Terroir: The ultimate blend of tangible and intangible

Like a fine wine, every company is bursting with unique qualities once you get past the labels and sniff out its intangible assets.

In the world of winegrowers, the flavor and value of wine are distinguished by the French term “terroir,” which refers to how a region’s climate, soil and terrain affect the taste.

Terroir is about blending the tangible with the intangible so that diners can better pair wine with food to enhance both the meal and their dining atmosphere. Restauranter Jasper White once said, “I haven’t had much luck in pairing red wine with lobster,” which is good advice.

But there are some well-known gastronomic pairings including matching a steak with a French cabernet, a seafood dish with a Spanish Alberino, or my personal favorite pairing, a full glass with an empty hand.

Casual wine drinkers will laugh at the absurd language often used by wine connoisseurs comparing a wine’s flavor to berries, licorice, citrus fruit or a “taste of hay.” Many claim to be able to taste the effects of fog or wind on a grape. I could never pick out the scent of a rubber garden hose or feline urine in wines, but those are real descriptions written by people with finer taste buds than my own.

Yet wine producers do seem to have different styles, so there must be something to the intangible concept of terroir.

For example, the geographic area of Rutherford in California’s Napa Valley is a dusty place, and this dynamic is often highlighted in the marketing campaigns of its local Cabernet Sauvignon vineyards.

Producers boast how the dust softens the boldness of tannic wines making them more enjoyable for a broader range of palettes. Rutherford is also a sunny, hot place with large temperature swings between day and night allowing the local grapes to fully ripen into stronger flavors. I’m getting thirsty just thinking about it.

Likewise, the Sauvignon Blanc grape variety is hardy and therefore can be grown all over the world. But the grape yields wildly different flavors depending on the terroir. Sauvignon Blanc grapes grown in New Zealand, for instance, often has high levels of citrus acid that prompts a zing or pop in the mouth, to use highly scientific terms.

Some viticulturists think the country’s cool southern hemisphere climate and thinner ozone layer mean extra ultraviolet rays can get through to the vines and the grapes hang on for longer before becoming overripe.

Similar terroir effects occur in Europe as well, especially with the phenomenal Pinot Noir and Chardonnay grapes that come from the Burgundy/Bourgogne regions of France. Indeed, this part of the world is the birthplace of the terroir archetype.

These regions have such a rich and deep history that connoisseurs claim to be able to identify each wine by taste down to the tiniest detail of the walls, hedgerows, meurgers, paths and enclosures along the various plots of land – not to mention the calcareous soil sprinkled with clay and limestone.

Terroir is an enormously valuable intangible asset for the global wine industry and its many thousands of producers have done a masterful job marketing this concept to generate profit.

Although it is difficult to put into words what exactly makes a location unique for a certain scent or flavor of wine, the more specific a producer can get about the terroir of their vineyard’s soil, climate and geomorphology (the science of why landscapes look the way they do) the more they can leverage this asset for the bottom line.

The ability to link a particular geography to a wine brand allows some producers to charge astronomical prices for what is essentially fermented fruit juice, no matter how many superlatives are attached to it. So, a wine that is simply labeled “California” will fetch a lower price than one from “Napa County,” which in turn won’t command as high of a price as wine with the label “Napa Valley,” and so on.

At the top of the price pyramid sits famed vineyards like California’s To Kalon or Italy’s Antinori nel Chianti Classico.

The wine industry has plenty to teach about combining a company’s tangible and intangible assets to maximize its value proposition. Think of a wine’s terroir as its secret sauce.

The lesson here is that every business should spend time uncovering and describing its own special sauce. Perhaps the company has a great logistics system, responsive and insightful customer service, clever employee training or anything else.

The point is, in the modern world what makes a company unique probably isn’t hard, tangible assets but something intangible, like the atmosphere of pairing steak with a French Cabernet.