianti of
Sangiovese Grosso etc. The profound change of winemaking practices of scientific winemaking went hand in hand with the change in marketing, which both in turn lead winemakers to reconsider their attitude towards customers (Faith, 2003, p: 3).
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Figure 2: Timeline of Crucial Events in the Australian Wine Industry
Est. Winemakers Est. Wine Grape Growers Federation of Australia Est. Roseworthy College Associations Australia
14934 Directions art 2 17/4/07 5:32 PM Page 1
Export Boom
Est. Australian Wine WINE AUSTRALIA: DIRECTIONS TO 2025 Research Institute AN INDUSTRY STRATEGY FOR SUSTAINABLE SUCCESS WFA: Strategy 2015 Est. Oenology Diploma
MAY 2007 First Vine Plantings in Australia
1788 1883 1936 1951 1955 1960 1976 1978 1989 1996 2000 2003 2006
Yellow Tail Wines No.1 on US market
Growing field of Wine Critics, e.g. The Wine Advocate
Start of official production of Penfolds Grange Hermitage
Start of Yellow Tail Wines
First Vintage of Penfolds Grange Hermitage 100 points by Robert Parker Jr. for Penfolds Grange Hermitage
4.2. Penfolds Grange
Many in the wine business would say that the Australian wine (his-)story starts with the
Grange. Max Schubert, a young man of German descent, is the man associated with the wine revolution per se. Schubert started to work for Penfolds as a post boy before he earned a job as laboratory assistant. His financial background did not allow him to study winemaking at
Roseworthy College. Thus, he enrolled to the Adelaide School of Mines to receive a training in chemistry, as bacteria spoilage was the biggest problem and challenge of the time. Every year Penfolds lost about 20% of production due to bacteria spoilage. There was disease everywhere (Hooke, 1994).
During World War II, Schubert felt the need to prove to be undoubtedly Australian, as people of German descent were often accused for being collaborators. Returning after the war,
Penfolds sent Schubert back to Europe in order to learn the tricks of the trade of fine Sherry
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production in Spain. However, his visit also lead him to Bordeaux where he got introduced to mature wines and their making by Christian Cruse. The taste and maturation potential of over
30 years impressed Schubert.
„The amazing part is that laboratory control as we know it is entirely absent, and yet these people make excellent wine with horse and cow stables, fowl houses, etc., in close proximity to the press house.“ (Schubert cited in Hooke, 1994 , p: 42)
Schubert’s first experiments started after his visit to Europe and mounted in the first vintage of
Grange in 1951. Inspired by what he saw in Bordeaux, the Grange was intended to be of similar class and maturation potential. However, his approach to the making of this wine was completely unknown at the time. He designed this wine on the board, only from imagination.
This approach allowed the wine to be thought and theoretically developed from scratch. Since
Schubert knew what product he wanted at the end, he reversely engineered the entire production process. This started with the sampling of vineyards from all over the country, to the choice of oak barrels11, and more importantly the use of vanguard techniques of cool fermentation, ph control, and the use of general cooling systems in a (chemically) clean production environment. Barrel fermentation was not only meant to season the wine but also for better maturation. Schubert never intended to imitate European winemaking. Instead, he set out to create something completely new.
„I never set out to make French wine. I never wanted nor believed it possible. It was always my belief that we could not make a French wine here and they could not make ours in France.“ (Schubert cited in Hooke, 1994, p: 46).
11 Schubert used new oak American barrels, which was unthinkable at the time, since new oak strongly influences the taste of the wine. Critics accused this method as a form of manipulation of taste. Only used oak barrels would produce pure wine, since the used wood does not longer influence the taste of the liquid to such an extent. 22. May 2017 Daniel Semper 69/211
Although much of the glory is attributed to Max Schubert nowadays, the role of Penfolds winemaker Ray Beckwith was central to allow Schubert to produce the Grange. Beckwith was a pioneer on the importance of ph control in the winemaking process. Influenced by Ian
Hickinbotham during his studies at Roseworthy College, he revolutionized the winemaking process by accurately controlling and thus stabilizing the wine. Today this is seen as a ground-breaking technique and the foundation of modern winemaking (Caillard, 2013).
However, the Grange was profoundly misunderstood in the beginning. As the wine was intended to mature for at least 20 years, it tasted too powerful and tannic (Faith, 2003, p: 91).
The panel of tasters at Penfolds turned it down. As one critic put it:
“Schubert, I congratulate you. A very good, dry port, which no one in their right mind will buy – let alone drink.” (John Davoren cited in Hooke, 1994, p: 2)
“A concoction of wild fruits and sundry berries with crushed ants predominating.” (another critic cited in Hooke, 1994, p: 2)
It went as far as that Schubert was ordered to stop producing the Grange. Nevertheless, he secretly continued to produce small quantities. As the secret activities came out, a second tasting was called in in 1960. By then the Grange from 1951 has softened and matured significantly. The verdict was positive, which saved Schubert from being sacked since he ignored an order from the board.
After Grange Hermitage was then officially released in 1961, the wine won gold medal after gold medal, award after award. Over the years Grange accumulated over 50 gold medals
(Caillard, 2013). The vintage from 1990 was named wine of the year by the Wine Spectator magazine (winespectator.com). It was the first non-European wine to reach 100 points by
Robert Parker Jr. for the 1976 vintage, which could be repeated in 2008 (wine-searcher.com).
The success and subsequent glorification of Max Schubert and the Grange type casted the idea of fine Australian wine (Faith, 2003, p: 94). 22. May 2017 Daniel Semper 70/211
The Strategy 2025 paper by the Winemakers Federation of Australia, initiated by Brian
Croser, launched in 1996, contemplated the period from 1966 to 1996 as the epoch of the
Australian wine revolution, which indirectly refers to the success of the Grange and its many imitators and followers.
Langton’s, Australia’s most prominent wine auction house, established in 1991 classified the
Australian wine industry into exceptional, outstanding, excellent, distinguished and non- classified wines. Penfolds Grange leads the list. Langton’s describes its price development of the Grange as follows: “Healthy price increases occurred with the successive releases of
1982 to 1989 Grange. This was a golden period for Grange on the Australian secondary wine market. It was not until the release of the 1990 vintage that international market perceptions of Grange changed. In 1995 the highly influential Wine Spectator magazine named the 1990
Penfolds Grange as its wine of the year, for the first time choosing a wine produced outside
California and France. In the same year powerful US wine writer Robert Parker Jr. proclaimed
Grange as the leading candidate for the richest, most concentrated dry red table wine on planet earth. The wine is now regularly traded at auction around the world. Its price movements are followed with the same level of interest by collectors as Bordeaux’s first growth Chateau and Burgundy’s Grand Cru” (https://www.langtons.com.au/penfolds- grange/penfolds-grange-price-history).
The Grange remained the most sought after and highly acclaimed wine from Australia. The
Grange stands for the ideal type of New World wines and is, thus, always mentioned as the exemplar for Australian (iconic) fine wines. Despite this, the most outstanding success story in economic terms was yet to come: the Yellow Tail wines.
Table 5: Examples of the Global Category of Iconic Wines
ROMANEE OPUS GRANGE PETRUS UNICO SASSICAIA CONTI ONE HERMITAGE Bordeaux, Burgundy, Spain Italy USA Australia France France
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Figure 3: Langton’s classification
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4.3. Casella’s Yellow Tail
In 2006 the American wine writer, Frank Prial, wrote about the Yellow Tail wine, „nothing like this has ever happened before in the American wine business“ (Prial cited in Taber, 2011, p:
119). Although, this seems not only true for the American market, Yellow Tail wines hit the US market in 2001 and reached a sales volume of one million cases within the first thirteen months (twelve million bottles). This makes it the most successful launch in the American wine history and caused many marketers and strategists to contemplate it as a blue ocean strategy (see for instance Kim and Mauborgne, 2015).
Yellow Tail wines are produced by Casella, an Australian family of Sicilian descent. The
Casella family was involved in the wine business for generations. John Casella received his formal training in winemaking at the Charles Sturt University. Coming from the bulk end of the market, Casella started to rethink winemaking, combining the insights of scientific winemaking he acquired at university with the family experience in bulk wine production in huge quantities.
From an Australian perspective, huge quantities only play out on a global scale. Thus, Casella researched the world wine markets and found that big, bold Australian Shiraz wines were considered interesting and good value (Taber, 2011). Driven by high expectations based on the Strategy 2025 paper and fuelled by the positive representations of Australian wine in the media and by wine critics, Casella designed a new wine, which he strategically positioned between the bestselling wine at the time, Rosemount Diamond Label Shiraz, which sold for eight USD per bottle, and cheap bulk wine (Taber, 2011, p: 126). The novelty about the wine was its easy and early drinkability. It should be smooth with soft tannins, consumer ready, reliable and of unbeatable value. The idea was to also interest new customers for wine, who were overstrained with the harshness of tannic wines, the astringency of young wines and the complicacy of the wine language and codes used on wine labels. Thus, so Casella thought, such a wine would appeal not only to novices but also to wine snobs. It had to be friendly, open, fruit driven and uncomplicated. The wine label mirrors the easiness and approachability
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of the wines. The front label (shown in figure 4) shows a funky sketch of a wallaby. It represents a non-traditionalist attitude. Instead of snobbery, the labels portray fun and adventure. This attitude seems to give Yellow Tail wines credibility. These wines do not pretend to be elitist or disguise their heritage or way of production.
An economic advantage of the early drinkability also concerns the avoidance of stocks, as the wine was ready to ship after six months after harvest (Taber, 2011, p: 129). Casella found a business partner in wine merchant Deutsch in the US and the wines were launched for 5.99
USD, dramatically undercutting the competing wines.
Figure 4: Yellow Tail front label
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The Yellow Tail wines were vastly ignored by the wine press. However, surprisingly for low price wines, there are some reviews, for instance in the wine enthusiast magazine, which notes that „there are no complaints with this bottle (Chardonnay), apple, pineapple, butter and toasted oak load the flavor package, the perfect balance and velvety of mouth feel provide a solid background“. It received 88/100 points and was rated Best Buy (cited in Taber, 2011, p:
136). There are many alternative reviews about blind tastings on the internet, which usually rate Yellow Tail wines as top among wines of the same price range or even against higher priced wines. Even Robert Parker Jr. rated the vintage of 2002 for five Yellow Tail wines. All of them scored between 83 and 87/100 points (Taber, 2011, p: 136). However, all reviews seem to agree on one thing, Yellow Tail wines offer a lot of value. More importantly, and beyond the little but positive attention Yellow Tail wines received in the wine press, the average wine drinkers seem to have fallen for the Yellow Tail wines. The simplicity, honesty, reliability and approachability had won their hearts. Consequently, Yellow Tail became the number one imported wine in the US market by 2003.
A short overview on the economic development of Yellow Tail wines: production started in
2000. One year later Casella sold 112.000 cases of Yellow Tail to the US market. In 2005 US sales reached 7.5 million cases. Yellow Tail accounts for 11% of all US imports in 2005.
(Veseth, 2011, p: 139). In the UK market, Yellow Tail sold more wine in 2000 already than all wines imported from France (wineeconomist.com). Overall, the production of Yellow Tail wines started in 2000 from scratch and reached an annual production volume of more than 11 million cases by 2008 (winetitles.com.au). This pace of growth is still unprecedented, although nowadays there are other (mainly US American wineries) that followed the example and produce quality wine on low price levels in huge quantities.12
These economic numbers put Yellow Tail wines in the focus of highbrow judgment criticism.
Thus, Yellow Tail wines are often referred to as McWine (Taber, 2011), in comparison to
12 E.g. E & J Gallo Winery dominates the market with its brand Carlo Rossi with an annual production volume of 17.6 million cases. (http://www.nytimes.com/1985/05/08/garden/wine-talk-223639.html) 22. May 2017 Daniel Semper 75/211
McDonaldization, or Critter Wine, referring to the funky label (Robinson, 2012).
4.4. The Roseworthy College
Necessary for the success of both, Penfolds Grange and Casella’s Yellow Tail, was a combination of product, process and market innovations. Concerning product and process innovation, chemistry was seen as the answer to all problems related to bacteria spoilage and lost production volumes. Companies like Penfolds employed chemists to sterilize the material involved in the process of winemaking and to control for spoilage throughout the process.
Later, oenologists like Ray Beckwith further developed the emerging role and range of applicability of chemistry, particularly the role of ph in the winemaking process (Bishop, 1980).
For such specialized knowledge on the job training did no longer suffice. Thus, the government of Australia appointed a four-man commission to further investigate opportunities to increase the quality of wines and decrease the amount of losses through education. Six years later, 1883, the Roseworthy College was founded at the outskirts of Adelaide. It was the country’s first and only educational establishment to train viticulturists and, later, oenologists.
Internationally, there were two influential universities offering courses in viticulture and oenology, Geisenheim in Germany and the University of Montpellier in France. However, typically winemaking skills were inherited and traditions learnt on the job in Europe. Another distinction concerns the understanding of winemaking as an all-embracing approach combining viticulture, all work related to the vines and gardens, and oenology, all work related to cellar techniques, in Europe. Instead, in Australia, students enrolled at the Rosenworthy
College either received a training in viticulture or oenology. Oenology students never saw a vineyard out in the fields (Interview Hooke). Thus, the study of oenology became highly relevant as a discipline of science, not farming. The College also included a wine making facility, where the students could gain first-hand practical cellar experience. Else, the syllabus was purely theoretical, including the study of the grape, fermentation, buildings and 22. May 2017 Daniel Semper 76/211
machinery, manufacture of red and white wine, methods of must-improving, treatments, maturing, blending, and marketing, wine diseases, analysis and adulteration, distillation and brandy-making (Bishop, 1980, p: 59). In 1936 the first diplomas in oenology were granted. By then the course was composed by three subjects: principles of winemaking, organic chemistry and microbiology (Bishop, 1980, p: 113).
The major scientific innovations in these days are connected with two men, Alan and Ian
Hickinbotham, father and son. Their areas of scientific interest included temperature control in the fermentation process. The lower temperatures and the consistency allowed for a significant improvement in wine quality and colour (Bishop, 1980, p: 51). Later, the focus was on the influence of SO2 during the fermentation process, which became then popular as anaerobe winemaking, allowing for full control of oxygenation from picking to bottling. Other important innovations were the use of pure yeast instead of natural yeast (Bishop, 1980, p:
95) and the control for acidity (ph value), which became known as the first principle of winemaking (Bishop, 1980, p: 185). The Roseworthy College put more emphasis on ph value
(and moreover on science) than any other wine education institution (Bishop, 1980, p: 186).
„It is generally recognized that the oenology course at Roseworthy is, perhaps, the outstanding course of its kind in the world“ (Leo Buring cited in Bishop, 1980, p: 231).
Before the establishment of the Roseworthy College, winemakers typically attempted to imitate European wine styles using generic wine names, such as Burgundy, Chablis, Moselle,
Sauternes etc. (Bishop, 1980, p: 171).
The influence was enormous as most winemaking families sent their scions to specialize in an oenology training at Roseworthy College. The college was the breeding ground for a new approach to winemaking, based on scientific principles. The ideas about scientific winemaking spread in the community (Faith, 2003, p: 54). Roseworthy graduates were involved in the making of more than 80% of all Australian wines in the 1950s (Bishop, 1980, p: 242).
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In 1973 the Roseworthy College merged with the University of Adelaide. Besides, the
Australian Wine Research Institute (AWRI) was established as part of the University of
Adelaide, Waite Campus, in 1955. With the specific aim to support the winemaking community with context specific research and help create good quality table wines instead of fortified wine (Allen, 2012, p: 75), the AWRI is funded with tax money, on a membership fee basis. The Roseworthy College, although its name disappeared, had a major influence on the
Australian wine industry. The name still rings in reminiscence. It would not do justice to the overall relevance of the college to attribute its merits only to theoretical and scientific developments. The college also offered an anchor for the entire wine industry in Australia and thus provided a fruitful platform for the identity creation of wine in Australia, based on scientific winemaking, the backbone of the Australian wine industry, introduced in the first oenology college of its kind.
“It is not just the climate and variety that makes our wine special. Places such as the National Wine Centre in Adelaide and the National Wine and Grape Centre are leading the world in research and education. Students can study viticulture (grape growing) and wine making at university and, once they have graduated, are in high demand throughout the world.” (Australia.gov.au)
4.5. An Economic Overview of the Australian Wine Industry
From its inception in the 18. century to the new millennium, the Australian wine industry grew in an unprecedented pace (Faith, 2003, p: 1). The growth, both on the number of wineries, as the well as in the overall production volume since the mid 1980s, is best mirrored in the export statistics, since domestic consumption remained stable. Exports increased since then from one million to six million liters in 1990 and thirty-five million in 2001.
As shown in figure 5, the area under vine grew from approximately 600.000 ha in the mid
1980s to a peak of more than 1,6 million ha in 2008 and reduced to still more than 1,4 million 22. May 2017 Daniel Semper 78/211
by 2012. In the same period the production grew from 400.000 kl to a peak of over 1,4 million kl and settled for a bit more than 1.2 million kl. Figure 6 highlights the dramatic growth in export volume from mid 19c to 2014. The number of wineries grew from approximately 500 in mid 1980s to more than 2500 in 2013.
The growth is also reflected in the expenditure in research and development as shown in figures 8. In turn the increasing investment in science and technology reflects in an exponential improvement in the ratio between employment and turnover to the number of enterprises, thus winemaking became more and more efficient.
Figure 5: Bearing1. Bearing Area area of ofVineyards, vineyards, wine Wine production, Production and wine and exports, Wine 1986 Exports to 2013 (1986 -2013)
1800000
1600000 Vine area (ha x 10) Wine production (kl) 1400000 Wine exports (kl) 1200000
1000000
800000
600000
400000
200000
0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
2. Volume, average(So AUDurce: price Anderson and value and of Aryal,export 2013)sales of Australian wine, 1990 to 2013 3500000 Average price of exports ($ per litre) RH Scale 6 Wine exports volume (kl) LH scale Wine exports value ('000 $) LH scale 3000000 5
2500000 4
2000000 3 1500000 22. May 2017 Daniel Semper 79/211 2 1000000
1 500000
0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
7. Volume of Australian wine exports to United Kingdom and world, 1854 to 2013 (kl) Figure 6: Export Volume (1850-2014) (a) Regular scale 800000
Total wine exports 70000021. Volume and value shares of imports in wine consumption in Australia, 1984 to 2013 (%) Wine exports to UK 60000025
500000 Value 20 400000 Volume
300000 15 200000
10000010
0 5 1854 1859 1864 1869 1874 1879 1884 1889 1894 1899 1904 1909 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014
(b) Log-linear scale (Source: Anderson and Aryal, 2013) 0
6 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Figure 7: Number of Wineries (1985-2013) 22. Number of wineries in Australia, 1985 to 2013 5
3000
4 2500 fold - fold
3 -
2000 -
2 1500
1 1000 Up 3,000 (200kl kl//yr, 28 Up 674,000 kl (30,600 kl/yr, 90 kl/yr, (30,600 kl 674,000 Up Up 16,000 kl Up 16,000kl (11600 kl//yr, 8 0 500 1854 1859 1864 1869 1874 1879 1884 1889 1894 1899 1904 1909 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014
0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
(graph by Anderson and Aryal, 2013)
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41. Shares of domestic wine sales, by container type, 1978 to 2013 (%)
100%
90% Sparkling+other 80%
70%
60%
50% Soft pack
40%
30%
20% Bottled still 10%
0%
Scientization: 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Figure42. R&D 8: investment,R&D Investment total and as ain percent Total of andwine sales,in Percent 1984 to 2013 of Wine Sales
35 0.90 AWRI +CRCV+ other GWRDC ($m) LH scale 0.80 30 % of sales RH scale 0.70 25 0.60 20 0.50
15 0.40 0.30 10 0.20 5 0.10 0 0.00
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(Source: Anderson and Aryal, 2013)
Figure 9: Increase in Turnover in Relation to Number of Companies and Employment
(Source of data: Australian Bureau of Statistics)
These developments allowed Australia to gain a prominent place among the central global wine producing countries. In 2011 Australia was the fourth largest wine producing country
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(Australian Bureau of Statistics, Australian Wine and Grape Industry 2010-2011). The focus lay on export with only 40% of annual production destined for domestic consumption. In 2014
Australia lost its 4th tier to the US and resides now at place six, accounting for 4,25% of the total wine production in 2014 globally (www.wineinstitute.org), tripling its wine production from
1980s to 2012, tripling exports, and increasing the number of wineries by five times
(Anderson and Aryal, 2013).
Although wine is produced in every state, the majority of wine plantings are located in the
Southern regions. Wine labels show the grape variety, whereat 80% of the main grapes have to be listed, which leaves room for speculation about the remaining 20%.
The market is increasingly concentrated. Only three major wine companies are responsible for 40% of the total production volume. Approximately 84% of total wine production is covered by ten wineries. Although the number of wineries increased steadily, the major period of growth was characterized by mergers and acquisitions. Nowadays, the majority of the big labels are owned by Treasury Wine Estates, including Penfolds, Wolf Blass, Wynns, St.
Huberts, Coldstream Hills, Leo Buring, Lindemans, Rosemout Estate, Seppelt, T’Gallant along others, which account for an annual production volume of over 30 million cases and revenues of 2 billion AUD (tweglobal.com). Other two giants on the market are
Accolade/Constellation Brands comprising wineries such as Hardy’s and Tintara, and Pernod
Ricard with brands such as Wyndham and Orlando Wines, which produce the famous Jacob’s
Creek wines. Casella Wines grew in importance with their Yellow Tail wines and their recent acquisition of the prestigious brand of Peter Lehmann Wines.
The wine market is vertically differentiated. Particularly for higher price levels it reveals a high fragmentation. Conversely, the market appears homogenous for low prices (Winemakers
Federation of Australia).
Another development concerns the increasing shift towards premiumization, shifting away from fortified and bulk wine towards table wines and premium wines, whereat red wine seems
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more in favour. Concerning fine wine, surplus production is not an issue, as possible surpluses are usually downgraded to lower quality categories. The majority of market offerings is neither top-shelf trophy wine nor low quality bulk wine (Veseth, 2011, p: 5).
However, figure 10 exemplifies the development of ratings and reviews of Australian top level wines by its most famous exemplar, Penfolds Grange.
Australia employed a unique marketing approach to brand wine from Australia via the national label. This was originally put forth by big producers during colonial times through the establishment of a warehouse in London to compete on the UK market (Faith, 2003, p: 64).
This branding approach is still relevant today, which entails the advantage to side pass the necessity to label the origin of grapes by region, since in many Australian wines the sourcing of grapes includes regions from all over the continent.
Figure 10: Exemplary Rating Developments; Penfolds Grange
(Source: http://www.wine-searcher.com; http://www.wine.com/)
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40. Evolution in consumption and plantings by colour/style, 1956 to 2012 (%) (a) Shares of volume of domestic sales of Australian wine by colour/style 100%
90%
80% Fortified
70%
60% Sparkling 50%
40% White 30%
20%
10% Red
0%
Premiumization: 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Figure 11: Premiumization of Wine Plantings by Wine Grape (b) Shares of winegrape area, premium and non-premium whites and reds 100%
90%
80%
70% Non-premium white
60% Premium white 50%
40% Non-premium red 30%
20% Premium red 10%
0%
(Source: Anderson and Aryal, 2013) Figure 9: Premium and non-premium shares of wine production, Australia, 1984-85 to 1996-97 Figure 12: Premiumization in Total: Premium and Non-Premium Shares of Wine Production
100%
90%
80%
70%
60% T
50%
PER CEN PER 40%
30% Non-premium w ine Pr emium w ine 20%
10%
0% 1984- 1985- 1986- 1987- 1988- 1989- 1990- 1991- 1992- 1993- 1994- 1995- 1996- 85 86 87 88 89 90 91 92 93 94 95 96 97 YEARS (Source: Osmond Source: & Anderson, See Table 10.1998)
22. May 2017 Figure 10: Premium andDaniel non-premium Semper shares of wine 84/211 consumption, Australia, 1984-85 to 1996-97
100%
90%
80%
70%
T 60%
50%
PER CEN PER Non-premium w ine Pr emium w ine 40%
30%
20%
10%
0% 1984- 1985- 1986- 1987- 1988- 1989- 1990- 1991- 1992- 1993- 1994- 1995- 1996- 85 86 87 88 89 90 91 92 93 94 95 96 97 YEARS Source: See Table 10.
4.6. The Social and Cultural Environment The scientific revolutions coming out of the Roseworthy College and the many wineries in
Australia were embedded in a social and cultural context. In order to understand the enabling factors that allowed Australia to become a major player in the global wine industry, it seems highly relevant to shed light on the historical developments of the emerging Australian nation.
The first plantings took place in an environment of Australia being a penal colony to the British
Empire. Conversely, the huge success as an independent wine industry that provided the basis for a global wine revolution, from traditional winemaking to scientific winemaking, unfolded in an environment very different from the early days. An autonomous nation state that is. This process appears to have been paralleled by the emergence of an Australian identity that overcame the stigma of delinquency.
Winemaking in the early days was often understood as production of medicine. Penfolds for instance was a medical doctor who produced the Grange Grenache at Magill Estate to cure his patients from anaemia. In order to take effect, the wine had to be high in alcohol (Faith,
2003, p: 32). Also, wine was often used for desserts and not thought to be drunk after all
(Mattinson, 2007). This attitude paired with the attitude of the colonial masters to have a source of cheap wine for the kingdom, had a hindering effect on the development of high quality wine in Australia in the early days. However, the stigma of colonial wine and the resulting humiliation may also be of advantage on the long run, as it might have contributed to several conditions that allowed Australia to completely reinvent winemaking without caring too much about what other wine regions and respective audiences thought. Even when British wine critic Jancis Robinson brought a bottle of Penfolds Grange to a meeting of the French wine establishment in 1988, many years after reaching 100 points granted by Robert Parker
Jr., the response was obscure, as if she would bring „un vin de pharmacien”, a chemist's wine, not real wine (Jancis Robinson, 2008).
The perceived hardship of the national heritage is omnipresent. Constantly people refer to the 22. May 2017 Daniel Semper 85/211
lack of history and try to avoid to mention the penal colony times. Australians are proud to be part of the Empire (Commonwealth). At the same time, they grew out of their infancy and are independent and a relevant global player. Thus, so the second storyline usually concludes,
Australia had a rough birth and early childhood but in the end they succeeded. This glorification of tough Australians is an important aspect of Australian culture overall (Johnson,
2007). Often, the toughness directly refers to struggle with a hostile nature that formed the
Australian character. One winemaker at McGuigan told me that he disapproves Riedel wine glasses, since they are too delicate. They would easily break in his rough Australian hands
(field notes at McGuigan).
Also the cultural environment and educational environment builds upon competition and selection. Australians not only seem to face a hostile natural environment, also the social environment seems based on Darwinist principles. However, this attitude comes with a complete disregard for tradition, established norms and authorities, which in turn affects the openness and willingness of Australians to innovate (Faith, 2003, p: 1). Interestingly, similarly to the attitude of competition, mateship is a prevailing cultural value in Australia. In cooperation no attention seems to be paid to status differences (Faith, 2003, p: 5). Instead, mutual support and a strong ethos of mateship dominates (Interview Kempe).
The struggle for the becoming of an independent nation state took an exceptional path. Direct confrontation was avoided. Rather, it was a slow political game of little steps and small wins.
The history of the becoming of the Australian nation state reads as a slow motion process of two steps forward and one step backwards (represented in figure 13). In 1840 the first attempt to replace the British anthem was launched but failed. Small victories could be noted, such as the miners’ strike, known as the Eureka rebellion, which is often referred to as a mythical event of early nation forming. The end of the penal society in Australia only came in 1868.
Still, the interrelation with Britain was tight, both politically and military. In World War I
Australia fought at the side of the British army. The Australian contributions in both World 22. May 2017 Daniel Semper 86/211
Wars was widely neglected in Europe, which lead to a strong anti-Britain movement in
Australia. Only from 1948 onwards Australia could grant citizenship. 1969 was the inauguration of the Australian passport and in 1984 Australia got its own national anthem,
Advance Australia Fair (Bouchard, 2008).
The importance of proving an Australian national identity and taking pride in being Australian seems highly relevant. This explains why Max Schubert felt the urge to go to war to silence the critics imputing Australian of foreign (non-British) descent to being collaborators with the enemy (Hooke, 1994).
Nationalism and pride in the new state of Australia partly builds upon the anti-
European/British stance, partly on the silencing of the colonial times. This is particularly true in the wine industry. When speaking about the Australian past and heritage in the wine business, people usually neglect the early days of colonial wine. Even the early victories and success stories are never mentioned. Instead, the narratives revolve around that „we do not have a long history here in Australia“ and then continue with Penfolds Grange. When asked about the current situation, what Australian wine stands for, people refer to both, the Grange and Yellow Tail.
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Figure 13: Landmarks in the Formation of an Australian National Identity
First attempt to adopt the national anthem and Est. of an Australian replace “God Safe the Australianization of naval fleet, Queen”. institutions: Church of independence from Attempt failed. England becomes Anglican Royal Navy. Church in Australia. British Medical Assoc. becomes John Dunmore Australian Medical Assoc. Lang founds Est. of Australia Day Australian League, seeking for Est. of Australian independence. After WWI, Australian battle merits downplayed by Britain, leads to a national anthem: Aus. League Advance Australia Fair defeated. strong anti-Britain movement
1788 1840 1850 1936 1908 1911 1918 1950 1969
1854 1868 1870 1931 1948 1960
First Law of Eureka Rebellion at Ballarat Australian citizenship (Victoria). Miners confront the army. Mythical event & symbol of the emerging nation. End of British Empire Start of the Commonwealth End of penal society. British prisoner deportation ends. All Change from English Australians are free subjects. system of measurements to metric system.
Last British troops leave. Implementation of Australian passports
Soures: Bouchard, 2008
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5. Findings
This chapter is organized around the second order themes presented in figure 1, in chapter
3..The headings will follow the logic of the four aggregate dimensions. The findings unfold by integrating statements taken from the data material, interviews, secondary interviews, online media, newspaper articles from archives and references taken from wine books. The historical documents are understood as contemporary witnesses revealing opinions, beliefs and discussed topics of the time. Contemporary documents and primary data from interviews and observations provide insights into current interpretations of historical as well as contemporary issues allowing to draw processes of sense-making and meaning creation on an institutional level.
5.1. Australia and its Colonial Past
History detachment concerns the problematizing of the past of Australia as a dependent colony in the first place and a land of convicts in particular. During interviews and also in secondary data, the usual reference to history reveals the ambiguity that on one side people in the wine industry stress the lack of history, since “Australia is the new kid on the block”
(Mattinson, 2007), and the fact that Australia has the world’s oldest vineyards13.
Also, a direct comparison of generations of families being involved in the wine business does not reveal a difference between Europe and Australia, except for extreme cases. However, so the argument goes, Europe produces wine since the Roman times, which indeed gives the impression that in comparison Europe has a long standing tradition whereas Australia just started to produce wine recently. However, wine production in ancient Rome does not have a lot in common with contemporary wine production, independent form the question whether it concerns scientific winemaking or traditional winemaking. Thus, there is no logical grounds for stating such an understatement of lacking history, except for strategic reasons.
13 Australia claims to have the oldest vineyards, since in Europe the phylloxera plague destroyed the vineyards in the late 19th century. 22. May 2017 Daniel Semper 89/211
The challenge in this respect was to highlight the blind spot, the missing point, the emptiness where there should have been references to colonial winemaking and maybe also the early successes in the great exhibitions in Europe. During interviews and site visits nobody mentioned the past before Grange Hermitage. And if confronted directly, people refused to speak about it in detail or tried to detour the conversation. So the story goes that Australian wine history starts with the innovation and launch of Penfolds Grange.
The connection people seem to make with the past is twofold. On a national identity level, the fact that Australia was a penal colony is understood as a national shame. The first vine plantings were put forth as a means to civilize the country and its people. Moreover, the cultural noblesse that goes along with wine consumption and the respective educating mission was seen as a strategy to legitimize the presence of the colonists, establishing symbols of wealth and distinction. Wine was meant as an anti-pole to the beer drinking rowdiness that Australia was known for.
“Wine for the upper class, beer for the working class. Wine growing proofed little economic value in early days in Australia. But it embodied a beneficial and transformative value to create a civilizing industry producing a civilized drink. From prison camp to civil society.” (McIntyre, 2009 p: 306)
On a wine industry level the past before the Grange covers the dark ages of fortified winemaking in Australia. These two spheres are interrelated with each other. The dependence from the UK market fueled the shift towards intensification of fortified wine production instead of table wine production. In the 1960's approximately 80% of Australian made wine was sweet fortified sherry and port styles, known in the UK as 'Colonial Wine’
(http://www.rareaustralianwine.com/wineRegions/wineHistory.asp). The later shift towards table wine production led by the Grange and other wines is in turn rather understood as an emancipatory act, away from the dependence from the Old World. This seems particularly true, since the first major markets to launch these innovative wines was the UK, traditionally, 22. May 2017 Daniel Semper 90/211
and the US and Canada. Nowadays, China becomes the most relevant market for Australian wines. The example of Treasury launching their new vintages first in China underlines this tendency (Interview Dan Johnson).
Fortified wine was not only inferior in esteem in comparison to table wines, it was also inferior as it was associated with health issues based on faulty wines and societal alcohol issues as the follow statement in the newspaper shows.
“Reduction or prohibition of the sale of strongly fortified wines would be a good thing in the view of a police officer in Newcastle to-day. He was discussing the announced intention of the Minister for Health (Mr. Kelly) to have the proposal investigated. Many cases of offensive behavior in public places heard in Newcastle during recent months, and quite a number of vagrancy charges have the drinking of cheap wines, or ‘plonk.'” (The Newcastle Sun 26.08.1942)
More and more the political awareness arose that fortified wines could potentially harm people’s health. The media in the mid 19c are full of stories on alcohol problems and social problems related to the consumption of cheap fortified wine. Concerns reflect the potential risks as this anonymous person announced that “I would like with your permission to say that
I am very much deposed to adore his surmise as to the injurious effects of crude colonial wine upon the brain” (South Australian Register 04.06.1968).
“No Inferior Wine here! Hotelkeepers to-day said that the proposed State recommendation to the Federal Government.” (The Newcastle Sun 26.08.1942)
The medical effects were vividly discussed in the media and became more and more a topic of political interest. Not only high alcohol was the concern, also the method of production was of increasing scrutiny.
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“There is vile stuff called wine not only made and sold in, but exported from the colony, which is little more than a mere drug.” (Bunyip Gawler, 05.12. 1863)
“Why it is that a natural wine of say 18 per cent strong produces a different effect as compared with wine of the same strength, but to which say 5 per cent, spirit has been added, many neither know nor care; but that the fact is so is beyond controversy.” (South Australian Register 04.06.1968)
The following long excerpt from the South Australian Register provides an ample example of the controversy of these days. On one side the quality of Australian wines is under question.
The methods of production are still considered un-scientific. This is particularly interesting since soon later Australian wines would celebrate their scientific fundament. Still, in the
1970s, Australian wine was stigmatized. In this article the term “fusel oil” is used to mark the stigma.
“To me it appears that every wine and spirit maker should keep a copy of it, that he should study it well, and even get it by heart for until it is thoroughly understood and acted on our wine and spirit trade cannot improve, nor can an article be produced that will please the public taste, and thus gradually introduced into consumption. There can be no disguising of the matter, that very few of our wines are in such a marketable condition as to please the taste of a true wine-drinker. That there are good wines in the colony I know; but the immense majority are really such immature rubbish that nobody with any taste can sip down and enjoy with a friend. … For the information of the uninitiated, that the term "fusel oil" is entirely of German origin. The term "fusel" answering to our terms nasty or abominable…. This is the only method adopted in Europe for fortifying inferior wines. Our colonial practice of mixing brandies with our wines would, I venture to say, be considered in Europe as not only wholly unscientific, but almost barbarous in its practice and its consequences on the wines so treated, for it should be borne in mind that brandies, when added to wines, never mix chemically, or "assimilate" with the wine itself, but only mix mechanically, whereas by the European process above alluded to perfect assimilation does take place, and no fusel oils are thereby added, as done by the other process.” (South Australian Register 16.04.1970)
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Thus, fortified wines were under severe criticism on multiple levels. Health and social issues were one concern. Another concern dealt with the degrading mark that Australian fortified wine, marked as “colonial wine”, was attached with. The following statements taken from wine books show the inferiority that was associated with colonial wine. In his provocative book on the wine industry, juxtaposing Old and New World, in particular France and Australia,
Australian wine critic Campbell Mattinson (2007, p: 357) wrote that “the fortified wines’ in
Australia long dagginess is a national shame. They will step back in the sun one day.”
Colonial wine was rather associated with cooking and deserts instead of a drink that accompanies a supper. “My parents had Muscat and Tokays on ice-cream” Mattinson remembers his childhood (2007, p:13). The wine anthropologist Julie McIntyre asks in her book in retrospect, “when will the British Upper Class have ceased to consider it an infra dig to place colonial wine on the table (McIntyre, 2013, p: 303).
Also the Strategy paper on fortified wine by the Winemakers Federation of Australia stresses the fact that fortified, colonial, wine disappeared from the consciousness of Australians. The
“hidden gem in Australia" (Australian Fortified Wines: The Dawning of a New Era, 2009, p: 8) has a “relevance issue and poor consumer perception” (Ibid., p: 10), “associated with cooking instead of drinking” (Ibid., p: 11). “Fortified wine is a category that is struggling due to a lack of consumer relevance” (Ibid., p: 13). The following statements taken from an Australian newspaper and a wine book testify the negative attitude towards colonial wine:
“Just as English grocers … better still, an outlet for their consumption sought amongst seafaring people, with whom many of the samples of so-called colonial wine would pass decent muster as ' sweet water grog.’” (South Australian Register 04.06.1968)
“At the early days, colonial wine as it was then called, was not regarded with much esteem by those whose standards were based on wines imported from Europe. Prejudice notoriously dies hard.” (The Wine industry of Australia, Laffer, 1949, p: iii)
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Max Schubert referred to the low esteem of wines from Australia in his speech at the first
Australian National Wine Symposium in 1979 in Canberra as follows:
“They (the wines tasted during the visit to Europe14) were of tremendous value from an educational point of view and imbued me with a desire to attempt to do something to lift the rather mediocre standard of Australian red wine in general at that time.” (Speech by Schubert, 1979)
“Max Schubert and Grange helped transform Penfolds from being makers of cheap fortifieds into one of the great wine companies of the world” (Richard Farmer cited in the online blog by
Brebach, 2014). One of the two most influential Australian wine critics, Huon Hooke, wrote in his book Max Schubert, Winemaker that much of the fortified wine Penfolds produced between the world wars was contaminated. ‘Mousy’ wines were a huge problem at the time. It was common to clean the worst of them up with charcoal, and then add caramel to put back some of the color lost in the process. The wines had to be bottled and sold quickly before ‘the mouse’ reared its head again. Metal contamination was another serious issue that Max
Schubert eventually solved by replacing metal containers and hoses with PVC (Hooke, 1994).
The Wine Museum in Adelaide provided the following badge in order to describe the phenomenon that led to turn away from fortified wines and pave the way for the wine revolution in Australia. Photograph 1, below, provides an illustration of this change from fortified to table wine production.
14 Italics by the author to help understand the context and point of reference in the quote. 22. May 2017 Daniel Semper 94/211
Photograph 1: Wine Australia Museum Adelaide, Artifact
5.2. Striking New Paths
The awareness and problematizing of Australia as a penal colony and of Australian wine as low quality colonial wine, associated with health risks, goes in parallel with the redefinition of what it means to be Australian. Both levels, the national identity level and the wine industry identity level, reflect upon each other. However, the theme of high status neglect focusses on the narratives of wine people about the becoming of (modern) Australian wine, as they understand it. The main points revolve around the notion of distinction from Europe, as the
Old World and colonial master. For one, the creation of the distinction between Old and New
World, in particular between Britain, France and Australia, concerns the philosophy of winemaking, the practices and ideology that underlies the industry. This seems to also touch upon the becoming of the national identity. In both cases, the national identity and the becoming of an independent wine industry, a distinct identity is key. Thus, the following illustrations aim at highlighting the creation of a new path, neglecting the legitimate and high status practices of the Old World. The aggregate dimension of high status neglect separates into two themes concerning the search of a new path in winemaking and a path in wine
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education. However, both new paths are united in their stance towards Europe, tradition versus innovation. The point of separation grounds in the idealization of the duality of practices, terroir vs. anti-terroir, craftsmanship versus science, small scale versus industrial scale. In short Europe is understood as the epitome of the past whereas Australia as the epitome of the future.
The following statements reveal a connection between the becoming of an Australian wine identity and of a national identity. Campbell Mattinson wrote the provocative statement that
“Australian wine is the kid from the bad side of town” (Mattinson, 2007, p.14). This statement best describes the winemakers’ attitudes revealed during interviews. Further, the renegade act of the production of Penfolds Grange is pivotal for the foundation of the Australian wine identity on many levels. On the one hand the Grange was a revolution, against all odds and norms of the time. It was designed by scientific methods and not given (and restricted) by nature. Schubert did not care about the institutionalized norms of the high status wines in
France. Instead, he took from his visit to France what he needed and then created something completely new. On the other hand, the internal resistance of Schubert who ignored the order to stop producing the Grange resonates in many interviews as well. Thus, Penfolds Grange, which is usually seen as the starting point of Australian wine history, stands for the creation of a new path, resistance towards internal authorities (the management) as well as external authorities (high status wine producing countries). Again, Mattinson coined the clearest statement that best describes this attitude, “Grange, the wine that should not even exist”
(Mattinson, 2007, p: 73). Schubert himself made the point clear that the Grange had to be not just novel but also Australian (speech by Schubert, 1979).
The debate of Old World versus New World swings back and forth in almost every interview.
Usually, the references concern the lack of history in comparison with Europe and the innovativeness of Australian firms in comparison to Europe, being restricted by rigid norms and regulations. The following statement by Andrew Murphy, chief winemaker of Yalumba,
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shows the comparison between European and Australian standards, stresses the separation between oenology and viticulture, and shows the overall ramifications.
“Well we're certainly more efficient, particularly in grape growing. Scale makes us more efficient, not being tied by regulations, GI regulations and DAC and all that sort of stuff. Particularly in the Riverland regions where we've horticulturalists. These guys are big horticulturalists: they've got grapes, almonds, oranges. If something's not working for them they'll rip it out and they'll try something new. They're quite - very prepared to put money in, mechanise, take a chance and see if it works or not. So that's one of the reasons that Australia became so successful because they could deliver so quickly because we were so flexible in what we could plant, where we could plant, what we could do and had people who had a go. People - a lot of people - we talked about Yellow Tail but the greatest achievement of Yellow Tail was they did it. No other country in the world could have done that; no other business in the world could have gone from nought to eight million cases in two and a half years. There'd be - I'd challenge you to find another business that could do it. Nobody in Europe could do that because they're too constrained by their ability to plant and gear up and gear down. So he did it. He could have not done it; he could have said oh it's too hard, but he did it.” (Interview Murphy, Yalumba)
The relevance of science is highlighted by the following excerpt, which explains the difference between the traditional European approach that follows a terroir approach, aiming at expressing the locality of the wine and its natural circumstances and the scientific approach that allows for innovation.
“Wine-making innovation puts so much power at the hands of the wine-maker to start with a given batch of inputs and take it here or here or here. In McLaren Vale near Adelaide there's some projects underway where you take - a whole bunch of different wine-makers, nine or ten, are given fruit off the same vineyard, and they go off and express their own artistic creativity in whatever they consider. You end up with completely different wines at the end.” (Interview Johnson, AWRI)
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Science is not only pivotal for progress and technological production innovation. Also, science plays an important role for preserving and exploiting the heritage from the past. This point is also reflected on moral grounds in the narratives concerning the aggregate dimension of stigma reversing in chapter 6. 4.. The chief viticulturist at Wynns explained the importance of science for his line of work as follows:
“We've also really worked hard to be innovative in terms of … so we're not losing our old vineyards and we're not losing historical ways of doing things because we value those. We're also pushing boundaries in terms of our viticulture and winemaking techniques. That means we always have … we try to always have something new to say….We're always striving, we send people to technical conferences, we contribute to technical conferences. We liaise with a whole heap of government bodies on doing research on our vineyards because with - we feel like if we do research in our own environment we're the early adopters and we know how it works in our own environment optimally to make it work for us. We have some very good staff; one of our technical viticulturists has just finished her PhD in rootstock research. That's probably part of the reason we've gained a good reputation.” (Interview Jenkins, Wynns)
This interview excerpt shows not only the importance of science and innovativeness, even for viticulture, but also the importance of interaction and cooperation with external research bodies, such as the AWRI.
To further elaborate the connection of history, heritage and innovativeness, the managing director of the Australian Wine Research Institute (AWRI) explained the connex as follows:
“But there is no doubt in my mind that the Ancient Romans would have felt that they produced the very best wines that could ever be made. Clearly they weren't. A hundred years ago, same thing. Once the mind has expanded to take hold of a new idea it never returns to its original size, and so we're today able to make some of the best wines that have ever been made, and more importantly perhaps cope with - make better wines in difficult vintages than we've ever been able to do. That's thanks solely to an army of people that are largely unrewarded and invisible behind the scenes working on the 22. May 2017 Daniel Semper 98/211
innovation side of the sector.” (Interview Johnson, AWRI)
So what is it that all these people refer to as innovations? In short, Bertold Salomon summarized that the revolution in the cellar techniques came from Australia, which were to work clean and cool (Interview Salomon). More precisely, the innovations dealt with the control for ph-value, the invention of anaerobe winemaking, by covering the grapes and further on the juice with nitrogen in order to prevent it from oxidation. The latter allows for almost perfect control of variables in the cellar and in turn the mastery of taste influencing techniques, such as micro-oxidation. The following newspaper article refers to some of these innovations:
“Highly controllable crushers and refrigerated fermentation vessels allow winemakers to make reds which retain all the fresh flavours of the grape without picking up too much of the firm mouth-puckering tannins which inhibit early enjoyment of the wine.” (The Canberra Times 14.12.1986)
Max Schubert himself explained the thoughts that lead him to innovate radically:
“The experimental hogsheads were stored in underground cellars where the temperature was constant at 15°C and fermentation was completed in twelve days as previously determined. Within a month, vast differences became apparent between the experimental hogsheads and the control cask. Whereas the control wine showed all the characteristics of a good, well-made wine cast in the orthodox mould, the experimental wine was strikingly different. The volume of bouquet, comprising raw oak mixed with natural varietal fruit, was tremendous. These characteristics were also very apparent on the palate.” (speech by Schubert, 1979)
Brebach continues along this line in his online wine-blog by stressing the factors that allowed for the radical innovation of the Grange Hermitage. By this he also stresses the connection between education and wine making practice.
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“Bacterial spoilage was a huge problem until Ray Beckwith applied some serious science to Penfolds’ winemaking. Ian Hickinbotham, a brilliant oenologist and innovator said: ‘Let’s be blunt – there would have been no Grange without Beckwith’s brilliance. Possibly, Beckwith contributed more to Australian oenology than any other and he should be recognised in the same class as Louis Pasteur. Breakthrough science on pH. ’Dr. Ray Beckwith is one of the unsung pioneers of the modern Australian wine industry,’ Andrew Caillard writes in Penfolds – The Rewards of Patience. ‘His interest in the performance and efficiency of winemaking yeasts lead to an important association with Alan Hickinbotham (Ian’s father) – a pivotal figure in Australian wine science and whose work in pH and malolactic fermentation would have profound generational effect on winemaking philosophy.’ Ray Beckwith joined Penfolds at Nuriootpa in 1935. One of the first things he noted was that ‘the heat of fermentation was a major problem because too much heat resulted in the loss of quality and the prospect of bacterial spoilage.’ Crude copper heat exchangers were used to cool things down in those days, and sometimes ice blocks were thrown into the fermenting vats. Beckwith built a new laboratory and a yeast propagation tank, and then persuaded Leslie Penfold Hyland to buy him an expensive pH meter with the Morton glass electrode. The rest, as they say, is history: the importance of pH in stabilising wine, the contribution to table wine quality made by the secondary malolactic fermentation (that converts malic acid to the softer lactic acid), and the simple trick of lowering pH after the ‘malo’ with the addition of tartaric acid, a natural constituent of wine. Ian Hickinbotham gives us a commercial context for Ray’s achievements: ‘Beckwith applied his unique knowledge to the making and husbandry of all wine types – with remarkable cost savings – when employed by Penfolds for the rest of his working life. In a nutshell, he saved the 25% wine component that previously had to be destroyed by distillation due to bacterial spoilage. From that time, around 1940, Australia became a world leader in the making of table wine.” (online blog by Brebach, 2014)
One of the dominant themes regarding science and scientific methods revolve around the wish for controlling for all possible processes and natural circumstances. In order to gain maximum control over natural risks, wine companies invest into control systems, constantly testing for irrigation, soil nutrition, weather conditions, heat, rain, bacteria and other diseases.
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One increasingly popular method is for instance to control not only through sensors in the soil but also through air control, by taking infrared pictures from drones. Wilfredo Fuentes stressed the importance of science and technology in the process of controlling as follows:
“It´s really standardized, now they can manage according to different companies and that requires monitoring, like soil condition, ah climate etc., so they can do better decisions of the management strategies for a particular field, and they are doing it so they put, first they put meteorology of meteorological station, what they (the Old World) don´t have, usually in Australia it´s very good, because you have a met station everywhere.” (Interview Fuentes, University of Melbourne)
As these excerpts already reveal, the connection between scientific winemaking and scientific education is inseparable. Thus, high status neglect not only deals with striking a new path in winemaking, but also in education. A process of formalization of education into university curricula, scientification of content, and the separation of oenology and viticulture that is. The curricula were already introduced in chapter 4.4. In short, first winemaking education broke with the European tradition of a holistic approach of viticulture and oenology as a unified winemaking approach. Australian universities, the Roseworthy College as the first of its kind, built the curricula around the distinction between these two spheres. Students had to decide whether to study agriculture with a focus on viticulture or oenology. Concerning the course in oenology, the content was all about chemistry, microbiology and technological innovations.
This was a revolution in itself, as the European counterparts did not focus on chemistry and microbiology to the same extent. The laboratory, the pilot winery and distillery, all the maths and science, that was really outstanding for the time. Roseworthy and Charles Sturt
University leant more and more towards technical knowledge (Interview, Wall).
The following interview statements reveal the importance and centrality of the university education in wine making for the industry as a whole. “You had to go to Roseworthy College for formal training to get somewhere in the industry” (Interview, Wall). Justin McNamee put
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this argument even further: “You won’t make great wine without studying oenology”
(Interview, McNamee).
“Traditionally the Australian winemaking culture has been very commercial in its approach to winemaking. Typically, you needed to be a graduate of a wine course where they taught you technically and scientifically how to make wine, adding yeast, adding acid, adding tannins, and all these additions along with grapes to wine.” (Interview, Standish)
5.3. Creating and Celebrating the Myth of Science and Progress
Striking a new path in both the practice of wine making and the formalization of the training for winemakers does not leave the people involved emotionally detached. Rather, as revealed in interviews, people take pride in being different. They celebrate the success of Penfolds
Grange and the overall Australian wine boom. Australian media are full of reports about the export statistics, ratings, reviews and prices Australian wines reached at auctions. Also, international media, in particular wine media, regularly provide stories about Australian wines portrayed with high esteem.
It is not only the wines that attract so much attention. Moreover, the data show a conglomerate of wines, brands, vintages, winemakers, wine companies, science, technology, and heroic stories of renegades and revolutions revolving around these. Thus, the repetition of these success narratives manifest in a myth about Australian wine.
The creation of the myth is twofold. Part one deals with Penfolds Grange and Max Schubert, the creator of this wine. The narratives focus on highbrow judgment of critics and celebrate medals and ratings. Part two deals with Yellow Tail, which came almost 50 years later. For part two, middlebrow judgment becomes pivotal. The ordinary wine drinker turns into the wine critic. In interviews and also in wine books the democratization of wine drinking is celebrated.
Below, a selection of books published on Australian wine, celebrating its success and its role in the global wine market. Some of these books are displayed in tasting rooms.
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Photograph 2: Cellar Door at Penfolds, Tasting Room Artifacts, Books
Photograph 3: Cellar Door at Penfolds, Tasting Room Artifacts, Books
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§ Max Schubert, Winemaker by Huon Hooke (1994) § A chapter on Yellow Tail in Blue Ocean Strategy by Kim and Mauborgne (2004) § Why the French hate us by Campbell Mattinson (2007) § Penfolds: The Rewards of Patience by Andrew Caillard (2013)
Max Schubert is made into a mythical figure of a renegade, who created the best wine possible against all odds, against the management, and against the standards of the time.
Many commentators refer to this as problematic, since Max Schubert did not seem to have anything of a renegade in reality. Brebach for instance stated that the Penfolds’ campaign to promote the Grange runs under the banner To The Renegades but “Max Schubert was a company man through and through. He might have been a bit of a maverick but he was no renegade” (Internet Blog Brebach, 2014). Instead, many other authors perpetuate the myth of the renegade. Campbell Mattinson for instance referred to the act of resistance of Max
Schubert when he ignored the order to stop production as follows: “Schubert was hiding
Grange casks behind fake walls, although the company was known for being rigid and intolerant, firing employees who smoked in the cellar on the spot” (Mattinson, 2007, p: 158).
The fact that Schubert ignored the order is one of the most prominent facts people and media reports constantly refer to when talking or writing about this wine. However, the influence of other people supporting Schubert and allowing for the secret production to happen is usually absent. Some members of the Penfold family, the chief winemaker and other important wine figures of the time, such as Dr. Max Lake supported Schubert and the Grange early on
(Hooke, 1994). However, the contributions of chief winemaker Ray Beckwith are usually silenced. It seems as there is only place for one in the limelight of attention. Chris Shanahan drew a parallel to Australian figures of national pride in arts and literature in his 1994 obituary,
“like Patrick White15 and Sydney Nolan16, Max Schubert’s genius blossomed in the early
15 Patrick Victor Martindale White is regarded as one of the most influential English speaking novelists of the 20. century. He was awarded with the Nobel prices in literature 1973. 16 Sir Sydney Nolan is regarded as one of the main artists from Australia in the 20. century. The most famous paintings refer to Australian history, bushmen and outlaws. 22. May 2017 Daniel Semper 104/211
1950s despite a post-world-war-two Australian culture that could hardly have been more hostile to originality and unconventional ways” (cited in the wine blog by Brebach, 2014).
Figure 14: Penfolds Advertisement: To The Renegades
Max Schubert described the developments in his own words as follows:
“My superiors at head office in Sydney were becoming increasingly aware of the large amount of money lying idle in their underground cellars at Magill. Representative bottles from each vintage from 1951 to 1956 were called for, and a wine tasting arranged by the then managing director. Those invited included well-known wine identities in Sydney, personal friends of the board, and top management. The result was absolutely disastrous. Simply, no one liked Grange Hermitage… I was determined to prove the Sydney people wrong and, with the help and support of Jeffrey Penfold Hyland, who was then assistant general manager of our South Australian operations, numerous tastings were arranged in and around Adelaide and at Magill. … Some of the remarks were downright rude and pained me no end. “A concoction of wild fruits and sundry berries with crushed ants predominating.” This, by a well-known, respected wine man. “Schubert, I congratulate you. A very good, dry port, which no one in their right mind will buy - let alone drink.”…The final blow came just before the 1957 vintage when I received written instructions from head office to stop production of Grange Hermitage… However, I disregarded the written instructions in part, and continued to make Grange in reduced
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quantities… This undercover production continued through to 1959 and the wines made, although good, lacked that one element which made the difference between a good wine and a great wine. In all, it was ten years from the time the first experimental Grange was made before the wine gained general acceptance and the prejudices were overcome. As the earlier vintages matured in bottle and progressively became less aggressive and more refined, people generally began to take notice, and whereas previously it had been all condemnation, I was now at least receiving some praise for the wine. In 1962, after many years’ absence from Australian wine shows, the company decided again to take part in these competitions, and Grange was first submitted as an entry in the open Claret class in the Sydney Show of that year. It was awarded a gold medal. This wine won in all fifty gold medals, until its retirement from the show arena a couple of years ago, not because it was defective in any way - in fact, in 1977 it was awarded the trophy for the best dry red in the Melbourne Show - but because my board wished to give later vintages the opportunity of winning or adding to the number of gold medals already won. … I would also like to express the hope that the production and the acceptance of Grange Hermitage as a great Australian wine has proved that we in Australia are capable of producing wines equal to the best in the world. But we must not be afraid to put into effect the strength of our own convictions, continue to use our imagination in wine-making generally, and be prepared to experiment in order to gain something extra, different and unique in the world of wine.” (speech by Schubert, 1979)
Part of this myth resonates with the becoming of the Australian national identity. A key message in both addresses the difference from the Old World, particularly from the colonial masters. This momentum goes hand in hand with the mythical figure of the renegade, both on an individual level and on a national level. Max Schubert proved to be an individual who succeeded against his masters, the management, and against the context and taste of the time, the negative and humiliating verdicts on the Grange. In addition, he also proved to be
Australian in participating in World War II. This was particularly relevant as he was of German descent. The production of the Grange was against the standards of the time, which was perceived as an act of revolution and of independence. Again, this is perfectly matched with the becoming of the Australian nation state, independent from the British Empire. Thus, being
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Australian and being the renegade appears inseparable. The “techniques needed to be revolutionary and Australian” as Schubert stated (speech by Schubert, 1979)
5.3.1. Celebrating the Grange
A major point of reference are the manifold acclaims current Australian wines received over the decades. Usually this theme refers to the Grange as the first among many wines. The special status of the Grange grounds upon the 100 points by Parker Jr. awarded in 1976, which makes it the first New World wine to have reached highest acclaims. Also of equal importance to be taken seriously among the best wines in the world, Penfolds Grange “proved that it can last over half a century” (wine blog by J. Robinson, 18.10.2008).
The stepwise process of reaching iconic status of Penfolds Grange and the overall effect for
Australian wine is documented in the newspapers. The early success of reaching maximum rating points by Robert Parker Jr. was followed by the title of Man of the Year by the
Decanter, which celebrated Max Schubert as the creator of the Grange. “Mr. Max Schubert
Decanter Magazine’s Man of the Year” (The Canberra Time 6.03.1988). However, these successes took a while to reach the audience. Reference to direct comparisons with
European, mainly French, wines are manifold in the newspapers.
“Australian red and white wines have won a large number of prizes in the Paris Wine Olympiad. The Olympiad, an international competition, was organised by a leading French wine and food magazine, Gault Millau. The results were published in the magazine last week. A spokesman for the Australian Wine Board said at the weekend that in one of the main red wine classes Australian wines won the first four places. The winners in the Shiraz Cabernet section were: Penfolds Grange Hermitage 1971 (from South Australia) 1, Stonyfell Matala, Langhornc Creek 1973 (South Australia) 2, McWilliam's Cabernet Shiraz 1971 (Griffith, NSW) 3, McWilliam's Mount Pleasant Hermitage 1966 (Hunter Valley, NSW) 4. Fifth place was taken by a Spanish red and sixth was a French wine. In the red Burgundy class, first prize was taken by a 1976 Pinot
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Noir from Tyrells in the Hunter Valley. Tyrells also won fourth prize in a white wine section with their Pinot Chardonnay. The 62 judges represented some of the leading European and world wine authorities from a total of 10 nations. The awards came on top of a stream of other international successes for Australian wines recently. At the 10th International Wine and Spirit Competition conducted in conjunction with the Bristol World Wine Show in England, Australia took a large number of honours.” (The Canberra Times 15.10.1979)
Still, 10 years after the Decanter Man of the Year award for Max Schubert, Australian newspapers commented upon a comparison between Australian and European wines twofold and often reluctantly.
“I guess the world at large does not place any Australian wines in that very top category yet. But our wines are taken seriously. And most importantly, we now make several highly individual wines that have made some international mark. Penfolds Grange Hermitage, for example, has a global following. Despite a retail price of around $ 100, it sells out within weeks of release and is due for another big price rise ahead of the 1989 vintage's release later this year. Looking over 1993's tasting notes, the most exciting wines were French, but some notable Australian wines and one New Zealand wine left strong impressions.” (The Canberra Times, 02.01.1995)
However, in the same issue another note provides a view of Penfolds Grange that reveals more self-esteem in comparison with its French counterparts.
“At the same Barossa tasting, Grange Hermitage 1971 stood in all its glory. I don't think anything from the Rhone Valley, home of the shiraz grape, is better, though a Cote Rotie 1978 from Marcel Guigal was to my taste just a nose behind.” (The Canberra Times 02.01.1995)
The self-esteem expressed by Max Schubert himself diffused more and more among the
Australian wine audience and then internationally.
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“It has been almost unbeatable in wine shows, whether it be in the young vintage classes or the old open classes, having accumulated since 1962 some 117 gold, 63 silver and 34 bronze medals, plus 27 trophies and 7 championship awards.” (speech by Schubert, 1979)
This development is testified by another 100 points awarded by Robert Parker Jr. in 2008, steady increasing release prices, which reached a level of top Bordeaux wines17. More importantly, Penfolds Grange reached outstanding price levels at auctions. A 1951 release sold for over AUD 50,000 at Langton’s auction house (Decanter, 16. June 2004). However,
Penfolds released a special issue of their Cabernet wine, the Ampoule, for a release price of
AUS 200,000. This makes it the most expensive bottle of wine sold on release price in history.
Other special release wines were launched, such as the following:
“The latest luxury offering from Penfolds, the maker of Grange, is an imperial (six-liter) bottle of 2010 Penfolds Bin 170 Kalimna Shiraz encased in an oak and eucalyptus box, made by British cabinet makers Linley. With a price tag of AU$65,500 ($60,770), the large-format bottle in the wooden case is a relative bargain compared to Penfolds’ last luxury release – a $168,000 cabinet holding an ampoule filled with 750ml of Kalimna Block 42.” (http://www.wine-searcher.com/m/2014/05/65-500-the-price-of-the-latest- penfolds-release)
“Not only was Grange ahead of its time; it was controversial. It still is today - for its richness of flavour, for its liberal use of new American oak (the fashion is now for less oak, or French oak), for the fact that its grapes are grown in many different regions (Grange is unique in the world of luxury wine for not being from a single vineyard, or a single region).” (newspaper article by Mattinson, 2013)
17 The release price of Penfolds Grange was around $ 27.50 for the 1978 vintage. It was the first Australian wine to exceed the $ 20.- level for the 1976 vintage. Today the release price is around $ 600.- which compares to top Bordeaux wines (https://www.wickman.net.au/Grange_Prices.aspx) 22. May 2017 Daniel Semper 109/211
However, the Grange is inseparably entangled with the name Max Schubert and likewise.
This is not only visible in the manifold narratives about the revolution that Schubert created by launching the Grange. Also, at the wine label there is a reference to Schubert as the renegade that created this wine against all odds.
5.3.2. Celebrating the Yellow Tale.
Mythification not only deals with the topic of celebrating Penfolds Grange and his creator Max
Schubert. In addition, also other wines are celebrated. This counts for all high rated wines in international shows and critics’ reviews, such as Chris Ringland, Henschke and others.
However, all of these wines are celebrated in the wind shadow of Penfolds success.
Conversely, one wine stands out as completely different, in all its glory, Yellow Tail. Although normally wines in this price range are not scrutinized by wine critics, Yellow Tail could gain sparse attention from this side. At Mundus Vini Yellow Tail won several gold medals, winespectator awarded Yellow Tail wines with 90+ ratings, also James Halliday, Australia’s most influential wine critic, awarded Yellow Tail wines with 95+ points. Jancis Robinson wrote in her wine blog the following:
“They say August is a slow news month but there could hardly be a story more newsworthy than the fact that Australia's most prestigious prize18 for a young red has just been won by a wine from the Yellowtail, sorry [yellow tail], range. Yellowtail (may I please drop those silly square brackets and lower case Y and all that for this intimate communication?) has been the export success story of recent Australian wine history. (wine blog by J. Robinson, 12. Aug. 2004).
Other outstanding awards are celebrated by Casella as “Yellow Tail wins the Oscars of the wine world. Australia’s [yellow tail] Limited Release 2005 Shiraz was named Red Wine of the
18 The Jimmy Watson Memorial Trophy awards annually the best one or maximum two-year-old dry wine in Australia. It is the most prestigious wine award in Australia. 22. May 2017 Daniel Semper 110/211
Year 2011. The International Wine Challenge of Vienna (AWC) is the largest wine show in the world” (www.yellowtailwine.com). In addition, there are many wine blogs contemplating the comparison of Yellow Tail against other, usually more expensive, wines in blind tastings.
“Three of us took the two best-selling Yellow Tail varietals, Shiraz and Chardonnay, and matched them against Hardy’s Nottage Hill, Jacobs Creek, and Lindemans (bin 50 Shiraz and bin 65 Chardonnay), all Australian and all selling around the same price range. We also threw a highly-regarded expensive wine into each tasting: the Petaluma Shiraz and the Cape Mentelle Chardonnay. ... For the Chardonnay tasting the Yellow Tail finished second, after the Hardy’s. ... I liked the Yellow Tail's vanilla-scented nose, but found little varietal character that indicated to me I was drinking a Chardonnay. It came across as just an unexceptional but perfectly drinkable inexpensive white wine. The Yellow Tail Shiraz, however, was something very different. It swept our tasting: two of us ranked it first, and one second after the Petaluma. The wine has lovely fruit; a little residual sugar is just enough to sweeten the fruit, but not enough to make the wine itself taste sweet. And the flavors are exceptional for such a low-priced wine -- an appealing raspberry nose, soft and easy to drink yet full-bodied rather than thin, with a long, lingering aftertaste. Wow.” (Wallstreet Journal article by Stan Sesser, 13. Jan. 2006, http://www.wsj.com/articles/SB113711997199345682).
This is also confirmed in several interviews. Christian Varela from the AWRI stated that “at different tastings I have seen that they want to be the wine drinkable and easy and good right when it´s bottled, or maybe half a year later, even if it´s a very rich and heavy wine which would take if it´s European whatever bottle will take years to be drinkable, at least five years”
(Interview Varela, AWRI). The director of the AWRI detailed the importance of the early and easy approachability of the new generation of wines like Yellow Tail as follows:
“Well what I'm meaning by that is if you go to a barbecue - this is what we do on the weekends in Australia - if you go to a barbecue and you engage with someone who
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doesn't know much about wine, often they will say I like this wine, and someone like me will say I'm interested, why do you like this wine? The answer will be because it's smooth. So the tannin or astringency or bitterness is not there that we would call mouth feel, texture is very silky. There's probably not a lot of complexity to it but it is just simple fruits, the raspberries and strawberries that are all there and obvious, I like this, smooth. That level of offering is something that a new to wine person probably starts their wine journey drinking that kind of product. Some will stay there their whole life. That's, if you like, the - I don't want to call it an immature palate or anything like that. That's more the kind of angle I'm heading for, someone who just doesn't have a great deal of experience in wine or learned to appreciate some of the nuances that can come with a more complex beverage.” (Interview Johnson, AWRI)
In other words, Yellow Tail reinvented the world of wine by creating a novel product, early drinkable, easily approachable, not too tannic, not too oaky, slightly sweet and smooth, a wine for people who are new to wine as well as for people who just want to enjoy an uncomplicated glass every now and then. Thus, the wineeconomist asks in response to the book on blue ocean strategy published by Kim and Mauborgne, “so how is Yellow Tale a Blue Ocean product? Because, Yellow Tail isn’t wine as we know it — it’s a whole new thing.”
(WineEconomist, 2008, https://wineeconomist.com/2008/02/26/the-yellow-tail-tale/).
This wine allowed newcomers to wine drinking to engage in an uncomplicated way. There was no difficult wine code to decipher, there was nothing to know about the origin or the terroir of the wine, it was easy at the palate and did not take any prior experience in wine drinking. The low price level and the availability of the product seems of equal importance.
Thus, Yellow Tail wines are celebrated as the second wine revolution that Australia started in order to change the global landscape of wine production and consumption.
“Australia perfected industrial farming. No other country appears capable of producing an 8 dollar wine as well as Australia.” (Robert Parker Jr. cited in Mattinson, 2007, p: 17)
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Both, the myth of Penfolds Grange & Max Schubert and Casella’s Yellow Tail are based on revolutionary processes. Thus, both are contemplated as acts of renegades, going against the global status quo of the wine world, questioning the norms and rules. This understanding is based on both myths, which not only stand out as examples of game changing innovations but also account for a perspective that looks into the future, not only past achievements. As such, the scientific nature of both mythical wines, the Grange and Yellow Tail, is grounded in the educational environment of Australia and thus unites the entire Australian wine industry.
As mentioned in chapter 4, the Roseworthy College stands out at as a unique example of scientific education in winemaking, separating oenology from viticulture. Other Australian universities followed this example.
5.3.3. Taking pride in science
The vanguard position of Australian wine is expressed by the two famous examples of the
Grange and Yellow Tail. The basis for both of them is scientific winemaking, which allowed for both innovations. However, one aspect is the influence scientific education and research has on winemaking. Another aspect is the pride Australians show for their research and educational institutions. The following statement exemplifies the attitude also found in many interviews and informal chats.
“Places such as the National Wine Centre in Adelaide and the National Wine and Grape Centre are leading the world in research and education. Students can study viticulture (grape growing) and wine making at university and, once they have graduated, are in high demand throughout the world.” (http://www.rareaustralianwine.com/wineRegions/wineHistory.asp)
“The Australian wine industry is internationally renowned for its ‘best-practice’ and innovative approach to the entire wine value chain, from grape growing to wine making
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to consumer satisfaction.” (University of Adelaide, “study-abroad-Australian-wine- industry” brochure)
The Australian perspective upon science in winemaking is mirrored in the following statement:
“We're more technical in the amount of testing and knowledge about our wines than in Europe. We're doing 1.6 million tests a year in our lab which is double what we were doing five years ago. So we're getting more and more knowledge about our wines and with that knowledge you can make better informed decisions about what you do in the cellar”. (Interview Murphy, Yalumba)
The external view upon Australia confirms such statements. Bertold Salomon confirmed in several interviews that Australia leads the wine world in science and technology, not only in production but also in research and education. Also the following statement by Jancis
Robinson highlights the respect she has for the Australian Wine Research Institute:
“Peter Gago19 told me, these grapes [for older vintages] would have been picked early, as we do nowadays, because these vines are in balance. I wish the AWRI would work on this and show how to get flavour earlier with balanced vines.” (wine blog by J. Robinson, 18.10.208)
Science is understood as the major force that gives power at the hands of the winemakers. It puts winemakers in the position of creators, having full access and control over the process.
The application of technology and science in the process from fruit to the final bottle of wine allows for maximum control and reduces the natural risks given by weather conditions, diseases and terroir.
19 Peter Gago is chief winemaker at Penfolds. He was responsible for the vintage of 2008 which was awarded with 100 points by Robert Parker Jr. 22. May 2017 Daniel Semper 114/211
“Often Australian winemakers see themselves as artists. Just bring me the grapes and I will make it.” (Interview deKeizer, Mac Forbes)
5.3.4. Democratization of Wine Drinking
Penfolds Grange was designed as an elite endeavor. It was designed to produce the best wine possible, employing scientific methods, sketching the complete design of the wine from fruit to bottle on paper. The result was aimed to produce wines of similar quality as the best wines in the world. These bottles should last for decades. As a side effect of this approach, the wine was characterized by a high astringency and strong tannins. It was the complete opposite of the later Yellow Tail, hard to approach, not easy to drink and definitely not early drinkable. That was why the first verdict of the novel wine was negative, even by people from the business. In other words, the wine was exclusive and elite. This is still true today. The 100 points by Robert Parker Jr, awarded twice, and the high release and particularly the high auction prices mirror the elite status.
The second innovation, lead by Yellow Tail, mounted in a wave of democratization of wine drinking. First, Yellow Tail wines offered a cheap solution for wine drinkers. Secondly, Yellow
Tail did not exclude itself through entry barriers. The wines were accessible everywhere. The wines did not hide anything and encrypt the content on the wine labels. The language used to introduce the wine at the label is easily understandable and uncomplicated. And thirdly, the wines allowed for early and easy drinkability.
The success of this new style of wine also affected the Grange, which over the vintages got produced in a more accessible way. Nowadays, the Grange is after its release (on average five years after vintage) just as early and easy drinkable as the Yellow Tail.
During site visits I could observe a strong anti-snobbery attitude among winemakers and people in the industry. Usually, this demarcated the division between the elite Old World and
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the democratic New World. The following statement taken from a newspaper in 1953 reveals a strong anti-elite stance.
“The only remedy is education. Once people learn to drink inexpensive dry wine, especially with the evening meal, they are on the high road to temperance civilized discussion, and joy of life, he says. But let it be emphasized that one of the worst enemy of the enjoyment of wine is snobbery. If a wine-drinker cannot also appreciate the excellent beers and ales of Australia. No true wine lover is he.” (Queensland Times, 24.01.1953)
The statement below refers to the Australian attitude towards wine drinking as a fun event among friends, on the beach or at barbecues. It refers to the wine in a box, which is very popular in Australia, especially among young people. Such wine boxes hold a plastic bag inside the box, which is often used as a pillow afterwards as several Australian told me with pride.
“Just spin the Hills Hoist and if the goon bag lands above you, you’ve gotta skull it,” a bare-chested man wearing an Australian flag as a cape tells me. It’s January 26th, my inaugural Australia Day, and I’m about to play my very first game of Goon of Fortune, an unofficial initiation into Australian society. Its name may be a spinoff of the iconic Wheel of Fortune, but Goon of Fortune takes full advantage of two very Aussie inventions: the goon bag (also known as bag-in-box, cask or boxed wine) and the Hills Hoist (rotating clothes line). No Australia Day would be complete without it. Like Spin the Bottle, it involves pinning a wine box’s bladder to a clothesline and spinning it until it lands above a player’s head, who must in turn “skull,” or take a generous gulp, from the goon bag. The story of Australia’s favorite drinking game is inextricably linked to the tale of the goon bag, which celebrated its 50th anniversary last year. … It may not be posh, but as long as this oh-so-Aussie game sticks around, the goon bag will keep spinning. (wine blog by Christina Pickard, 26.01.2016)
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Such statements reveal a certain understanding of life and social order that seems based upon an egalitarian society, which seems to stress communalities rather than a distinction between working class and elite. This also resonates with ethnographic studies. Carol
Johnson for instance cites a statement made by the Australian prime minister Howard that dominant pattern comprises Judeo-Christian ethics, the progressive spirit of the
Enlightenment and the institutions and values of British political culture. Its democratic and egalitarian temper also bears the imprint of distinct Irish and non-conformist traditions
(Johnson, 2007, p: 5). Other ethnographic studies refer to the Australian way of life as a celebration of the digger out of the uniform, with an emphasis on physical skills, rather than intellectual attainments, and a casual connection to egalitarianism and mateship (Day, 1998, p: 86). Referring to Australian wine, wine drinking is not a statement of distinction. Instead it is ubiquitous and available to everyone. No expert knowledge and prior experience is required.
No maturation is needed, thus people do not need to invest in expensive wine cellars or wine refrigerators, which helps undermine class distinction. The wines are easily approachable, the prices achievable (except for the icon wines) and their quality reliable. Thus, Australian wines perfectly blend into Australian lifestyle. There is no need for a bottle opener at the beach, as the majority of Australian wines are screwcap sealed. These wines do not require wine cellar storage for maturation for years or decades until their become approachable. You can go buy a bottle, open it straight away and it will be fine. Wines are bought in bottle shops, which do not have a lot in common with European wine stores. The following photograph of a drive- through bottle shop provides an example of how Yellow Tail and the anti-snobbery attitude in
Australia change the landscape of wine drinking.
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Photograph 4: Bottle Shop McLaren Vale
To sum up the influence of the Grange and the Yellow Tail had on the Australian wine industry, the following statement reveals the two sides of the coin, integrating the elite and the democratic perspective:
“In just 200 years, Australia's wine industry has grown from a few small plantings to an industry renowned throughout the world for quality, innovation and depth. Australian wines have taken key international awards, competing favorably against longer- established international wine industries. Prized Australian bottlings grace the menus of many of the world's leading restaurants, while popular varietal and blended wines compete on the shelves of wine shops and supermarkets in over 100 countries around the world.” (http://www.rareaustralianwine.com/wineRegions/wineHistory.asp)
5.4. A Feeling of Superiority Towards the Old World
The economic success paired with ratings, medals and other acclaims, and the self- conception as innovation leader based on scientific winemaking seemed to have sparked a movement for new self-esteem. Often gold medals are displayed on the wine labels or exhibited in the tasting rooms. The example below celebrates the “best Semillon in the world”, produced by McGuigan.
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Photograph 5: Cellar Door at McGuigan, Gold Medals
Photograph 6: Cellar Door at Wolf Blass, Gold Medals and Books
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This new attitude partly grounds in a nationwide movement in taking pride in their successes.
Partly, it seems also fueled by external reactions to Australian wines, as the following statement shows:
“Spite and panic led French winegrowers to force a change to the name of Australia's most respected red wine, according to a leading British wine expert. Journalist and author Auburn Waugh said the overall quality of Australian wine was the reason for the French campaign, which has forced Penfolds to change the name of its Grange Hermitage to simply Penfolds Grange. Writing in this week's Spectator magazine, Mr. Waugh said, “The simple truth is that the Australian wines beat their French equivalents into a cocked hat on any comparison of the price-quality ratio.” (The Canberra Times, 06.03.1988)
The following newspaper excerpts provide a nuanced understanding of the internal struggle about the status of Australian wine.
“If Australian wine makers have, in general, overtaken French quality at the bottom and middle of the market, it is a different story at the cutting edge, I believe. "We're closing the gap, but there are some French wines so profoundly wonderful to sniff and sip, it's hard to see us overhauling them right now.” (The Canberra Times, 02.01.1995)
“Chateau Margaux 1978, one of those "First Growths”, sticks most in my memory. To inhale the perfume of a wine this good and experience the richness of flavour and supple structure defies words but fires up enthusiasm. Penfolds Cabernet Sauvignon Bin 707 1986 lit the same fire. The hope for our side is that Chateaux Margaux cannot get any better, but Bin 707 is improving: dramatically from the 1970s to the 1980s; steadily in the 1990s. The gap is closing.” (The Canberra Times 02.01.1995)
“If you ask him what country produces the finest general body of wines in the world. It is a hundred to one he will say France, although the true answer is Australia.” (Queensland Times 24.01.1953)
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After 2000 and the launch of Yellow Tail wines, the references about Australia providing the best quality for money offerings become even more relevant.
“Since more than 20 years, Australia is dominating the global wine market in the sense of quality for money for rich red wines. There were no other companies which could possibly reach such a volume of production at all price levels.” (Interview Salomon)
“In that amazing period of time of less than 20 years, Australian production and in particular exports grew at a rate that no other country has equaled. It went - we went from nowhere as I said a moment ago to being the fourth largest exporter in the world by value after France, Italy and Spain.” (Interview Halliday)
Thus, the Australian wine industry has gained self-esteem particularly based upon the success of their mid-level wines, such as Yellow Tail. The themes either build upon the economic success stories and market dominance or upon the democratization effect of these novel wines. The idea of introducing new people to wine drinking is still present these days.
The focus shifts from the overseas markets in North America and the UK towards China.
“They're reviewing their export strategies as an association now and thinking about sending delegations to run masterclasses in China next year with Wine Australia who are a most significant marketing force.” (Interview Jenkins, Wynns)
“Shanghai's a very cosmopolitan market where young people are drinking lots of wine. So it's a market for Australia potentially. But the US is the real main market and growing so that's certainly a big opportunity.” (Interview Murphy, Yalumba)
“You see some of these companies like Treasury launching their annual runs of some of their premium products in China, in Beijing. They're actually launching them to the market there, not here. So they're reflecting the importance of that market in buying at that end of the scale.” (Interview Johnson, AWRI)
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In addition, the focus on growth is an omnipresent phenomenon. The following interview excerpt shows the believe in continuous growth and prosperity.
“I still think the number of brands is increasing, the number of labels is increasing it never stops growing.” (Interview, Hooke)
Another theme revolves around the sustainability aspects of scientific winemaking. The argument is based upon the notion that science and technology allows for optimal water usage through controlled irrigation systems, the optimal drainage and the optimal control of the state of the soil. It also reduces the loss through bacteria spoilage. All in all, scientific winemaking is understood as the perfect means to not only make better wines but also better preserve nature through limited waste and disease control.
“Probably a core value would be that we're really determined to hand our vineyards on to future generations in better condition than they are today. We're not constrained by organic principles or biodynamic principles; we're doing things our own way but we do evaluate our soil health very regularly. We look to planting biodiversity and we run sheep in our vineyards and we have very healthy soils. We're also thinking in a broader context about things like how much diesel we use, how much fuel, how much electricity we need to use to run our vineyards and our pumps and how many times we travel through the vineyards to do things. Every time you travel through you're using energy, you're compacting soil, you're doing damage.” (Interview Jenkins, Wynns)
Another focus lies upon the health benefits of scientifically produced wine as a flawless produce, in stark contrast to European wines, which are often ridiculed and mocked for having secondary characteristics that are considered as flaws according to the Australian understanding of winemaking.
“You could argue that though even within a Bordeaux. If you look at Bordeaux and you - even in the last 50 years if you looked at every vintage from Grand Cru right the way down. The stylistic differences from one to the next can be extraordinary. One can be full
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of wine diseases. That's like a spoilage microorganism which creates bandaid style flavours. But one can be full of that and another can have none.” (Interview Johnson, AWRI)
Customers seem to have a preference for flawless wines, as these wines provide multiple health benefits. One aspect was that flawless wine should be good for the female skin.
“Chinese ladies particularly like Australian red wines, as they are clean-skin and well made, without faults, fruit only alcoholic drinks, which foregrounds the benefits of the vines being healthy and good for the female skin. (Observation notes, chat at McGuigan cellar door)
However, these findings are also contemplated in the marketing literature. “The most important motivation for drinking wine in China is that wine is good for your health. In China, wine consumers are saying they drink wine to help them go to sleep, or because it’s good for their skin, but things like it goes with food, or it makes me feel sophisticated, are less important than we think” (Ehrenberg-Bass Study, 2013).
The health benefits mentioned are particularly interesting, since originally Australian wine was seen as a threat to health. Even after the success of Penfolds Grange, many Europeans were reluctant to believe in the novel winemaking practices.
“Scientific methods of making wine are frowned upon in parts of Europe, since the quality and bouquet of their wines, made by older methods, have been renowned for centuries.” (Daily Mercury 08.09.1952)
The following statement by Jancis Robinson provides a good example of how the bad image of Australian wine still prevailed during the first years after the initial success of the Grange.
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“I came across similarly conservative reactions when I brought a bottle of Grange 1982 back from Australia to share with members of the French wine establishment on Bernard Pivot's popular Apostrophes tv show in 1988, only to see it dismissed as 'un vin de pharmacien' (a chemist's wine). It is true that in its youth, Grange can be a bit much - all tannin, tar and camphor. It takes many years to evolve into gorgeously sweet, luscious, exotic elixir.” (wine blog by Robinson, 2008)
This attitude changed however. Many international commentators stress the relevance of the
Australian winemaking revolution for the global winemaking standard. If you look into the category of iconic wines nowadays, Penfolds Grange ranks among the top wines, an equal member to the Old World wines, such as Chateaux Lafite, Petrus, or Romanee Conti (see for instance Beverland, 2005). Often during interviews and site visits, people from the industry revealed an attitude to reverse the historical rejection of Australian wine as inferior by stressing the better production techniques and research facilities available in Australia. Often the Old World was accused of low quality and hygiene standards and poor professional working attitudes.
“European companies now have got their shit together. That's only a relatively recent phenomenon. Historically there were - bacteria with spoilage and hygiene was just like they were the norm not the exception. If you were working on a wine in France and it's knock off time you just walk away, you leave everything and you have all the indigenous micro flaw and things like that.” (Interview Hall, McGuigan)
“Particularly in the south of France where the cooperative mentality just simply gave growers and makers in that vast region in the south of France absolutely no incentive to make better wine.” (Interview Halliday)
“In Europe I notice they were fairly old-fashioned or didn't actually think a hell lot about winemaking, particularly in Burgundy. In Bordeaux, they are certainly thinking about it. Burgundy was very backwards, still making a lot of odd wines, and a lot of people not 22. May 2017 Daniel Semper 124/211
knowing really what they were doing.” (Interview Osborn)
Fueled with the success of Australian wine globally and equipped with a new self-esteem many commentators also reversed historical claims about Australian wine by revealing an ambiguous message about lacking history of winemaking compared to Europe, whereat having the oldest vineyards in the world, which is because of the phylloxera pest that destroyed the old rootstocks in Europe in the 19. century.
“We talk about the Old and the New World, the New World has actually older vines than the Old World.” (Interview Duval)
5.4.1. Showcasing Science and Technology
The pride in science and the belief in progress through scientific methods and research that the vast majority of interviewees seemed to thrive upon was not only apparent during interviews but appeared also in several manifestations of artifacts at cellar doors and in tasting rooms. Some of these artifacts include sketches of chemical analysis, molecular structures, technical equipment, and laboratory equipment, such as pipettes and microscopes. You could find such examples displayed prominently in various tasting rooms.
Photograph 7 shows such an example.
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Photograph 7: Cellar Door at Wynns, Tasting Room Artifacts
5.4.2. Parallel Narratives of Tradition and Modernity
The narratives on science and technology are often paralleled by the exhibition of historical artifacts. The following hotographs show contrasting examples of architecture and exhibits portraying craftsmanship, tradition and history on the one side and science and industrial production on the other side. Photographs 8 and 9 were taken at the main production facility and cellar door of Penfolds in Nuriootpa, Barossa Valley. The front entrance evokes romantic pictures of winemaking associated with tradition and craftsmanship. The backside of the same facility reveals its industrial character. Interestingly, people who visit the cellar door have to pass by the facility. Thus, nothing is hidden. The same is true for all other production facilities and cellar doors I visited. Photographs 10 and 11 show the facility of Yalumba,
Barossa Valley.
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Photograph 8: Cellar Door at Penfolds Front Side
Photograph 9: Cellar Door at Penfolds Backside
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Photograph 10: Cellar Door at Yalumba, Front Side Artifacts
Photograph 11: Cellar Door at Yalumba, Backside
The ambiguity about tradition and craftsmanship on the one side and modernity and science on the other side is also prevalent in the label design of Penfolds Grange. The name “Grange
Hermitage” contained originally a reference to France, the origin of the grape variety used for this wine, Syrah. Syrah wines from the Rhone Valley are labelled according their terroir as
Cote-Rotie, Chateuneuf-du-Pape or Hermitage. Syrah in Australia instead is labelled as
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Shiraz. Thus, the amendment of Hermitage to the name provides a symbolic connection to the Old World. This is particularly interesting, since the taste of a Syrah and a Shiraz, despite the same grape material, could not be more different from each other. Syrah wines offer a bouquet of white pepper and an earthy palate with strong tannins. Shiraz on the contrary is known for its smoothness and silky character, not a hint of pepper and earthiness. However, after the conflict with France in 1988, Penfolds had to remove “Hermitage” from the label.
The first labels in the 1950s did not exhibit any narrative about the wine. In 1961 Penfolds started to put a reference the wine labels that displayed awards as well as a general relation to the finest table wines in the world. From the 1990s onwards the reference to Hermitage disappears and the label draws a narrative link to France instead. It reads: “During an extensive tour of the Bordeaux region of France in 1950, Max Schubert studied winemaking practices that have now become an integral part of Penfolds’ winemaking techniques… The development of Grange represented the beginning of a new era in Australia’s red winemaking tradition… acknowledged to be among the world’s classic wine styles.”
Figure 15: Penfolds Grange Labels over Time: 1954
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Figure 16: Penfolds Grange Labels over Time: 1961
Figure 17: Penfolds Grange Labels over Time: 1963
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Figure 18: Penfolds Grange Labels over Time: 1990
The advertisement strategy of Penfolds stress the craftsmanship of the winemakers and viticulturists involved and their devotion to soil and heritage. This resonates with the personification already applied with Max Schubert as the renegade, the revolutionist that created the Grange. Also on a more mundane level, Penfolds seems to follow the same logic of credibility and authenticity through personal statements. Figure 19 provides an illustration of traditional authenticity claims, as the viticulturist portrayed states that for him, it is all about terroir. In figure 20, the portrayed winemaker presents himself as an artist, which resonates well with the authenticity claims of producing a high culture product through means of craftsmanship.
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Figure 19: Advertisements by Penfolds: Adam Brown, Grower Liaison Manager
Source: personal archival
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Figure 20: Advertisements by Penfolds: Tim Riley, Winemaker
Source: personal archival
With both advertisements Penfolds draws the attention towards arts and the craft to produce arts, as well as the down to earth character and commitment of the Penfolds people. The following example of an advertisement stresses the connection to the audience, the effect that
Penfolds wines evoke feelings of nostalgia. In other words, feelings about romance, craftsmanship and the old times.
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Figure 21: Advertisements by Penfolds: Nostalgia
Source: personal archival
Interestingly, there is a pack of cigarettes and a can of Coke visible on the desk in front of the women portrayed as nostalgic. Cigarettes have a connotation with the Grange, since Max
Schubert had, so the rumors go, to learn to smoke cigarettes in order to produce a wine of such a strength to get through the cigarette taste. Coca Cola evokes another delicate association, as Penfolds is often referred to as the Coke producer of the wine world, along with many other Australian winemakers. This criticism refers to the scientific method and the vast scale of production. Also Hardy’s fall into the same category, being an industrial wine
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producer and promoting their offerings with advertisements evoking pictures of tradition and craftsmanship.
Figure 22: Advertisements by Hardy’s: Nostalgia
Source: personal archival
Thus, companies like Penfolds, Hardy”s and others pursue a twofold strategy of promoting their wines. On the one hand, their advertisements stress pictures of nostalgia and craftsmanship, contrary to what their cellar doors, tasting room, and production sites reveal.
Casella, conversely, took a completely different path. Yellow Tail advertisements do not even hint towards craftsmanship and nostalgia. Instead, everything seems to revolve around fun and an easy-going lifestyle.
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Figure 23: Advertisements by Casella: Beach and Fun
Source: personal archival
Figure 24: Advertisements by Casella: Tattoo and Fun
Source: personal archival
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Figure 25: Advertisements by Casella: Humor and Fun
Source: personal archival
Particularly the last picture shows a humorous attempt of coming to terms with history and tradition. Also, the reference to arts in figure 24 indicates a humorous way to play with advertisements from other wine producers, such as Penfolds. Showing a tattoo refers to arts on one side, but on the other side, tattoos brings arts down to earth. It is easy approachable and understandable. Tattoos, conversely to high culture art, such as paintings, have street credibility and convey a counter culture to some extent. This resonates well with the overall identity that Yellow Tail wines signal, the anti-wine among the wines.
Hickinbotham of Droomana provide another version of the Australian janus-faced character integrating two aspects of authenticity, tradition and innovation. The following figures show two badges referring to Ian and Alan Hickinbtham, father and son. Both were highly important figures in the recent Australian wine history. Since history in Australian wine seems nonexistent, a reference to the early days of modern Australian wine is marked with the label of modernity.
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Figure 26: Badge at Hickingbotham of Droomana, Cellar Door: Ian Hickinbotham
Figure 27: Badge at Hickingbotham of Droomana, Cellar Door: Alan Hickinbotham
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5.5. Summary The empirical material draws on historical as well as current interview and media data, economic statistics and reviews and ratings by wine critics. The findings reveal a strong attitude of Australians towards their history. This is evident in the lack of references, even when asked to address them. History in the wine industry is twofold. One aspect deals with the past as penal colony. Another aspect refers to the stigma of fortified wine country, marked as colonial wine. Both aspects are associated with social issues, the latter especially with health issues. The mark attached by European audiences, e.g. during the Great Exhibitions in the 19c, are understood as a humiliation.
The narratives of the birth of Australian wine or at least what is considered the birth of the new way of winemaking dates back to 1950 with the first experiential vintage of Penfolds
Grange. These narratives celebrate the novelty, the innovation. This holds true for two aspects of innovation which are interrelated, striking new paths in education and practice of winemaking, and the novel practices of scientific winemaking. The novelty in education was the formalization of education with a focus on chemistry and microbiology, and the separation between oenology and viticulture. Scientific winemaking puts the new approach into practice.
These two aspects appear as a co-evolution, since both are dependent on each other. Max
Schubert did not study at university. However, he was strongly influenced by his cellar master,
Ray Beckwith, who was a graduate from Roseworthy College. The innovative ideas of winemakers in Australia find their way into research laboratories, such as the AWRI and university laboratories, and likewise new techniques are developed in these laboratories taught at universities and spread among the winemaking community.
The revolution of winemaking through ph- and temperature control, among many other innovations, changed the global landscape of winemaking. In turn, the focus on science and the celebration of scientific winemaking spurred the myth of Australian wine as the renegade, the kid from the bad side of town. The vanguard positioning is justified on the basis of
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highbrow judgments by wine critics, both on a national and international level and the incredible price levels reached at auctions and on regular release prices. However, the myth reveals an important spin side of the coin, Yellow Tail and its democratization effects.
The democratization of wine drinking weighs heavy in the narratives about Australian wine, as it resonates with the becoming of the nation state. The definition of Australianness revolves around egalitarianism, mateship and anti-snobbery, all perfectly embodied in this novel wine.
In doing so, both innovations together thrive on modernity and professionalism instead of craftsmanship and tradition. According to this narrative, democracy rules over imperialism and science over hocus pocus, as many winemakers refer to traditional European winemaking methods. The scientification of practices require the professionalization in both, winemaking and education. This is mirrored in the division of labor, specialization and separation of cellar techniques, farming, management and marketing. This is understood as the instantiation of modernity. This momentum creates a reverse effect of the original stigma of colonial wine.
Australian wine is no longer a risk for health. Instead, Australia winemakers claim to produce superior wine in terms of health benefits and sustainable production.
Modern winemaking allows a certain self-esteem to evolve. Interestingly, in narratives about the new Australian (wine) self-esteem, mocking is usually part of it. Often, narratives ridicule
European winemaking methods as traditional and anti-modern, employing antique and irrational methods, which results in high uncertainty and fluctuation in quality and a comparably inferior quality price ratio. Such mocking examples provide insights into boundary work efforts of Australians towards the creation of a dichotomy of Old and New World, tradition versus modernity, hocus pocus versus science, monarchy versus democracy.
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6. Discussion
The theoretical vantage point proposed in this chapter addresses several limitations of category change dynamics along the status hierarchy. First, studies on change processes of entire categories are still scarce. As a result, the understanding of how and under what conditions categories change over time and acquire higher status positions seems underdeveloped. Second, category change processes are dealt with as black box phenomena in the literature. So far it offers little guidance in how the unfolding of change happens, whether the mechanisms have an effect of simultaneous forces (see for instance Delmestri and Greenwood, 2016) or whether they unfold stepwise. A third limitation this chapter speaks to is the implicit understanding of prototypes as central exemplars of categories. For one, this concerns the limitation in the literature that considers categories as represented by one sole category prototype, instead of the possibility of having more than one exemplar. In addition, the vagueness of the definitions of prototype and exemplar, creates a void that asks for further scrutiny. A fourth limitation in the literature addressed lies in the focus of category dynamics of niche markets (see for instance Rao, Monin and Durand, 2003; Weber, Heinze and DeSoucey, 2008; Jensen, 2010; Negro, Hannan and Rao, 2010; 2011; Jones, Maoret,
Massa and Svejenova, 2012; Croidieu, Rueling and Boutinot, 2013; Delmestri and
Greenwood, 2016). Concerning the growing relevance of questions of authenticity of categories (see for instance Weber, Heinze and DeSoucey, 2008; Negro, Hannan and Rao,
2010; 2011; Delmestri and Greenwood, 2016), a fifth limitation will be addressed by introducing a novel form of authenticity. Further, I will discuss the effects of ambiguous authenticity claims.
Finally, the novel form of theorization – of non-conformity and gradual confrontation – discovered in this study, speaks to the literature on institutional change, particularly on category change (Zuckerman, 1999; Delmestri and Greenwood, 2016). The novelty of the mechanisms concerns cases of non-effective or counter-effective attempts of high status
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emulation. Thus, in order to rich legitimacy, categories have to re-invent themselves, based on category-novel, but legitimate, practices. This proposition suggests an alternative view of the sequence of strategic positioning according to the categorical imperative (Zuckermann,
1999), which introduced a sequence of differentiation of category members from first imitation towards later distinction from the prototype.
This chapter is structured into two parts. The first part introduces the grounded model of successful theorization of category status change. The model tackles change processes of an entire category from stigmatized towards high status. The model provides a processual view on the unfolding from first deviance towards a complete change. In order to better understand the processual stages, I will introduce the differentiation between category gravity, i.e. the population density, and category attention, the saliency of the category exemplar. The two distinct innovations, Penfolds Grange and Yellow Tail, were necessary conditions to successfully theorize Australian wine as a legitimate and fully stretched category. The first innovation concerns the status dynamics within a stigmatized category and the consequent breaking of the category glass ceiling in order to reach high status. This break out scenario involved a legitimation by highbrow judgment by critics. The second innovation deals with a
(sub-) category emergence scenario that introduced a novel middlebrow category. The discussion of the novel (sub-) category will emphasize the relevance of a middle status mass market. The legitimization process is, thus, distinct from niche markets. The broad acceptance of the novel (sub-) category led to an amplification of the status dynamics of the first category innovation. The first innovation and the subsequent category break out paved the way for a vertical extension of the category. The second innovation represents a horizontal extension.
Both category dynamics, the break-out and the emergence, together provide the necessary foundation for a successful high status category theorization through non-conformity and gradual confrontation.
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Part two of the discussion chapter addresses the contributions to the literature on authenticity.
In this sub-chapter category features of modernity and scientization will be introduced in the literature on authenticity. In addition, effects of ambiguous authenticity claims will be addressed.
6.1. Theorizing Change: A Grounded Model of Gradual Confrontation
Through Non-Conformity
Based on the examination of the empirical case of Australian wine, from stigmatized colonial wine to high status wine, I could develop a process model of category change through high status category theorization of non-conformity and gradual confrontation. The model proposes a sequence of mechanisms that allow for the category status leap. The two innovations led to, first, the breaking of the category glass ceiling, endorsed by highbrow audiences’ judgments, and, second, to the horizontal expansion of the category, endorsed by middlebrow audiences’ judgments. However, the first innovation was only possible after a successful initiation of a de-stigmatization process. Thus, the first mechanism, history detachment, starts the change sequence. The second mechanism, high status category neglect, directly manifests itself in the first innovation. The third mechanism of mythification amplifies the success. This stage of the process has three intertwined aspects. At the early stage, the focus was on the success of the prototype, Penfolds Grange and its creator, Max Schubert. In a second stage, the novel practice of scientific winemaking becomes pivotal. In a third stage, the democratization effects of the second innovation, the Yellow Tail wines, completes the myth on all levels, from mid status to iconic status. During stage 3, and the simultaneous effect of three parallel mechanisms, the stigma erosion work changes from shielding through silencing the dark history towards re-focussing on the own strength. The fourth mechanism, stigma reversing, speaks to this dynamic, as it not only detaches the stigma completely, but moreover, turns the
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stigma and its accusation of producing bad, faulty, and un-healthy products towards the original stigmatizers.
Figure 28: Grounded Model of Successful High Status Category Theorization
The analysis identifies the conditions under which a status change of a stigmatized category can happen. Two aspects are central to this study that sets it apart from prior studies on category status change. First, the category of Australian wine is substitutable for any other
New World wine category and, second, it concerns a mass market, not a niche market. The only other study on category status change published so far by Delmestri and Greenwood
(2016) addresses a seemingly analogue case, which differs in the following aspects. For one, the grappa case concerns a status leap of a typical Italian spirit, different to other spirits, thus not one by one substitutable, and second, it concerns a niche market. In addition, Grappa
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could derive new meaning based on category detachment, emulation and sublimation, without a change in production methods.
Institutional change always involves cultural aspects, as institutions and culture are inseparably interwoven. Thus, the dynamics of the Australian wine category is interrelated with the becoming of the Australian nation state. However, the abstraction of the process and its events helps understand category dynamics beyond this particular historical setting.
The category status leap can be read as a slow form of emancipation, from stigmatized to fully legitimate and high status. Thus, I speak of a gradual change process through non- conformism. Delmestri and Greenwood (2016) found in their study mechanisms that speak for a theorization of change through non confrontation, avoiding resistance and contestation. The
Australian case shows a subtle development from confrontation and contestation in the 19. century to surrender to their stigma label as cheap colonial wine country in the following decades until 1950 and the re-invention of winemaking, which in the beginning started as a non-confrontational effort but became more and more confrontational in nature as the success evolved into a myth, exploited by the Australian wine industry and its associations.
Ultimately, the international media, which in the first place allowed for the status leap to happen, made the initial non-confrontation impossible. The process draws a line of events from non-confrontation to confrontation with the established central wine countries.
The theorization had to gain legitimacy within the community first. This part was achieved by drawing on social and cultural values, similarly to Weber, Heinze and DeSoucey’s (2008) study on the grass-fed beef movement in the US, societal values, or institutional logics, play a central role in justifying specific strategic decisions and their further legitimization. The case of
Australian wine shows the importance of the alignment of social and cultural norms with the novel practices, which was achieved without the formation of a social movement. Rather, the change resembles an unfolding of several incremental sub-processes, based on partaking and distributed agency (see for instance Leblebici, Kopay and Salancik, King, 1991; Dorado,
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2005). In contrast to the study by Delmestri and Greenwood (2016), meaning could not be reached through the adaptation of precast available scripts leaning towards category alien high class practices. The re-invention had to come from within the category and its social surrounding.
An important social aspect deals with the emancipation from Europe and the colonial past.
Early emulation of European winemaking practices in 18. and 19. century did not prove successful. The illegitimacy of the early efforts led to an open stigmatization that attacked the intrinsic values of the category, labelling Australian wine as colonial wine, wine of second class. Silencing the colonial history and its ramifications on the wine industry seems a first logical step. As a second step, the new Australian wine category had to gain legitimacy on an international scope. This was possible through a coopting with other global iconic wines. For one, the Grange provided an indirect reference to the most famous wine region in the world, the Bordelais, without stating that it aims at emulating Bordeaux wines. Instead, the best wines in the world were taken as an inspiration to produce a new wine of equal quality. The affiliation of Penfolds Grange with high status organization in the category of iconic wines laid the ground for global legitimacy, despite the difference in characteristics and practices. The
Grange was the first iconic wine, and probably still the only one, that is a non-Terroir wine.
Interestingly, this feature is overruled by other characteristics, such as critical acclaims by
Robert Parker Jr., Jancis Robinson, Langton’s classification etc. Thus, the categorical imperative could be sidestepped. Another important aspect was that the Grange was the first
New World wine to be associated with the iconic wine category. The Californian revolution, which mounted in the infamous Paris (blind) tasting in 1976, in which selected Californian wines rated better than Bordeaux wines20, probably had an amplifying effect on the status leap of New World Wines. However, the Grange was the first and only Australian wine for a long time, that stands in the first line of iconic wines. This is not to say that other Australian
20 The judgment of Paris was a blind tasting of Bordeaux and Californian wines organized by British merchant Steven Spurrier in 1976. Stag’s Leap Cabernet Sauvignon from the Napa Valley won the red wine category. Chateaux Montelena Chardonnay won the white wine category. This event was later put into motion film by Hollywood by the title of Bottle Shock. 22. May 2017 Daniel Semper 146/211
wines took after this example and represent highly acclaimed Australian wines, which rate among the best wines in the world. Nevertheless, in the first row of iconic wines there is only one place reserved for an Australian exemplar, Penfolds Grange.
The mass consumption end of the spectrum revolves around Yellow Tail and other North
American and Australian wines. Central to this category is the wine, through which the category itself was created, i.e. Yellow Tail. The category below, at the low end of the status hierarchy, revolves around the “Two Buck Chuck”21 wines from the US.
The following sub-chapters are organized according to the 4 phases, introducing the four mechanisms that allowed for a successful theorization on all levels of the category change process. The sequence of the unfolding of the mechanisms according to the 4 phases is necessary as one paves the way for the next, while the mechanisms need to continue to have an effect in the following phases in order to deepen, foster or amplify the overall development.
History detachment initiates a process of de-stigmatization. This process is characterized by continuous attempts to re-stigmatize the category offerings. Thus, it is a long term effort to fully de-stigmatize the category. The echo of the stigma is still present after the silencing of colonial wine in the media. High status neglect allows for the re-invention of winemaking on the basis of scientific principles. The early success of the prototype of the new winemaking practice furthered the de-stigmatization effect as it gained legitimacy, which in turn had positive effects on the entire category. The high status category neglect manifested itself into the myth of Australian wine as the renegade, the kid from the bad side of town. This effect is still relevant in phase 4, enabling the second innovation to happen, the emergence of a middlebrow wine category. The success of both innovations together further the erosion of the stigma, which in turn led to a reverse effect. The mechanism of stigma reversing would not be successful at an earlier point in time. For one, the stigma has to be fully detached. And,
21 Charles Shaw wines are often referred to as Two Buck Chuck wines, listed as extreme value wines. These wines originally sold for USD 2 per bottle, which lead to the name of Two Buck Chuck. 22. May 2017 Daniel Semper 147/211
secondly, the category needs to be theorized on all levels of the status hierarchy in order to provide an encompassing meaning for the entire category, not just the elite fine wine genre.
6.2. Phase 1: From Stigmatization towards History Detachment
Starting with the initial stigmatization of wines from Australia as colonial wines that happened during the Great Exhibitions in Vienna and Paris in the 19th century, the following decades were characterized as a phase of stigma acceptance and a quest for an Australian wine identity. The media reflect an ongoing struggle of what Australia wine is in relation to
European wine and what it means to the social and cultural environment. The narratives go back and forth, celebrating wines and success stories in blind tastings and reflected in export statistic on the one hand and stories about health and crime related issues connected to the consumption of colonial wine on the other hand. The majority of Australian wine producers, however, seemed to have followed a market demand, focussing on taste expectations in the
UK, and shift production towards fortified wines. In doing so, the stigma attached to Australian wine became a self-fulfilling prophecy. Australia turned into the producer of cheap low quality wine that it was not before.
The literature would suggest various approaches to get rid of the stigma or in some cases to employ the stigma as a means to reach higher saliency (Tracey and Phillips, 2016). The
Australian winemakers did not emulate legitimate practices (Delmestri and Greenwood, 2016) or integrate features of legitimate categories (Jensen, 2010). However, Australian winemakers did not engage in active stigma work that involved them with their audience and drew strategically on societal logics and values to redefine the social meaning of the category
(Hampel and Tracey, forthcoming). Also, they did not straddle categories and dilute the attention from the stigma. Instead, they first accepted the stigma, which did not prove positive to the category and its member organizations.
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Once the Grange was launched in the market, the situation took turns. During the mid 20th century, the features that were stigmatized, being a producer of cheap fortified wine, were silenced. The media coverage decreased to almost zero. Also within the community the past was silenced.
The general agreement seems to be that it was Captain Mc Arthur Phillips who brought the cuttings from Europe and James Busby who introduced a basic level of professionalism in winemaking in Australia. After this, nothing seemed to have happened. Silence was the strategy employed against stigma. Then, modern history was told to start with Penfolds
Grange. Silencing could be defined as a form of stigma concealing.
The findings also suggest an alternative view on the de-stigmatization of categories. Usually, the literature portrays de-stigmatization processes as linear. This study rather suggests a pendulum process. Stigmatization and de-stigmatization seems to move back and forth. The early success of Penfolds Grange was attacked by French wine association, calling the
Grange a chemist’s wine. British comedians, Monty Python, made fun of Australian wines in their sketch called Chateaux Chunder from Down Under. Stigmatization is a particularly sticky category environment. Attempts to get rid of the stigma evoke various forms on-going pushbacks, as discovered in my study. Therefore, de-stigmatization of categories is less linear than usually assumed.
6.2.1. Preparing the Ground for Change
The question of history plays a pivotal role for the Australian national identity. This holds also true for the Australian wine industry. The perceived lack of history appears as a legitimacy void. On the contrary, winemakers turn towards the future in their narratives. The past does not provide a sufficient basis that would allow for the employment of traditional methods compared to Europe. Instead, the future orientation has two effects. On one side, the past of
Australian winemaking is not a pleasant story to be told. The early successes in blind tastings
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at the Great Exhibitions in Europe in the 19. century and the subsequent stigmatization as colonial wine that was not perceived as legitimate to produce wine of European quality, led to a dark age for Australian wine. In the following decades the stigma of low quality fortified wine producing country seemed to produce a self-fulfilling prophecy. On the other side, the reinvention of winemaking exemplified by Penfolds Grange changed the perception of
Australian wine globally. After the 1960s, Australian wine became more and more accepted.
Thus, the focus on the future seems logical as it suppresses the bad associations people have with the fortified age of Australian (colonial) wine. It also directs the attention towards the dawn of a new era in winemaking that was led and largely influenced by Australian oenologists. Thus, the Grange marks a sharp cut in the Australian wine history, as what was before seems to fade away whereat what came after stands in the limelight of attention.
The point of history and the flexibility with which history can be rewritten and adapted towards the specific requirements and ideology of the time, is a pervasive theme in the social science literature (see for instance Ranger and Hobsbawm, 1983; Anderson, 2006). Concerning wine,
Hills, Voronov and Hinings (2013) studied historical narratives and the adherence towards a logic of fine wine making in the Ontario wine industry, while obscuring the past that was stigmatized as an alcohol making industry. In the case of Ontario, a wine narrative emulating
European, traditional and terroir specific practices proved successful to avoid stigmatization and gain legitimacy. Thus, history gets rewritten all the time.
However, it appears as one thing to rewrite history for specific purposes. Silencing history is yet another aspect. In analogy to Delmestri and Greenwood’s study (2016) on Grappa, which detached from its own category in order to emulate related fine wine practices in a second step, history detachment has similar effects. These are, the distancing from a past that embeds the organizations in an unfortunate lock-in situation of illegitimate and even stigmatized associations. History detachment only works to the extent that people do not ask what was before the rise of Australian wine. Category detachment, on the other side, only
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works in relation to the organizations left in the category. Such dichotomization often helps in creating a boundary and developing clear identity codes. In the Langhe wine region Negro,
Hannan and Rao (2011) observed a revolution among the Nebbiolo producers, as some deviated from the category norm and started to use French methods, such as the use of
Barrique casks instead of the traditional Botti. The novel movement thrived upon the concept of creativity as an expression of modernity and progress, whereas the traditionalists were marked as outdated and canonical. In this case the dichotomization allowed for a clear distinction between new and old, fuelling the debate of the novel form. In the Australian case, the dichotomy was not within the category or its past. Instead, the Australian wine industry created itself as an antithesis to the European tradition. This connection seems logical, as the original stigmatization was put forth by European critics and diffused in the European press.
Also historically, the becoming of the Australian nation state had aspects of resentment against the former European colonizers. Particularly the aspect of the penal colony fuelled a stark momentum against Britain. Prisoners who were deported to Australia nurtured the hostility against Britain, as they often claimed to be convicted on a false accusation
(Bouchard, 2008, p: 200). Narratives of victimization make sense for both examples. Victims of injustice and intolerance.
Thus, a strong attachment to the new continent and the freedom it provided was a consequence, which explains the enthusiasm of exploring and the willingness to innovate.
Interestingly, the new found Australian national identity developed first among the working class strata (Bouchard, 2008, p: 201). This resonates with the importance Australian people ascribe to the democratization process of wine drinking, led by Yellow Tail wines. Also, intellectuals were reluctant to be associated with Australia’s penal past. (Bouchard, 2008, p:
224).
Another important factor that allowed for a successful theorization was the relative harmonious and discreet emancipation, avoiding direct confrontation. During the early years
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of modern Australian wine, this process is paralleled by the becoming of a nation state of
Australia.
Thus, memory does not occupy a central role in Australian reflection on the country’s condition and progress (Bouchard, 2008, p: 242). This seems particularly true for its shameful aspects.
Figure 29 exemplifies the silencing effect. It provides a development of media coverage in the
UK and in Australia by listing articles (and advertisements in the UK press) referring to
Australian wine as colonial wine. Around the Great Exhibitions in Vienna and Paris, the count of articles and advertisements in the UK press debating the stigmatization of Australian wine reveals a sharp amplitude. With a short delay the Australian press mirrored this phenomenon.
This development peaked towards the end of the 19th century. From then onwards the number of articles fade out cyclically. At the middle of the 20th century, right before Penfolds
Grange was created, the phenomenon has faded out. Towards the end of the 20th century, there were only occasional articles published referring to colonial wine as a phenomenon of the past.
Figure 29: Articles referring to “Colonial Wine” in the Australian and UK press, 1800 - 2008
Data Sources: National Library of Australia and British Newspaper Archive 22. May 2017 Daniel Semper 152/211
6.3. Phase 2: High Status Neglect - Breaking the Category Glass
Ceiling
In a second step, the category could reach new meaning through re-inventing itself. This was possible, because it happened in the shades. The limelight of attention based on the stigma faded out through silencing efforts and, thus, the category could reach low status. This allowed the category members to experience and break category codes, without punishment.
The category member that initiated the second phase with the innovation of scientific winemaking was Penfolds. More precisely, it was Max Schubert, who created the Grange and by doing this re-invented winemaking as such.
An organizational status leap seems difficult in this case. This is, on one side, because of the illegitimacy of the novel practices, since Max Schubert did not emulate European high status practices. On the other side, this seems the case, because high status is granted by audiences on the basis of affiliation with other high status organizations (Benjamin and
Podolny, 1999). Thus, category membership is crucial. Category membership and, thus, the relative status position along the vertical order of the category is defined through the category boundary (Vergne and Wry, 2014). These boundaries are in the focus for actors who wish to change their status position (see for instance Zietsma and Lawrence, 2010). The difference lies within the distinction between those actors who hold high status and those who lack high status. On the one side, status is seen as a major driving force that increases the likelihood of success of novel movements within categories (see for instance Rao, Monin and Durand,
2003). On the other side, the desire to reach high status is a major motivator to reach out for a status leap (see for instance Brint and Karabel, 1989; Delmestri and Greenwood, 2016).
However, both scenarios will affect the overall category.
Concerning the scenario, in which an organization wishes for high status ascription, the literature would assume that an organization seeks for high status affiliations and builds upon a high quality performance record (Podolny, 1993; 2001; 2005; Podolny and Phillips, 1996;
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Washington and Zajac, 2005). High status affiliations seems difficult, as far as the low status organization takes membership in a low status category, or prior stigmatized category. The stigma associated with the overall category overrules the individual organization and its performance. Thus, a high quality level in past performances falls short in attributing higher status ascriptions, as, first, quality only functions as a proxy to judge the organization and what it stands for (Sharkey, 2014) and, second, high quality judgment is overruled by core identity stigmatization. The latter argument is exemplified by the past performances of
Australian wines at the Great Exhibitions in Vienna and Paris and the consequent withdrawal and stigmatization. Thus, the perception of quality can be attributed to the social poisedness of the actors involved (Johnson and Powell, 2015), and not only to characteristics and features of the offering.
The literature is relatively well developed concerning high status organizations and organizational actors that put forth change agendas (see for instance, Rao, Monin and
Durand, 2003; Greenwood and Suddaby, 2006). The opposite case of low status organizations that aim to reach out for higher status acclaims seems rare. High status organizations usually have mechanisms in place to safeguard their status positions, as affiliation with low status organizations would typically be costly through status erosion effects
(Benjamin and Podolny, 1999). The stigma literature touches upon this topic. Hampel and
Tracey (forthcoming) describe the case of Cook’s travel agency in the UK reaching legitimacy after being initially stigmatized. Although Cook would probably not fall into the high status classification within the travel industry, it nevertheless accounts for a status shift from stigmatized, as an extreme case of low status, to legitimate, which corresponds to at least low status. In their study, legitimate status could be reached through a set of stigma work practices, which on the one hand stressed the relevance and positive effects of societal values associated with organized travels, and on the other hand, through the strategic
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management of alliances and boundaries. This resonates to some degree with the case of
Penfolds Grange.
Croidieu, Rueling and Boutinot’s study (2013) on Penfolds Grange as the exemplar for the creation of a fine wine genre in Australia falls into the same vein. Their findings suggest a set of four mechanisms. I build upon these mechanisms and reach out for additional and alternative mechanisms, which take into account the historical and global context of the
Australian wine industry. I also pursue a vantage point that integrates the high and low ends of the market, the mass commodity and the creative genre to speak in Croidieu, Rueling and
Boutinot’s words.
Another example of an organization that reached high status, first for itself and second for the category it takes membership in, concerns the case of Nonino Grappa as described by
Delmestri and Greenwood (2016). Nonino detached itself from the context of low status
Grappa at the time in order to redefine its category membership. The social meaning alteration was achieved through high status emulation and the contextualization within broader societal frames (Delmestri and Greenwood, 2016).
This study corresponds with the literature on organizational status effects through affiliations that determine status (Podolny, 1993; 2001; 2005; Podolny and Phillips, 1996; Washington and Zajac, 2005). As a consequence, detachment from the category, especially if low status or stigmatized, seems the best way to allow for a status leap.
Penfolds Grange was created in the context of a stigmatized category of colonial wine. It was, first, rejected, since it did not correspond with the overall category imperative. Secondly, after the success of the second and positive verdict by the management of Penfolds and the consequent acclaims at Australian wine shows, the Grange was still far from reaching high status. Only after the external acclaims by Robert Parker Jr., Jancis Robinson and other international wine critics and media the Grange could reach high status, which then reflected in higher prices and social honors. Examples of social honors are for instance that Jancis
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Robinson brought a bottle of Grange to the meeting of the French Wine Establishment in
1988 and Oprah Winfrey served a bottle of Grange on her final episode of The Oprah Winfrey
Show, with a guest appearance by Australian actor Hugh Jackman
(www.liffordwineagency.com, 2011, cited in Croideu, Rueling and Boutinot, 2013).
Originally, high quality Australian wines were stigmatized as being colonial wines. These wine emulated the European winemaking practices and were named after European types of wines, Mosell, Claret, Burgundy, Hermitage. However, emulation was not perceived as legitimate. Penfolds Grange was novel, a revolution instead of a copy, based on novel practices, which itself were not legitimate at the time.
In order to reach high status, Penfolds Grange had to detach itself from its Australian context of colonial wine. The original narratives by Penfolds revolved around the notion of being different and novel but nevertheless inspired by Europe. Penfolds stressed the equality of product quality with the fine wines of the world. However, it took until the 1976 vintage to reach 100 points by Robert Parker Jr. as the first New World wine, which allowed the Grange to take membership in the elite group of 100 Parker-points wines. This step allowed for a detachment and thus separation from the stigmatized national category of colonial wine which made the membership in the global category of iconic wines possible. This category of iconic wines comprises elite wines from France, Spain, Italy etc. Hence, the national origin became secondary. Until now, Penfolds Grange is understood as the exemplar of Australian wine on the one side but a wine in its own world on the other side.
According to Croidieu, Rueling and Boutinot (2013) several mechanisms were required to create a fine wine genre in Australia. These are: the shifting and layering of metrics, the search for analogies with established industries and practices, the resonance with societal logics, and personification of the product. All these mechanisms were fundamental for the
Grange to become the fine wine exemplar. In the 1960s, Australian wine shows, Adelaide at the forefront, integrated new and systematic evaluation criteria for wine judges which involved 22. May 2017 Daniel Semper 156/211
metric rating systems and systematic training. No longer the verdicts depended on personal taste to such an extent. Since the metrical system allowed for easier comparability, the wine shows grew in importance (Hooke, 1994). Medals and honors were important to signal status
(Croidieu, Rueling and Boutinot, 2013). As a consequence, the profession of wine critics emerged, first in Australia and soon later in Europe and North America22. Media started to publish wine columns, James Halliday and Huon Hooke began to write books and reviews on
Australian wine, Langton’s started its classification of Australian wine. Thus, the professionalization of the wine industry (similar to Peterson, 2013) was necessary to create an environment that allows for transparency and objectivity on professional jurisdiction. The
Australian case reveals that professionalization built upon the co-evolution of three pillars.
This notion goes beyond the findings of Croidieu, Rueling and Boutinot’s study (2013). The three pillars are: scientific winemaking, a formal university training in scientific winemaking, which establishes boundaries of expertise between viticulture and oenology, and the profession of wine critics, who are typically graduates from the same educational system as the winemakers, and journalists, who get systematic training in blind-tasting. As a consequence, the initial strategy of non-confrontation became more and more impossible.
Critics’ reviews and ratings made direct comparisons available and transparent. Thus, confrontation became unavoidable.
The break out scenario of Penfolds Grange seems striking, as it happened out of an initially stigmatized category. The break out appears as a two-step process. First, after the official launch and the following medals and merits at wine shows in Australia, the Grange rocketed in status. The Grange hit the category ceiling of the national category of Australian wine. Only after international merits and honors, the Grange could break the category glass ceiling. This distancing from the national category was possible through membership in another category, the global category of iconic wines. The breaking of the category glass ceiling allowed for a
22 Robert Parker Jr.’s Wine Advocate launched in 1978; Jancis Robinson began to write wine reviews in 1975; Wine Spectator Magazine was launched in 1976; Wine Enthusiast Magazine was launched in 1988 22. May 2017 Daniel Semper 157/211
dis-location of the center of attention. The focus was on Penfolds Grange, the first New World wine that reached iconic status. The Grange rang in a new era (Croidieu, Rueling and
Boutinot, 2013). The dislocation of attention towards the exemplar from the center of the category to an outside position built momentum for the entire category. This break out scenario resonates with the notion of the renegade that people associate with Max Schubert and the Grange. The emerging Australian national identity and the emerging wine identity both seem to build upon the myth of the renegade.
6.4. Phase 3: Re-focussing - the Mythification of the Category
In a third step, once the novel practices came into the light, as the novel wine, Penfolds
Grange, gained more and more attention, the practices had to become legitimate. It took the authority of science as a fundamental societal value and the belief in progress and social betterment by employing scientific practices to reach legitimacy. Ultimately, the logic of scientization was strong enough to, first, grant legitimacy and provide authority (Drori, Meyer,
Ramirez and Schofer, 2003; Drori, Meyer and Hwang, 2009), which then led to a stigma reversal. This last step marks an ultimate de-stigmatization process.
However, the foundation of the phase 3 lies in the re-orientation towards the own strength of the category members and of the novel profession of scientific winemaking. Until then, the focus was upon shielding the present from the past, and new practices from the established practices. But distance comes with a price. On the one hand, it will be difficult for audiences to evaluate the offerings and, on the other hand, the peripheral players lack attention in the market. Thus, the new category needs a prominent prototype that attracts attention and represents the entire category. Such prototypes typically evolve from a unifying belief system, mounting in a myth. An example for this would be for instance the iPhone as a prototype of the smartphone category, revolving around the myth of Apple and Steve Jobs.
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Myths are strong enough to glue together societies and cultures (Barthes, 1972; Meyer and
Rowan, 1977; Ranger and Hobsbawm, 1983; Anderson, 2006). Myths are rational abstractions of values and beliefs that function as projection area for people to relate to something external to their lifeworld. National myths hold societies together by creating shared rituals and belief systems that result in coherence and boundary work to distinguish between those who are inside and those who are outside (see for instance Anderson, 2006).
Myths work on societal as well as on organizational levels (see for instance Meyer and
Rowan, 1977; Zilber, 2006).
Croidieu, Rueling and Boutinot (2013) speak of personification of Max Schubert as the creator of the Grange. Personification is an important aspect of the creation of myths, but it seems to fall short in explaining its unifying power. That is, because the myth of Penfolds Grange reaches beyond the personification of the product. In the first place, many commentators stress the point that the real Max Schubert was not a renegade that he was made into by the marketing department of Penfolds. Thus, the myth of the Grange is to some extent based in real figures and real events, but the question remains to what extent features and beliefs were added to create a homogenous and compelling format that appears tempting for audiences to believe in. Since the Grange is Australian through and through, as commentators stress, it had to be a bit of a renegade in order to resonate with the becoming of the Australian nation state. In both cases, we could speak of a soft rebellion.
Memory is selective in nature. Strategic memorizing even more so. Thus, the contributions of other winemakers, such as Ray Beckwith, was largely silenced. The role of the overall scientification of Australian winemaking was played down. The prominent figure of the young man of German decent who wanted to prove to be Australian, works perfectly to create the myth of the founding father of modern Australian winemaking. Of course, the myth is not merely about the person of Max Schubert. This is another important distinction to the work of
Croidieu, Rueling and Boutinot (2013). Personification is one aspect of the myth. The other
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parts are its scientific foundation and the wine itself, its medals, honors and merits. Being the first New World Wine reaching highest international acclaims falls into the same vein with Max
Schubert being the first to employ scientific winemaking principles. Thus, the myth of the
Grange is an inseparable nexus of the personification of Schubert as the heroic renegade, the wine that won over the hearts (and palates) of the wine world, won highest prices, was named best wine of the world and sold at incredible prices. However, the backbone of both is science and technology.
Science and the belief in progress through scientific methods is omnipresent in the Australian society, particularly among the wine community. Even winemakers who followed biodynamic principles did not defy to the authority of scientific principles. Science is the theme that runs through in all narratives, even displayed at cellar doors. Thus, science became a myth itself.
Drori and Meyer, with their colleagues Ramirez and Schofer (2003) and Hwang (2009) speak of scientization in this respect. Scientization is understood as the myth that carries the principles of rationalization. What makes these principles so powerful are universal scripts that mount in a scientific authority, which is anchored in the superiority of scientific knowledge. This authority helped the Australian wine to gain legitimacy, since the scientific winemaking practices were not accepted at the time. The refusal within the winemaking community is juxtaposed to the broad acceptance within modern societies. Scientization was the answer to enchantment, reflecting the belief that technological changes are beneficial
(Zilber, 2006, p: 293). Enchantment was seen as medieval and outdated. In the case of
Zilber’s study (2006) on the Israeli high tech industry, generic national myths connect with industry specific myths. This finding is constituent with the Australian case. The generic myth of modernity and rationalization, science and technology translated over time into the specific context of the Australian wine industry. So it connected to the individual level and provided a solid belief system and reference frame for the category norms and practices.
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The individual level myth of the renegade seems imprinted into the DNA of Australian winemakers nowadays. It connects to the organizational level of highly rationalized and technocratic organizational forms and ownership structure, in which economic principles of efficiency are imperative. The societal level of the myth resonates with the becoming of the nation state, with democratic principles, modern bureaucracy and rationalization.
As Kieser (1997) mentioned, management fashions that are tied to the success of companies, tie the culture to the success of the organization, create concepts of mythical quality. Myths, create a meaningful interpretation of phenomena (Boje, Fedor and Rowland, 1982).
Scientific winemaking was already taken for granted when Yellow Tail wines were created.
This innovation marks the transition to phase 4, in which the mechanism of the mythification of the category was anchored in a broader basis, the democratization of wine drinking. What the success of the Yellow Tail wines contributed to the Australian myth was missing at the time. Both myths until then evolved from elite principles. Iconic wines are subject to highbrow judgment. Science is also subject to elite thinking, as it concerns a highly sheltered profession that holds highest esteem. Conversely, Yellow Tail wines opened the category of Australian quality wine to the masses. It was easy drinking, easily approachable, easily understandable.
People did not have to be wine experts any longer in order to enjoy a glass of uncomplicated wine. Audiences could trust these offerings as faultless and reliable. Wine drinking became fun. The principle of democratization of wine drinking in Australia (and overseas) through the creation of Yellow Tail wines cumulated into the myth of democratic participation and the idea to give the power to the people. Again, this resonates with the becoming of the nation state in
Australia and other New World countries, as a process of emancipation from the colonial masters.
The myth of Australian wine accords with the institutional and cultural sociology literature on the myths and their effects. The novelty of this study concerning the mythification of a complete category lies within the complexity of the myth, comprising different perspectives,
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which potentially conflict each other. For one, one foundation of the myth builds upon an elite exemplar, which was created by a humble man, Max Schubert, who is celebrated as the renegade that he never was. This aspect allows the audience to acknowledge Australian wine as among the best wines of the world. However, the notion of class distinction, based on the awards this exemplar received and the elite level of its release prices, not to mention the prices reached at auctions, seem to contradict the notion of the renegade, which entails being different from European elite practices. This tension is even more evident in the second foundation of the myth, the Yellow Tail. This second exemplar grounded the entire category on a solid mid-status level. The blue-ocean aspects of this novel product introduces a new language into this category, simple and straight forward. Again, this stands in stark contrast to the Old World attitude of sophistication that comes with wine culture. Thus, it is an antithesis towards the Old World, but also towards aspects of the Grange, since the Grange is part of the elite group of global iconic wines. However, both exemplars are unified on two levels:
First, on their status as renegades, and, second, on their shared practices of scientific winemaking. The latter represents the DNA of the Australian wine industry. It unifies the category members and grants authority to those who employ these practices. The institutional anchor for this foundation of the myth lies within the establishment of the first scientific winemaking university of its kind, the Roseworthy College. Although the name of this educational institution disappeared, the myth still lingers and is echoed by universities offering courses in oenology, such as the Adelaide University or Charles Sturt University.
These different aspects together hold the belief system and values of the Australian wine category together. They represent an abstract form of the main beliefs that are fundamental for the identity of Australian wine and their member organizations. The unifying core value revolves around the myth of scientization. Scientization alone, on the contrary, would not suffice, as it lacks regional, national, contextualization.
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6.5. Phase 4: Reaching Critical Mass – the Emergence of a
Middlebrow Category
In phase 4, consolidation of the new practices, the still fragile identity of Australian wine, and the deepening the myth are central. The second innovation, Casella’s Yellow Tail, changed the entire landscape of the wine markets globally. This novel wine added a new foundation to the myth of Australian wine. Even more importantly, the Yellow Tail wines reached market dominance in the most important markets, the UK and North America. Based on the sheer volume of Yellow Tail wines being sold around the globe, Australian wine could reach critical mass, which allowed for the last necessary step towards the status leap of the entire category. The emergence of the middlebrow category of low price quality wines was important to reach new audiences. However, the new Australian wine category did not fragment into niches. Rather, the new category added another layer to the overall category of Australian wine. A layer of products catering mass markets that is.
During this phase, a novel and last mechanism came into play, adding to the overall theorization of change: stigma reversing. After initial non-confrontation, subsequent gradual shifts towards confrontation, this phase is characterized by the ultimate confrontation, stigmatizing the stigmatizers by means of reversing the original accusations. Besides, stigma reversing represents the ultimate strategy to legitimize the novel category. This is fundamentally different to the literature on stigmatization, which would expect peaceful co- existence as a final stage (compare to Hampel and Tracey, forthcoming). Shielding the stigma alone was insufficient in this case, as the central actors directly attempted to re-stigmatize the category. This resonates with the highbrow judgment from European wine “snobs” and the highbrow judgment from elite actors, such as intellectual comedians. Thus, the self- reinvention was necessary to also balance the positive verdict from highbrow judgement with the positive verdict from middlebrow judgement. This allowed the novel category to stand on
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the shoulders of elite criticism and the taste of the masses. Thriving on both fostered the full legitimacy of the novel category, its offerings and practices.
Category emergence usually concerns fragmentation into subcategories (the porn comedy, see Jensen, 2010), bricolage (the nouvelle cuisine category, see Rao, Monin and Durand,
2005) or blending (the category of modern architecture, see Jones, Maoret, Massa and
Sevjenova, 2012). Typically, these new or de-novo categories emerge as or within niches, in the shades of mass market attention. Thus, these new categories are subject to critical evaluation by a specific audience that could finally grant legitimacy. In the movies industry, these arbiters are film critics. In gastronomy it is culinary critics, in modern architecture it is art critics and in wine it is wine critics, who hold the powerful position to withhold or grant legitimacy for a new category. Based on the findings of this study, I provide an alternative view on emerging categories that differs from the literature in the following aspects: First,
Australian wine caters to all levels of market offerings, from the bulk wine end (not a topic of this thesis), to the middle status mass market and the elite end of the market. Probably,
Australia was the first to cater to a real mass market for quality wine on a global scale. The domestic market in Australia is comparably stable and underdeveloped, since beer was the preferred alcoholic beverage. Thus, the focus was on the global market, particularly on the markets that were either non-wine countries, such as the UK or new to wine, such as Canada, and China at a later point in time.
Secondly, since Australian winemakers had a market focus on high volume production from early on, the emergence of the novel category of mid-level low price quality wine was a logical consequence to fill the gap between expensive niche wine and low quality inexpensive bulk wine, which got more and more into the focus of critique.
Thirdly, critics usually focus their attention on high class or high status products, which convey reference to arts (in one way or the other). Industrial wine production is not of interest for wine critics per se. The consequent void of critical judgment needs to be filled, since the 22. May 2017 Daniel Semper 164/211
category is novel and audiences seem unsecure in what to think about the novel product. In this case, the average wine consumer becomes the expert. Every buying decision sums up to a statement of positive critical judgment. Online debates add to this phenomenon, reporting blind tastings, in which the novel wine holds up well compared to other wines of a similar price range.
The point concerning the judgement by critics seems an omnipresent topic in the category literature as the major driving force to gain legitimacy or for that matter to lose legitimacy through the effects of the category imperative. The phenomenon has been studied in the context of food and beverages (Negro, Hannan and Rao, 2011; Kovacs, Carroll and
Lehmann, 2013; Kovacs and Johnson, 2013; Delmestri and Greenwood, 2016), in the field of arts (Khaire and Wadhwani, 2010) and architecture (Jones, Maoret, Massa and Svejenova,
2012). All of the issues related to the question of legitimacy in these areas are subject to highbrow judgment. Highbrow judgment is understood as in coherence with high quality products (Peterson and Kern, 1996). Phillips and Kim (2009) studied the effect of disguise of lowbrow music from highbrow judgment in early Jazz music recordings, which were considered lowbrow at the time. Along this line, the emergence of the novel category of wine pushed forward by Casella’s Yellow Tail wines, opened the space for a new understanding of judgement and evaluation that sidesteps the dichotomy of highbrow judgment by professional wine critics and lowbrow taste. Legitimacy does not seem to play a role in low status, thus lowbrow, offerings. Yellow Tail wines, contrary to the bulk end of the wine market, pursued a clear market identity that asked for legitimation. But who should evaluate the social desirability of the novel category offerings? As the findings indicate, an interplay of two effects seems to account for the legitimation of the new category. First, the cognitive legitimation was given by the sheer number of Yellow Tail wines available in the market. The market presence was undebatable. Second, moral legitimacy was granted through the democratization effect this new category entailed. The democratization, as many interviewees referred to the Yellow
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Tail phenomenon, gives the “power to the people”. No longer the entire judgement upon the quality of wines lied upon the shoulders of professional wine critics and their (often snobbish) highbrow taste. This movement reflects an emancipation step against the traditional authorities, which parallels the first emancipation movement by Penfolds Grange on a broader level, precisely because of its democratic nature. Pragmatic legitimacy was granted on the basis of value for money on one hand and on the basis of scientific winemaking on the other hand. Scientific winemaking was at the time, in the year 2000, already an established and globally diffused method of wine production. Consequently, the Yellow Tail wines, although positioned against the highbrow taste market identity of the Grange, thrived on the same fundamental values of modern, and more importantly, Australian style of winemaking.
Of course, singular highbrow judgment verdicts that stressed the quality for money ration and the overall good quality level and persistence of these wines, did not harm the overall effect.
Instead, it might have amplified the effect to the extent that even the highbrow critics acknowledged and confirmed the masses’ taste. However, it seems important that the highbrow judgment was sparse. It did not take over the function of legitimating the new category.
According to the strategy literature, which draws on Yellow Tail as an example of a blue ocean strategy, the position of the novel market offering creates new markets which did not exist before. This is, because blue ocean product re-define the existing range of products in a way that reaches new audiences. The emergence of such a category happens, thus, in a market void, a niche that did not exist before (Kim and Mauborgne, 2004). A category emergence perspective adds to these insights the notion of social and institutional embeddedness. The creation of a novel product, as difficult as such an endeavor is, seems to fall short in explaining the overall phenomenon and its success. The main argument put forth by marketing and strategy scholars seems to revolve around the new balance between price, quality, a reduction of complexity, prestige, an increase in the ease of drinkability, access and 22. May 2017 Daniel Semper 166/211
selection, and the elimination of aging factors, storage requirements and wine codes (Kim and
Mauborgne, 2004). However, from an institutional perspective the main question remains:
How could this novel wine be successful, particularly since it did not build upon a pre-defined and approved script? Here, the insights from this study aim to contribute and enrich the blue ocean perspective by highlighting the relevance of legitimation and category dynamics.
The dichotomy of highbrow and lowbrow judgment seems to implicitly pervade the literature on cultural offerings in categories. These offerings can be authentic based on highbrow judgement or inauthentic due to lowbrow taste (see for instance Kovacs, Carroll and
Lehmann, 2013). By drawing on a blue ocean perspective I aim at enriching the category literature. By breaking the dichotomy, the blue ocean strategy results in the emergence of a middlebrow category. This novel category bridges the prior polarization between cheap low quality and expensive high quality offerings (see for further elaboration Rubin, 1992; Bourdieu and Whiteside, 1996). This middle position allows to explain resilience and stability of categories, as well as change dynamics, as the following chapter will elaborate.
6.6. A First Outline of a Theory of Category Gravity and Attention
Categories are understood as comprising organizations, which are bound together based on family resemblance (Rosch and Mervis, 1975). The definition of family resemblance leaves the Aristotelian logic of sufficient and necessary conditions for membership status behind.
Thus, prototype theory allows for a certain degree of fuzziness and which describes reality more accurately. Membership is understood as a graded form of categorization, a multi-axis continuum, not a clear-cut distinction.
Rosch’s initial definition (1973) puts forth a notion of category prototype as the most salient category member. In later definitions, the prototype is understood as the most central member of a category, as organizations typically evolve around a prototype (Rosch and Mervis, 1981). 22. May 2017 Daniel Semper 167/211
Prototypes are central figures for members as well as audiences. They are understood as the most representative member of an organization in the eyes of the audience (Rosch and
Mervis, 1975). However, current definitions appear ill defined, somehow applicable to both interpretations of prototypical organizations as average or most salient members. In addition, a prototype could also be seen as an abstract representation having attributed the salient features of the category members (Jones, Maoret, Massa and Svejenova, 2012).
The distinction between centrality and saliency of prototypes provides a fruitful ground to develop a revisited theory of categorization, integrating both aspects as different but simultaneously relevant features of categories. Such a step is especially relevant, since exemplars have attributed category unifying powers, as they bundle the attention of key audiences (Nigam & Ocasio, 2010).
Besides, the distinction of attention and category gravity allows for a different vantage point upon categories compared to the concepts of population density and niche width employed by population ecology scholars (see for instance Freeman and Hannan, 1983). This thesis builds upon the relevance of population density as a central characteristics of categories. This is also reflected in the concepts of category contrast, defined as the degree of membership
(Kovacs and Hanna, 2010). Thus, categories differ from each other in respect to the similarity of organizations grouped around a central prototype. The more similar organizations are, the higher the category contrast is. Such a category understanding would implicitly assume the central organization also to be the most salient member. Despite this argument often being true, saliency and centrality does not always apply as a unified characteristic. Hence, I propose an alternative view, which allows for a finer grained scrutiny of category dynamics.
Organizational density is a highly relevant characteristic of categories. It tells the audience about substitutability of offerings and allows for a clearer market identity of organizational members and thus of the category (as an abstraction of organizations and their offerings) as a
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whole. The market identity of mini-vans and its models of Espace (Renault), Voyager
(Chrysler), Sharan (VW) and others provide a good basis for audiences to grasp what the core features of the market offerings are and thus what to expect. However, none of the above offerings stands out clearly. Some have advantages in size, others in petrol consumption etc. Since there are manifold similar offerings, we can speak of a category with comparably high density. One offering is easily substitutable for another, depending on preference. Considering electric cars the market comprises small and medium sized cars produced by Renault, BMW, Opel, Chevrolet, Hyundai, Kia, Ford or Nissan. But the most prominent model is a full size limousine by Tesla. So, the question is, can we speak of a prototype in the sense of an average representative, a central member of the market category? Rather not. Nevertheless, Tesla and their model S attract a lot of attention.
Consequently, Tesla has high market salience.
Building upon this example, the distinction between centrality and organizational density on the one side and the prominence and saliency of one exemplar on the other side asks for a concept that accounts for both characteristics at the same time: a category center of gravity and a center of attention.
The center of gravity refers to the force of centrality, organizations revolving around a certain central point. In this case, the center can be an organization or a prototype, or the abstract mean of features. The center of attention refers to the saliency of certain category members, which can be but does not necessarily have to be in the category center.
The distinction between these two forms of category exemplars offers a better understanding in the analysis of category dynamics, as often in change processes, vanguard organizations appear at the forefront, whereas others adopt later. Thus, in change processes, categories might tend to stretch (see for instance Delmestri and Greenwood, 2016), as the center of attention, most likely the vanguard organization, moves out of the center of gravity. This leads
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to a situation of category stretching as, in a second phase, some early adopters will follow.
The organizational density in the center will decrease, the contrast appears lower. In a third step, late adopters might follow and the center of gravity becomes dense again.
However, in cases of different category centers of attention and gravity, these will have to be unified by a theory of value (following Paolella and Durand, 2016). Otherwise, these organizations or their offerings will not be visibly (for the audience) connected with each other through membership in the same category. Figure 30 provides an illustration of a category contrast and exemplars. The box in the bottom left corner exemplifies a situation of two centers, one of attention and one of gravity, which are unified by the theory of value. This theory of value functions as a backbone of the category, which, thus, results in high category contrast.
The concept of the center of gravity corresponds with population density, a borrowed concept from population ecology, which is one of the major streams within the category literature. In simple words, the organizational density of a category refers to the number of organizations that are grouped together. In addition to the number, also the closeness plays an important role. Closeness can also concern similarity or common features organizations within a category share. These features result in the category saliency, the boundary fuzziness (or clarity) and the overall category contrast. Thus, the question of how organizations are grouped together plays a crucial part in the success of categories.
The second point, the saliency of the porotype builds upon the assumption of the existence of a prototype. In case of exemplarless categories, as suggested by Paolella and Durand (2016), a theory of value would instead suffice.
Why such a distinction? The analytical separation between the mass of organizations, the category gravity, and the focus of attention that a category attracts helps better understand the dynamics in category change processes. So far, the implicit assumption in the literature seems to be that category change processes unfold either as a fragmentation into sub-categories (see for instance Brint and
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Figure 30: Category Contrast and Theory of Value
Prototype, high category contrast low category contrast verticaldistribution verticaldistribution
horizontal distribution horizontal distribution
Centers of gravity & attention, high category contrast low category contrast verticaldistribution verticaldistribution
horizontal distribution horizontal distribution
Karabel, 1989), an emergence of new or de-novo categories (see for instance Weber, Heinze and
DeSoucey, 2008; Jones, Maoret, Mass and Svejenova, 2012). A rare example of a change of an entire category is the study of Grappa by Delmestri and Greenwood (2016). In all cases, the analytical description would have provided more precision in explaining the processual steps and interrelations of how and when which organizations first move out of a category, which organizations follow, how they build alliances, how they establish a new category and finally how the new category becomes legitimate by employing a differentiated view on category attention and gravity. This distinction allows for a better understanding of the conditions under which organizations break out of categories, how these organizations form alliances with different organizations and gain access in different categories or classes. In a second step, it allows to better understand the category inertia, as step by step other organizations follow the example of the vanguard organization. Once several organizations followed 22. May 2017 Daniel Semper 171/211
the same path, the category will stretch. Once the majority of organization followed suit, the center of gravity will shift and, thus, the category will have closed boundaries again.
The approach of category attention resonates with the concept of institutional stars by Zucker and
Darby (1996) who speak of star scientist and their effect on the subsequent success of biotech innovation, as their presence and involvement in certain projects attracts more attention.
Based on the examination of the unfolding of the change process in the Australian wine industry from stigmatized to mid-high status, I identified change dynamics described in figure 28. First, the status was of colonial wine. For many years, this was a comparably stable category, delivering low quality products according to the low status ascription. In the 1950s, Penfolds Grange revolutionized the industry through the novelty of its production approach. It took until external top ratings that this novel product became globally legitimate. As a consequence, the star of the category broke the category glass ceiling and became high status, member of the global category of iconic wines. This break-out scenario reveals a dis-location of the center of attention, away from the other organizations, since the prototype moved out if the center of gravity.
As other producers followed the same example and tried to reach out for high status acclaims, the center of gravity started to move upwards. More and more organizations followed the original example of the star, the organization in the center of attention. This lead to a further stretch of the category and a consequent status leap. But it was until the second revolution, the Yellow Tail, which grounded the elite movements of the category in democratic values. Only then, the center of gravity became solid enough to build the backbone of the novel category, which closed the category boundaries. In this case, the center of gravity is exemplified by a second category prototype, representing the average population. The emergence of the new sub-category of low price quality wine extended the overall meaning of the category of wine. This horizontal extension represents the dis-location of the center of gravity. Due to the sheer production volume of the new wines, the new category center of gravity builds critical mass, allowing for the completion of the status leap.
The connection between the elite organizations and the organizations in the center of gravity of the category lies in the common understanding of the new production method and the underlying values.
Thus, the theory of value as proposed by Paolella and Durand (2016) seems highly relevant to span a
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tension field between elite and mass producers, which unites them in their values and thus identity. A theory of value will, thus, result in higher category contrast.
A theory of category gravity and attention will have different implications on core concepts of category leniency, category saliency, category boundary, category structure and category contrast. First, in cases when category prototypes are not located in the center of gravity, the category structure will be stretched vertically and most likely also horizontally, as the prototype will differ in features as well as in status. Secondly, the category contrast will increase with higher organizational density around the center of gravity. Categories lacking well-established boundaries are typically seen as not useful and are expected to not reach institutionalization but to disappear (Pontikes and Barnett, 2014). The creation and maintenance of category boundaries requires boundary work by category members. Thus, thirdly, the unified appearance of organizations, based on high category gravity, sharpens the contrast and helps establish a category boundary. Fourthly, the category leniency will conversely depend on the nature of the category boundary and the category contrast.
Categories with lower gravity and/or a differentiation of the center of gravity and the center of attention will be less constraining and thus more lenient towards their members. Point five addresses the category saliency, which depends on the center of attention. In cases of centrality of salient prototypes, the category will appear monolithic. In cases of distinction between the center of gravity and the center of attention, the category will either confuse audiences or require a unifying common ground, which connects the central exemplar (center of gravity) with the peripheral exemplar (center of attention). Finally, point six concerns category change dynamics, which are rather initiated from the center in cases of high gravity and the concurrence of the centers of gravity and attention (compare to Rao, Monin and
Durand, 2003; Greenwood and Suddaby, 2006) or from the periphery in cases of distinction between the center of gravity and the center of attention.
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6.7. Dis-Enchanting Authenticity
The question of authenticity pervades the category literature concerning experience goods industries.
So far, the literature suggests an imperative for a backwards orientation towards traditions, craftsmanship and inherited skills as the only means to reach authenticity. In cases of deviation from the ideal image, authenticity claims are strategically produced images that evoke emotions connected to the past, tradition and craftsmanship and thus provides authenticity again, manufactured authenticity this time (Peterson, 2013).
The close tie in creative industries between moral and pragmatic legitimacy with authenticity usually involves efforts of impression management. Wine is highly marketed all over the world. They are mythicized and have impressive stories attached. Hence, they often employ invented traditions and histories with very little relation to origin or genuine authenticity.
Thus, Australia, lacking trustworthiness in respect to their comparably short history in winemaking, takes a stance against this delusion through fabricated authenticity claims. An often mentioned example of authenticity decoupling, the disguising of inauthentic practices and the open display of tradition and heritage, is the Italian winemaking industry. This is also true for other wine regions in
Europe, such as France. Especially, Bordeaux is famous for decoupling their front-stage portrayal of tradition, artisanal winemaking, inherited knowledge, and craftsmanship from their backstage industrial and highly scientific winemaking practices.
Australia instead chose another path, to openly show and display their industrial scale wine production and the involved scientific methods. The gigantic tanks stand openly in the fields, not hidden behind cellar doors or underground, as they are in Europe. Wine tourism is a relevant industry sector in
Australia. Particularly Penfolds’ Magill Estate attracts a lot of tourists.
In addition, they often display science in form of pictures showing their laboratories or microscopes put behind glass shelves right at the cellar door. Also, they often refer to scientific (clean) connoted phrases to describe wines, e.g., clean skin, fruit driven.
Consequently, they show that they are different and modern, even more modern than the famous competitors in Europe or overseas. This momentum in their short winemaking history is pivotal for their identity and pride. Thus, Australian winemakers and thus their offerings try to reach authenticity
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through openness. The idea is to be perceived authentic for who you are. Scientists that is. Employing
European, especially Burgundian, techniques, rather discredits imitators, as there is only one original.
Imitators would likely be perceived as inauthentic.
In the case of the Nebbiolo wine revolution as described by Negro, Hannan and Rao (2011) authenticity of traditionalists seems given. The modernists instead had to redefine the concept of authenticity as an expression of creativity. This concept is closely related to the notion of authenticity through originality (see for instance Jones, Anand and Alvarez, 2005). The traditionalist movement strived for genre conformity, whereas modernists build upon the logic of modern market mechanisms that seemed to favor and finally displace tradition with modernity (Negro, Hannan and Rao, 2011).
Such an endeavor involves the creation of a movement, of alliances and enemies. In the Australian case, there was no social movement behind the developments. Authenticity, nowadays, seems granted for fine Australian wines, as otherwise they would be contested and challenged, and could not reach high acclaims in reviews and ratings. Hence, the authenticity of Australian fine wine seems not in question, although the difference in their approach is openly displayed.
Thus, I suggest an alternative form of authenticity that expands the concepts of fabricated authenticity through images of tradition and the glorification of the past or through an expression of originality. Fine
Australian wines are perceived as authentic based on an expression of modernity and the logic of progress through science and technology.
This finding is partly consistent with the study by Negro, Hannan and Rao (2010; 2011), which introduced the notion of authenticity as an expression of modernity, not of tradition. Modernity in this case was a reference to French winemaking techniques, whereas tradition was a reference to Italian winemaking. However, the Australian case extends these insights by adding the notion of authenticity of scientization, the myth of the authority of science and the prospects of progress. The concept of modernity alone would fall short in capturing this effect. Scientization puts the idea of rationalization one step further. Moreover, I aim to apply the notion of authenticity of scientization to the authenticity of the entire category. The entire category of Australian wine thrives on scientization. This phenomenon is more than a change process among a niche community, initiated by category defectors, introducing high status features from a related category. First, science was new to the overall category of wine globally. Second, it did not only affect a market niche. Thirdly, compared to
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the use of different casks, which is only visible for enthusiasts and experts, science and technology is easily detectable when either reading media reports about Australian wineries or visiting Australian cellar doors.
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7. Conclusion, Limitations and Future Research
This dissertation builds upon an established tradition of institutional literature concerning tackling field level change processes (Greenwood, Hinings and Suddaby, 2002; Zietsma and
Lawrence, 2010). The study draws on an intense three-month field research in the Australian wine industry and includes longitudinal data from archival sources. The overall goal was to provide an empirical example of status dynamics of an entire category that passed all stages of the status hierarchy, from illegitimate and stigmatized to low, mid, high and elite status.
Since the literature on category dynamics is sparse, particularly in this respect, the thesis aims at contributing to the literature on market categorization by addressing this gap.
The analysis of the case of Australian wine highlights an alternative explanation to category status dynamics that strives for differences, instead of emulating legitimate practices. This empirical puzzle provides a paradox that seems meaningful on many levels of the categorization literature. For one, the study speaks to category change processes, based on a new form of theorization that reveals first non-conformity and later gradual confrontation.
This finding is fundamentally different to other studies on category change processes (see for instance Brint and Karabel, 1989; Delmestri and Greenwood, 2016).
Secondly, this study contributes to the literature on categorization by providing an empirical example of organizational status change through a dis-embedding of its category background.
This was achieved through breaking the category glass ceiling. This finding also speaks to the status literature, as it provides an example of status dynamics through shifts in affiliation by category membership from the national category of stigmatized colonial wine to the global category of iconic wines. These events, first, allowed for global legitimacy. Second, it allowed for an avoidance of negative status associations through category membership in the stigmatized category of colonial wine. Thirdly, this allowed for a consequent positive status contagion effect through elite membership in a later stage.
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A third contribution relates to the literature on category emergence. The empirical example illustrates a different scenario of category emergence as typically dealt with in the literature
(see for instance Weber, Heinze and DeSoucey, 2008; Jensen, 2010; Jones, Maoret, Massa and Svejenova, 2012). The emergence concerns a mass market instead of a niche market category. Besides, the emergence of the middle status category of cheap quality wine, exemplified by Casella’s Yellow Tail wines, introduces the concept of middlebrow judgment into the literature on categories. On one side, middlebrow judgment provides insights into different legitimization strategies of categories, as highbrow judgment seems inappropriate in this case. In addition, middlebrow judgment connects the extreme poles of highbrow and lowbrow strata of the category hierarchy. As such, the middlebrow strata ground the category in terms of the category gravity, since the majority of market offerings fall into this status level.
A forth contribution suggests an alternative view on categorization and category change dynamics, through disentangling the population density and the attention focussing on the category prototype. This notion of category gravity and category attention aims at higher scrutiny and precision regarding change processes of and within categories. Particularly, the effect between vanguard organizations, the shift in attention by the audience, and the category inertia by the other category member organizations, can be better described and analyzed.
Another contribution concerns the authenticity of category offerings, which thrive on difference instead of similarity with traditional concepts of authenticity. Although, authenticity does not reside within products or organizations (Peterson, 2013), audiences grant authenticity as a specific form of legitimacy in experience goods industries. The novelty regarding authenticity lies within the intentionality towards progress, rationalization and a genuine future orientation, conversely to the traditional approach towards the past, heritage, tradition and craftsmanship.
Moreover, the findings suggest an alternative view on de-stigmatization processes of categories, which unfold in a continuous engagement in stigma work as a pendulum process,
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swinging between stigmatization, attempts of de-stigmatization, attempts of re-stigmatization and so forth, instead of a linear model of stigma work (see for instance Hampel and Tracey, forthcoming).
The overall contribution lies within the novel form of theorization that allowed the entire category to change its meanings and status. The mechanisms comprise interrelated processes of category history detachment, as similar to category detachment (Delmestri and
Greenwood, 2016), high status neglect (inconsistent with the literature on category and status dynamics), category exemplar mythification (consistent with the notion of rational myths in the institutional literature, see for instance Zilber, 2006), and category stigma reversing, as the ultimate legitimation of its high status position.
Thus, Australian wine was successfully theorized on a high prize and a low prize level, both building on distinction instead of emulation. The legitimacy of novel category grounds in the new profession of scientific winemaking, which thrives on the authority of science and innovation, the cornerstones of modernity (Schofer, McEneaney, Drori, Meyer, and Ramirez,
2003). Based on the professionalization of winemaking (see also Bottura, Corrado, Forgues, and Odorici, forthcoming) the category of Australian wine built a strong identity that resonates with the national identity and the history of the country.
7.1. Limitations and Future Research
The thesis provides an in-depth analysis of category change dynamics within one specific case and context. The models and theorization mechanisms proposed in this study aim at theoretical comparability, as an abstraction from the findings and its context. However, I acknowledge the limitations of the generalizability of the grounded model of category change.
As with all qualitative research and in particular with case study design addressing field-level change processes, scope conditions are bound to the problem of either offering breadth or depth of the analysis. One scope condition deals with the national particularity of Australia as
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the case. On one hand, Australia seems highly suitable based on its innovation leadership.
Nevertheless, the specific post-colonial becoming of the nation state that parallels the change process of the category of Australian wine, could potentially bias the results. Although scientific winemaking, nowadays, is a global phenomenon, its contextualization might derive different meaning and practices in other New World countries, as well as in the Old World of winemaking. This leads to further questions about the becoming of other New World wine countries, from colonial times to a modern era. Also an interesting question would be to address the effects the professionalization of winemaking and its scientific foundation had on the Old World. Theoretical generalizability to other New World countries, therefore, is limited.
Another scope condition deals with the nature of data retrieval. The study tried to capture several perspectives from different vantage points, including winemakers, small and huge organizations, family owned organizations and organizations with highly dispersed ownership, traditional and novel organizations, representative from different regions, wine critics, merchants, representative from different associations, and wine scientists. However, data saturation can never be fully reached (Glaser, 1978). There might still be potential variation within the field that the data inventory does not capture. Another limitation in this respect lies within the lack of accessibility concerning some relevant players (see chapter 3). Thus, I had to retrieve as much secondary data as possible in order to compensate for this data gap.
A scope condition concerning the methods employed for this study deals with the inhomogeneity of the data and the conflation of real-time and archival data. On one hand, this triangulation provides higher quality criteria. On the other hand, the question of validity concerning the archival material based on the availability of data has to be taken into account.
As a response, I tried to deal with various data from different sources in a sensible way, deriving patterns of meaning only on the basis of highly repetitive references and grounded in several sources.
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The limitations of this study, however, offer fruitful and intriguing questions and promising venues for further research. For one, this addresses the question of how scientific winemaking diffused to other winemaking regions and countries so that it could reach global legitimacy in the end. A particularly interesting question concerns the responses to this novel approach in the Old World. In addition, another highly relevant question concerns what comes after the study period of 18. century to 2008. After the world financial crises, novel movements and developments seem to happen in the Australian wine industry, such as the novel regionalization strategy, eventually replacing the common national label, a movement towards cool climate wine production and the novel movement of terroir and bio-dynamic winemaking.
It would be interesting to analyze other cases of different contexts to see if the grounded model holds true. An intriguing contemporary case to further analyze the novel model of category change based on the distinction between category gravity and attention, would be the electric car industry. Tesla seems to provide a good example of a category prototype that does not reside in the center of category gravity. This case would be highly interesting to scrutinize, as it unfolds in real-time. This direction would be promising to elaborate on the applicability of the category change dynamics model.
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Daniel Semper - Curriculum Vitae Institute of Organization & Global Management Education – JKU Linz Altenbergerstrasse 69, 4040 Linz, Austria [email protected]
Professional Employment
2012 – 2017 Academic Director - Master Global Business Troika, JKU Research & Teaching Ass. - Inst. for Org. & Glob. Management Edu., JKU Teaching Fellow - Higher School of Economics, Nizhny Novgorod, Russia Visiting Lecturer - University of Bergamo, Italy 2016 Wirth Fellow - University of Alberta, Canada 2014/15 Visiting Scholar - University of Technology Sydney, Australia
Education
2012 - 2017 Johannes Kepler University Linz, Management Studies (Dr.rer.soc.oec.) 2010 - 2011 Warwick Business School, Management & Organizational Analysis (MA) 2008 - 2010 Karl Franzens University Graz, Sociology (MA) 2001 - 2008 Karl Franzens University Graz, Sociology (BA) - part time
Research Projects My research projects explore how people and organizations initiate, struggle, cope with, resist or strategically use change processes; how people and organizations deal with various institutional demands; how people and organizations cope with ambiguity and complexity.
Conference Presentations & Invited Talks
2016 EGOS conference, University of Napels, Italy: Praise the Renegade? Institutional change and status re-categorization.
2016 OLKC conference St. Andrews, Scotland: being and becoming a university student.
2016 Wirth Institute, University of Alberta, Canada: dis-enchanting authenticity: the case of Australian wine identity.
2015 OLKC conference Cattolica Milano, Italy: learning and resistance: university internet memes as visual artefacts for institutional resistance.
2015 NIT workshop WU Vienna, Austria: The materialization of humorous mimicry as a form of institutional work: the case of university memes.
2015 Austrian Early Scholar Workshop in Management, JKU Linz/ WU Vienna, Austria: institutional conditions for quality: institutional work as an assemblage of socio- material practices: the case of the Australian wine industry.
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2014 Austrian Early Scholar Workshop in Management, JKU Linz/ WU Vienna, Austria: Institutional conditions for quality. How success can unintentionally turn into failure: the Australian fine wine paradox.
Workshops & Trainings
2016 Qualitative Methods Doctoral Workshop, Trish Reay, University of Alberta, Canada.
2014 Qualitative Methods Workshop, JKU Linz, Austria.
2013 Cultural Sensitivity Training, IDI, Munich, Germany: qualified administrator.
2013 Workshop in Organization Theory, Copenhagen Business School, Denmark.
2013 Latent variables & multivariate statistics workshop, University Cologne, Germany.
2012 Scancor workshop in Institutional Theory, WU Vienna/Stanford University.
Teaching Interests
I am a versatile instructor with interests in teaching courses in areas of organizational theory, organizational and institutional change, innovation and strategy, qualitative methods, and inter-cultural management.
Teaching Experience: winter term (wt) & summer term (st)
2017 wt Master Course in Global Governance, HSE Nizhny Novgorod, Russia
Master Course in Cultural Awareness, HSE Nizhny Novgorod, Russia
2017 st Master Course in Cultural Awareness, University of Bergamo, Italy
Bachelor Course in Qualitative Research Methods, JKU Linz, Austria
Bachelor Course in Management and Organization: Organizational Perspectives on Strategic Management, JKU Linz, Austria
2016 st Master Course in Cultural Awareness, University of Bergamo, Italy
2016 wt Bachelor Course in Austrian Political and Economic Context, University of Alberta, Canada. (in cooperation with Prof. Wineroither)
2015 wt Master Course in Global Governance, HSE Nizhny Novgorod, Russia
Master Course in Cultural Awareness, HSE Nizhny Novgorod, Russia
2015 st Bachelor Course in Qualitative Research Methods, JKU Linz, Austria
Master Course in Cultural Awareness, University of Bergamo, Italy
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2014 wt Master Course in Global Governance, HSE Nizhny Novgorod, Russia
Master Course in Cultural Awareness, HSE Nizhny Novgorod, Russia
2014 st Master Course in Cultural Awareness, University of Bergamo, Italy
Master Seminar in Advanced Topic, Literature and Practices: Perspectives on Institutional Complexity. JKU Linz, Austria
2013 wt Bachelor Course in Structure, Strategy and Innovation. JKU Linz, Austria
Bachelor Course in Organization Theory. Seeburg University, Salzburg, Austria
MBA Course in Organization and Leadership, LIMAK Business School, Linz, A.
Master Course in Global Governance, HSE Nizhny Novgorod, Russia
Master Course in Cultural Awareness, HSE Nizhny Novgorod, Russia
2013 st Bachelor Course in Structure, Strategy and Innovation. JKU Linz, Austria
Master Seminar in Advanced Topics, Literature and Practice: Institutional and Organizational Change. JKU Linz, Austria
2012 wt Bachelor Course in Structure, Strategy and Innovation. JKU Linz, Austria
Master Seminar in Organization and Management: Strategic Management and Institutional Complexity. JKU Linz, Austria
2012 st Master Course Organization, JKU Linz, Austria
2010 wt Bachelor Course in Introduction to Sociology, University, Graz, Austria
Personal Skills Languages: German: native; English: excellent; French: basic; Italian: basic. Inter-cultural skills: qualified administrator, IDI, intercultural sensitivity inventory.
Publications Semper, D. (2011) Championleague der Universitäten. Hochschulrankings in der Zeitungs- berichterstattung. In: P. Pachernegg, C. Pichler, C. Pilz, D. Reicher, D. Semper (Hg.) Internationale Beziehungen aus der Perspektive nationaler Öffentlichkeiten. Beiträge zu einer Soziologie internationaler Beziehungen. Wien: Lit Verlag. Semper, D. (2011) Der mediale Wettbewerb Europäischer Universitäten. Internationalität und Nationalismus: Hochschulrankings in den Medien. Saarbrücken: VDM.
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