AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 14


Ceago Vinegarden: How green is your wine?
Environmental differentiation strategy through Eco-labels 

 Magali A. Delmas, Vered Doctori-Blass and Kara Shuster 


As the sun began to set over the water, Jim Fetzer sipped a glass of his Kathleen’s Vineyards Sauvignon Blanc 2005. The wine was one the first vintages of his newly established Ceago winery, located on the shores of Clear Lake in Lake County, California. While drinking in the breathtaking view, Jim was also enjoying the wine. The wines rich aromas of juicy apricot and peach were coupled with wonderfully light undertones of vanilla oak spice. He was very proud of the wine’s recent recognition in the winemaking world. However, Jim’s appreciation for the wine went beyond the taste. Wine production at Ceago was executed with great care and respect for the environment. Ceago Vinegarden was a certified biodynamic agricultural enterprise. Farms and vineyards that are certified biodynamic follow strict guidelines to ensure the sustainability of their growing and production practices.

Jim was a passionate advocate for the environment. He spent all his life making wine and promoting sustainable wine practices. Though he was convinced that sustainable practices produce better quality wine, he was not sure how to communicate his passion to his customers. Jim recently reviewed the results of a survey on wine customers’ perceptions of organic and biodynamic wines. Unfortunately, the survey revealed that few customers understood the true meaning behind organic and biodynamic eco-labels. Was communication through eco-labeling the best strategy? Also, in an increasingly competitive industry, was there any room for a differentiation strategy based on sustainable wine practices? Jim was also contemplating expansion of his Vinegarden into an agri-tourism venture, where he could invite people to his vineyard and communicate

the magic and the benefits of sustainable farming. Would expanding the business to include agri-tourism help Jim to promote biodynamic wine making and Ceago’s mission?

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