Wine Economics Part III: Reputation

Wine Economics Part III: Reputation

“What’s in a name? That which we call a rose by any other name would smell as sweet.” The Bard strikes to the heart again. In many ways, the first two posts on Wine Economics (Part I and Part II) danced around the importance of reputation. Today, we will hit the nail squarely on the head.

Haut-Brion, Romanee-Conti, Screaming Eagle (can you tell which winery is in the United States?), Margaux. Want a taste? Go take out a loan first. These names have garnered every superlative under the heavens. Apparently, nothing smells as sweet as those that carry notable names. The famous palates of the globe (world, not theater) score these wines straight into the realm of untouchable—95 points on an off vintage. Many have earned the perfect one-zero-zero. Countdown—kaboom! Prices have taken off! All of the above wines fall into the “cult wine” category, and most readers don’t need the advice to steer clear. You don’t really have an option.

Reputation carries great weight, and that weight can pull the price down or lift it sky-high. Individual wineries work hard to differentiate themselves from the pack, and the aforementioned wine critics are one tool in the bag. Most wineries, however, will never see the famed 95+ point mark, and therefore strive for the more important 90 point threshold. Recommendation #1: If value matters to you, buy 89 point wines more often than 90+ wines. Many critics have a bias toward big and bold, largely because they taste so many wines that only the brutes stand out. A plethora of 89 point wines fill wine shop shelves waiting to be appreciated for the blend of primary and secondary aromas, balanced fruit and acidity, and food friendliness. The brutes will take a club to your meal.

Evidence also exists to deny and support Shakespeare’s claim. Many of the great wines of the world, when stripped of their name in blind taste tests, have not smelled as “sweet” to the loftiest of critics. A few famous blind tastings have lifted up the lowly, and cast the mighty down. So perhaps when we broaden “name” to a varietal, a Cabernet Sauvignon by a name other than Screaming Eagle, Caymus, or Shafer can smell as sweet, seductive, compelling, nuanced, and complex. I recommend you find out for yourself.

Now pan 180 degrees left. Lindeman’s, Columbia Crest, Hardys, Casillera del Diablo: these also carry weight—the weight of the masses. These wineries play a different game, and most of you have heard of them as a result. All of these names offer good wines under $10. Breaking into the bulk wine business requires big money, and connections with the Costco’s and Trader Joe’s of the world. These mega wineries, and many others, have succeeded at this disparate game. One thousand $10 bottles earn you as much as that bottle of Haut-Brion.

Once out the doors of the winery, we look out upon the vineyards (location) and varietals discussed in Part I and II. Reputation plays hardball here also. Napa Valley Cabernet increases confidence, and often the price, more than Colorado Merlot. Piedmont Nebbiolo more than Languedoc-Roussillon Grenache. A parable. The owners of Division Winemaking Company, a Portland, OR label, started receiving phone call after phone call one evening. “What is going on?” Finally, one of the numbers popped a friendly face onto the screen, and so the owner answered. “Eric Asimov just recommend your Gamay Noir as the top choice this Thanksgiving.” Division Winemaking Company makes wine at a local cooperative winery they started. Number of cases? A grain of sand in the Sahara of wine. Read more here

Learn from this story. Reputable wines have typically earned their acclaim, but delightful value wines, at all price points, sit in plain sight in the new AVAs, at the local cooperative winery, in the lesser known wine-producing states and countries.

Recommendations to exemplify the point:2013-pinot-noir-bulls-eye_fitbox_300x800

And here ends the III part series on wine economics. Many simplifications exist in the information above. Economic factors certainly overlap and intertwine in a complex manner. However, generalities are necessary to discuss the topic meaningfully, even if imperfectly. 

Clearly, these three posts have only tickled the surface in regards to the manifold factors tilting wine prices. For example, labor costs, the winery facility and tasting room, and distributors also affect prices, and have gone unmentioned until now. I have also discussed economic factors in isolation without attempting to weigh the importance of these individual puzzle pieces. None the less, these broad strokes afford us the  opportunity to analyze our purchasing choices, and hopefully expand our wine repertoire. Allow the hidden gems to delight and surprise you.

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