Category Archives: Cost

Money Can Buy

I, like any good wine shopper, seek out producers over-delivering for their price point. In the nearby Willamette Valley, this means $20-$35 Pinot Noir that tastes like the giants at $50-$80. Last weekend I stopped by Bergström Wines, a hallmark producer in the valley. What I found buckled my knees. The first swirl and smell of three of the four Pinots I tasted left me staggering. Life paused, oh my word, there is a fourth dimension kind of wines.

The heavens opened. Photo taken at a nearby vineyard before driving to Bergstrom.

The heavens open. Photo taken at a nearby vineyard before driving to Bergström.

It started with the 2013 Le Pré du Col Vineyard Pinot Noir. The aromatics took me to another realm. Nothing I have tasted has touched this wine. Strawberry, earth, and pine forest mingle seductively and profoundly on the nose. The mid-weight palate adds cherry cola and soft tannins. This is a knee-buckling, tear-inducing wine—memorable and awe-inspiring. Stellar.

Having tasted the Le Pré du Col, I honestly didn’t care what the rest of the wines tasted like. I could have simply basked in the afterglow of that singular experience. However, the line-up continued to caress my interest, never letting me down from my cloud. The 2013 Silice Pinot Noir followed with its own unique path to Pinot Noir enlightenment. Chocolate covered strawberry and cherry aromas lead with silky, pure, red-fruit on the palate. The fine-grained tannins and strawberry preserve acidity weave smooth layers into the medium-bodied core. An eye-brow raising wine that floats effortlessly between density and buoyancy. Stellar.

This is the first time I have rated two wines as stellar at one tasting. I still encourage all to seek the hand-crafted gems over-delivering at affordable price points. Bergström Wines reminds me, however, that some (only some) have earned the hefty tariffs they charge. If you have the opportunity to taste their wines or purchase a bottle, do not hesitate.

The Head, The Heart, The Slurp

I recently attended an Oregon Syrah tasting with a trio of Willamette Valley winemakers and a few other industry compatriots. We tasted through seven different Oregon Syrahs, including a vertical from Dion Vineyard in the Willamette Valley produced by Anne Hubatch of Helioterra. Violet-blue in color, the 2013 Dion grabbed me by the shoulders and force-focused my energy directly into the glass. Confident white pepper aromatics lead, followed by spice, blueberry, and boysenberry. Floral undertones add a lovely, gentle layer. This wine will excite those who respect and value Rhone Syrah—a mentally stimulating experience.

Other Syrahs from southern Oregon, especially the 2012 Cowhorn Syrah from the Applegate Valley, luxuriously warmed the heart with New World fruit. The Cowhorn Syrah danced a laser-line between density and buoyancy, fruit leather and black pepper. Wines this thick often fail to inspire, but Cowhorn manages to add layers of nuance into the folds of fruit.

Admittedly, Oregon winemakers and viticulturists have only now entered the dawn of this Syr-era. Few have plumbed current or potential vineyard sites with an eye for Syrah gold. The varietal has, however, found a home in Oregon, and the cool-climate Willamette Valley within. I expect to taste starlight from the misty cave depths once it settles into the embrace of well-selected Oregon vineyards.

A few days later, I dined with family at a casual mid-week gathering. My mother-in-law, a bargain wine shopper, opened a bottle of 2014 Blackstone Merlot from California. This sweet, grape slurpee of a wine lacked everything that makes wine sing. It declared itself robotically, centuries away from passing the Turing Test—Mass Market at its worst. It served as a reminder that $10 Washington flattens $10 California every time. Biased as I am, I challenge you: Apothic Red v. Two Vines, Menage a Trois v. Columbia Crest Grand Estates,  Bogle Essential Red v. Lone Birch Red. Let me know your results.

Cheers to wines that stir the head and the heart.

Focus on Fruit

There are no short cuts.

As a new “insider” to the wine trade, I walk the hallowed halls with antennas tuned for insight. For one, I hope to uncover the vineyard gems that supply the best value Pinot Noirs in the valley. I, like many of you, spend most of my nights sipping wines in the $10-$20 price range. The Willamette Valley, however, only seems to deliver $20-$60 Pinot. How can we reconcile this dilemma?

Pinot Noir hanging in Lichtenwalter Vineyard in the Ribbon Ridge AVA

Pinot Noir hanging in Lichtenwalter Vineyard in the Ribbon Ridge AVA

Nearly half of Oregon producers purchase all of their fruitº from independent vineyards or significant estate vineyards owned by others. These wineries do not own vines, and as a consequence pay the market prices for their fruit. Pay $1600 per ton for your Pinot Noir, and you will get your $15 bottle from the Willamette Valley. Unfortunately, it will taste like it too, as these vineyards often rest on the flat lands outside of the blessed zones for primo Pinot Noir. Pay $3000 per ton for your Pinot, and you will start producing wines that sing. . . and you will charge $30 per bottle to cover the cost. Many have touted, “Great wine is made in the vineyard.” This is a truth, and as a consequence winemakers pay for quality wine. There are no short cuts.

Unless. Unless the producer owns an estate. Those who own a vineyard and make wine from it have unique opportunities, especially when they have owned portions of their vineyards long enough to bury the loan notes. Through ownership, they have fixed their costs for fruit*. If this estate is on ideal vineyard land, and if the owner and winemaker value producing value, and if they have volume enough to sustain a business**, and if they do not build a lavish, over-the-top winery and tasting room, then they could possibly produce memorable $18 Pinot Noir in the Willamette Valley. This estate likely needs to be outside the sexiest AVAs, or the allure of that name will tempt the hands in control to charge the prices they can command. Importantly, the $18 bottle will only be one of many wines offered by this winery, and the rest will fall into the $25-$60 price range to support a balanced ledger.

The odds of the stars aligning for you, the hopeful consumer? Minimal. Reality leaves me craving $15 Willamette Valley Pinot Noir that inspires, and thankful I receive industry discounts. Quality cannot come from wine cellar magic. “You can make a bad wine out of great fruit, but you cannot make a great wine out of bad fruit.” For the $10-$20 seekers of quality Willamette Valley Pinot Noir, a handful of producers do compassionately craft affordable, insightful Pinot. Ultimately, though, the economic winds of this challenging varietal blow, like a February gale, against us.

 

*Fixed cost is not 100% literal here. Tax payments will rise as land values increase, and labor costs for tending the vines will increase over time. However, you purchased the land at a set price, and you have locked in that value.

**5 acres of Pinot Noir will not allow you to produce $15-$20 Pinot Noir of quality if you want to sustain a livelihood, rather than take a vow of poverty (very few fit this bill).

ºhttp://industry.oregonwine.org/wp-content/uploads/Final-2014-Oregon-Vineyard-and-Winery-Report.pdf

Price Matters: Important Words from Giorgia Casadio

“You must know the price. Ask! You are professionals!” Giorgia Casadio began to preach her gospel. Too many wine professionals had come to her table, tasted her wine, and failed to inquire about the price of each bottle. A group of Wine Bloggers Conference attendees shifted, alert on the chairs and bed corners of a fellow blogger’s hotel room. “I recently tasted a Cabernet in Napa Valley. It cost $140 a bottle. In Italy, it’s understood that it’s easy to make excellent wine when it costs $140. Judge a winery based on its table wine, its $15 bottle. That is the truest test.”

Amen.

Expensive wine deserves respect, and if worthy of the price, it can penetrate your psyche for years to come. However, with a high price comes the unique opportunity for the winegrower to coddle the vines and juice endlessly to massage them into producing profound wine. Terroir also influences quality, and it too adds to the price tag—prime vine real estate commands fortunes. Some wine historians contend first and second growth Bordeaux* grew into their titles rather than earning them justly in 1855. Essentially, the chicken or egg debate applies, and world-class quality came second. The prices the “First Growth” designation allowed wineries to charge gave them the capital needed to produce stellar wine.

Flip the equation. What can a winery create for $10 a bottle? This depends on terroir, care, and commitment. Vineyard managers and winemakers must take the time and energy to weave through the tangles and nuances of their vineyards and varietals. Which corner of your vineyard will blend with another vineyard row a mile away to produce a wine better than the two parts? Which varietals will uniquely meld to enhance and elevate the finished wine? Will you care for the lesser locales within your vineyards with as much force and drive as the rest? Will you seek out the over-looked acres hiding on and beyond the edges of your AVA? I respect producers who care enough to ponder these questions and heed their call. These winemakers craft memorable wine for the common man. Amen, Giorgia.

Tuscan vineyards

The vineyards of Villa Trasqua in Tuscany

Giorgia attended the 2015 Wine Bloggers Conference to share her wines from Villa Trasqua. Her Tuscan winery deserves respect at every price point, which speaks to Giorgia’s truth. Seek value. Does the wine rise above others at the price point? Thankfully you can find her valuable wines in 14 states, including Washington and Oregon.

2013 Traluna Toscana Rosso ($13): Red fruited with a pinch of baking spices. Mostly Sangiovese with a bit of Alicante Bouschet, this table wine currently strikes me as a bit discordant. However, age will certainly allow it to meld (age-worthiness quickly became a theme when tasting through a line up of Villa Trasqua wines). 13% abv. Good (will likely move to “delightful” with age).

2009 Fanatico Chianti Classico Reserva ($25): 100% Sangiovese, this Reserva resonated purity. Rustic, sexy, honest, age-worthy, memorable—a benchmark wine. Stellar.

2008 Trasolo ($120): Made with 100% Merlot, round, dark fruit produces a lush depth. Aged in new French oak, the fruit stands up proudly against its force. Italian-style shows through this historically French grape. Surprising. Excellent.

*The 1855 Classification System solidified a hierarchy amongst the wineries of Bordeaux. First growth estates, the top-tier, only number 5. The list goes from first to fifth growth, though the large majority of wineries in Bordeaux exist outside this classification system.

Unscientific Reflections from a Millennial Wine Writer

As a wine writer, reader, and consumer, I hear a lot about the significance of the Millennial Generation on both the current and future wine trade. Millennials in the United States have taken to wine at a younger age than previous generations–my personal experience concurs. Projections suggest we, Millennials, will continue to play a substantial role in the evolving wine world. Therefore, I posit a few reflections as a Millennial wine enthusiast and writer.

I was born in 1984, placing me on the mature end of the Millennial Generation. During the thirty-one years of my life, the wine industry witnessed a brief decline, followed by a boom sparked by the easy money of the ’90s and an evolving American palate (over-simplification noted). Since the early ’90s, Americans have doubled their consumption of wine (1).

Today, most of my friends and acquaintances fall into the middle and upper-middle class, and nearly all drink wine (only three of us work in the industry). Weekday gatherings, summer celebrations, and special events typically involve wine alongside craft beer. Male-centric events will often go without wine. Conversely, events including more women frequently have a higher proportion of wine served. When my friends and I buy wine, we seek value–quality for the dollars we spend–and rarely spend above $15-$20. $20+ bottles stay in the cellar (basement–let’s be real) for special events. My peers fortunately fall in the rare minority by making it into the upper-middle class. However, this has come with significant debt burdens that accompany master’s degrees and PhDs. We will continue to spend most our dollars in the $8-$15 wine category for the next decade.

Any politically or sociologically aware person has learned of or experienced the effects of a dwindling middle-class. For Millennials, college debt sits at the center of our financial challenges. Skyrocketing college costs in conjunction with the shrinking middle-class should raise concern for the wine industry (as well as other industries). It bodes poorly for the future if trends continue. Wine spending is discretionary spending–first to go if when times get tougher. While the top 25% can sustain a wine industry, including boutique wineries, we should all hope for a broader and more robust economy. In other words, I can only imagine how vigorous the wine industry would be if the Millennial generation also lived the reality of a strong middle-class as we did in the 1950s (a decent graph to demo this point). Drink for thought.

Beyond price, when my friends and I buy wine, we seek authenticity, exploration, and a story–especially stories that display respect for the land. I seek out second label wines from small to mid-size wineries for these reasons. Large businesses make mass-market wines–good, drinkable, and forgettable. They often taste just like that other mass-market wine you drank last week. I have great respect for the mid-size winery that crafts distinctive second label wines. The Old World does a better job, unfortunately, of creating a diversity of wine styles, types, and flavors at lower price points, even within one wine region (the Loire Valley, for example). In addition, those who enjoy affordable, diverse Old World wines have recently benefited from a strong U.S. dollar, which has lowered the price tag on imports.When you add this up, no surprise that Millennials seek deals. Deals and steals often require middle-men (distributors) to get out of the picture. Naked Wine, Garagiste, and 90+ Cellars all exemplify a model that Millennials have supported and will continue to embrace (see previous post on buying wine). Distributors will continue to see their influence shrink. I shed no tears.Finally, expect more canned and boxed wine, as well as wine on tap (kegged wine). For the sake of the environment, convenience, and economy, Millennials appreciate these relatively new means of delivery. I embrace tradition with ambivalence. Wineries of the world, give me a story I can believe, grow grapes and craft wines of distinction, and speak to how your place expresses itself in your bottles. I will be there to savor and write about it.

An example from this millennial’s cellar

(1) Wine Institute

Buying Wine

All of us share the experience of buying wine. Wine purchasing can feel anxiety laden, laborious, or blissful. Wine knowledge can thankfully increase comfort and help move a buyer from anxiety to giddy-with-delight. Coming soon, wine literature must reads to increase your understanding. Today, however, let’s focus on where to buy your wine. Who can you trust? Where can you find good deals–value at all price points? 

Local Wine Shop
First and foremost, find a local shop that you can call “yours.” Ensure friendly, unpretentious, service-minded staff proudly work for this shop. Then make it your wine home. You may need to shop around to find the fit for you–the balance between competent, committed staff, fair pricing, and a solid repertoire of wines. Once done, share your personal tastes with the staff, and encourage them to both compliment and challenge your palate. When you do head to the shop, plan to buy a case. Nearly every shop worth its weight has a 15-20% case discount, which undoubtedly helps the ol’ pocket book. Go less often, if need be, but load up while there. 

Garagiste and Full Pull Wines
These two Seattle-based online wine retailers use email to introduce wine offers of the week (Full Pull) or day (Garagiste). Jon Rimmerman, founder of Garagiste, writes about his daily offerings loquaciously, which may delight or irritate you depending upon your preferences. However his writing strikes you, he has a knack for seeking out and offering small to medium production wines at reasonable to striking values. If you reside near Seattle, you can pick up your wine, no fee (true for Full Pull also). If you live afar, Garagiste ships for a reasonable fee, especially if you live relatively close to Washington. I especially respect Rimmerman’s appreciation of food-friendly, moderate alcohol wines. Additionally, he often gets his hands on older wines from winery cellars. Examples? 1874 Sisqueille Riversaltes (ignore the $500 price tag), or the more reasonable 2006 Yering Station Chardonnay I now have cellared in my basement. Garagiste also puts great emphasis on provenance. Your wine will be cellared from production to the moment it hits the trucks to head to your door, and then the shipments to your door will only go out fall and spring to ensure reasonable weather during transport. 

Full Pull sends out less frequent emails, and typically offers multiple wines per email. Their greatest strength? If you seek out the best Northwest wines, the bottles fought over tooth and nail, Full Pull may be the connection you are seeking. Gramercy and Leonetti? Check and check. They do offer international wines, but maintain a solid focus on Northwest wines of all prices. 

Both retailers do not require purchase quotas–you can read the emails for years and never buy wine.

Winery Wine Clubs
Generally speaking, wine clubs at wineries offer little financial benefit. You can find the wines more reasonably priced elsewhere, even with the member discount they advertise. If you live locally, however, winery club membership comes with benefits beyond the “discount” bottle pricing–free tastings, invitations to member only barrel tastings, cellar room dinners, etc. I recommend a winery wine club only for these additional benefits, or the access to limited production and hard to find wines. 

Unique Online Retailers
Anytime we, the consumers, can cut out the middlemen from our wine purchases, we get more for our money. Online retailers like Naked Wines and 90+ Cellars fill this niche. Naked Wines uses a cooperative model in which wine drinkers, like you or I, can become “Angel” investors and help support small to medium production winemakers through our investment. Winemakers receive a venue to sell their wines to a large market (one of the greatest challenges in the business), and Angel members receive 40-60% retail from a plethora of producers funded by Naked Wines. Like most cooperatives, you need not become an Angel member to buy wine, but you receive the best deals if you do. 

Born out of the Great Recession in 2009, 90+ Cellars began as a means for high-quality producers to sell their luxury wine, which challenged producers and retailers at the time. 90+ Cellars simply uses their unique label, rather than the wineries in-house label, then they agree to keep hush about the producer and source of the wine. With 90+ serving as the distributor and retailer, producers sell portions of their wine quite effortlessly. Consumers, on the other hand, receive these wines at a steep discount along with a promise that all wines have received 90+ scores from the major wine press. You will know the country, state, and AVA of your wine, but nothing more about the producer or vineyard. 

Just another night with the boys

If you are like me, you purchase wine from a variety of sources–different shops, wine clubs, and online retailers. Keep exploring–quality and value await in this ever and rapidly changing market.

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.

Wine Economics Part II: Varietals

The New World has successfully managed to bring the names of specific grapes (a.k.a. varietals) to the forefront of our minds. Most Old World wines did not traditionally include varietal labeling, opting instead for location specific labeling–Pauillac, Rioja, or Barolo, for example. While much of the Old World continues this original labeling strategy, today I will focus on the varietals within the bottles, regardless of location, and their effect on the bottle price. If you have not read Wine Economics Part I: The Land, partake now.

Pinot Noir and Riesling serve as wonderful varietal exemplars. Respectable examples of Pinot Noir typically start at twice the price of their Riesling counterparts. Why? Winemakers age Pinot Noir, like many reds, in oak barrels–typically French oak for Pinot. New oak barrels from reputed Coopers in France cost $800-3500 per barrel (each contains 300 bottles of wine). This simple reality has obvious consequences for the finished price of many red wines. Cheaper red wines (under $10) frequently use oak chips or staves to reduce the economic impact, but nearly all well-respected wineries continue to use oak barrels.



Once beyond this clear difference, we now must dig deeper. Pinot Noir has earned a unique and significant reputation as the Poet’s Grape, the Devil’s Grape, the Seductress. All allude to the ethereal quality of this grape, which not only presents itself in the glass, but also in the vineyard. Pinot has devastatingly thin-skin, which has unfortunately made many vineyard managers and winemakers bald before their time–you think the presidency is trying! The fickle nature of Pinot Noir requires laborious attention in the vineyard, and this attention costs money–more hands and eyes on the vines. 

Riesling, however, suffers not from these monetary drains (or from want. . . we will get there). Riesling’s crisp acidity and frequent sweetness (for the semi-sweet and sweet wine lovers) needs no oak to shine. Many consider Riesling the ultimate terroir wine, as it has a unique ability to show its place, and the lack of muddling oak contributes to this reputation. Equally important, Riesling is hardy (like Cabernet Sauvignon) in the field. While Pinot Noir needs to be watched for downy and powdery mildew thanks to its volatile attributes, Riesling will quietly go about its slow, steady business of ripening like a stalwart tortoise.

Riesling also suffers not from want. Perhaps the most under-appreciated wine, except by sommeliers*, Riesling still manages to sell moderately well. However, it does not have the reputation for allure or stateliness like Pinot Noir and Cabernet Sauvignon. This diminutive reputation results in deflated demand at the mid and high price points. My recommendation to those on a budget seeking exciting wines with a sense of place–drink Riesling. You will find excellent examples of the varietal at $15 versus $25-40 for Pinot Noir. This lesson extends beyond Riesling to all the other under-appreciated varietals of the world, especially the lesser-known local grapes of many Old World wine regions.

  • Douro, Portugal
  • Loire Valley, France
  • Veneto, Italy 

These three Old World regions produce exciting, unique wines that many have never tasted. Why? The lack of varietal name recognition plays one role. Have you heard of bastardo, tressallier, or glera? These grapes take the main stage in these regions (with others alongside). In short, drink more grapes (and from locales) you have not heard of before. With help from your friend–the local wine shop employee you know (remember, this is a must)–you will find wines that surprise and delight.

The counter-examples, inflated bottle prices, lay in wines where you find varietal reputation aligning with a respected location–Napa Valley Cabernet Sauvignon and Willamette Valley Pinot Noir, for example. Reputation carries great weight, and not only the reputation of the varietal. Next time, Wine Economics Part III: Reputation.

As mentioned in Part I, many simplifications exist in the information above. Economic factors certainly overlap and intertwine in a complex manner–vinification techniques, location, varietal reputation and costs, and reputation are a few of the forces at work. However, generalities are necessary to discuss the topic meaningfully, even if imperfectly. Today is an attempt to isolate the varietal’s economic impact.

*Sommelier = a wine professional, frequently working in reputable restaurants or wine businesses.

Wine Economics Part I: The Land

Why can I buy a solid, terroir-nuanced Cabernet Sauvignon from Washington for $18, while I can’t buy an equally alluring Pinot Noir from neighboring Oregon for under $30? Why the huge variety and volume of respectable Languedoc-Roussillon red blends (France) for under $15, while I can’t buy equally unadulterated* cabernet sauvignons for that price from California? These two scenarios only hint at the tip of the economic iceberg when it comes to wine. The price tag at our local wine shop reflects a complex web of factors leading to that ultimate number. I will devote a series of posts to the factors that weight price tags toward affordability or incomprehensibility.

Part I: The Land

Location, location, location–economically impactful in real estate, retail business, and wine. How can one Napa Valley Cabernet Sauvignon sell for $150, while another bottle from vines grown within eyesight sells for $18? Vineyard location plays a role (discussion of other factors in upcoming posts). The $18 bottle almost certainly originates from grapes grown on the flats at the bottom of the Napa Valley. Flat, fertile valley bottoms encourage abundant growth and yields, and frequently mediocre wine as a consequence. Hillsides, even gentle slopes, typically have more shallow, less fertile soil. Grapes stress in these soils, and as a consequence put more energy into the fruit for the propagation of the plant. Stressed vines produce better wine. Therefore, hillside vineyard sites cost more money in notable grape producing areas–Napa Valley, for instance. The steepest vineyard sites can also add additional expenses due to the relative inaccessibility and associated labor costs to maintain the vines. 

More broadly, land values fluctuate drastically because of other geographic factors. California and Washington’s Columbia Valley serve well as counter-examples. For those who have travelled the Columbia Valley AVA, it is a vast, sparsely populated desert. As a consequence, the value of vineyard land often costs pennies to the dollar in comparison to most California vineyards. Many California AVAs, on the other hand, exist near population centers. California has also received global praise for the production of fine wine for decades longer than Washington. Both of these factors drive land prices higher than similar vineyard sites in the Columbia Valley. The Columbia Valley, of course, has exceptions to the rule. Some sub-AVAs have garnered reputations that drive prices sky-high. Red Mountain, for instance, recently sold land at a competitive auction for a hefty price. Expect more Columbia Valley vineyard land to follow suit as Washington continues to gain international respect. Back in California, the Central Valley, well away from the moderate climate on the coast and the largest population centers, proves the exception in the state, but few grapes recognizable as important wine grapes grow here. Rather, this relatively inexpensive valley produces an abundance of teinturier grapes intended as additives to serve as an inexpensive filler for many, if not most, bottles under $20 from California (and around the world). Wine regulations in California, and most regulations nationally and globally, allow for 10-15% of the juice to come from varietals not listed on the bottle, which gives wineries the option to top off bottles with inexpensive filler. Up north, Washington wineries producing bottles under $12-15 likely use similar or identical additives made from teinturier, but the climate, in conjunction with inexpensive land, greatly reduces the need for additives in most years.

The Columbia Valley AVA. Note the vastness and lack of development in the background. Courtesy of Seven Hills Winery.





Land ownership can also give wineries an economic advantage. For instance, an upstart winery in Oregon, which recently purchased 40 acres of prime Pinot Noir growing real estate, now owes banks or investors for this purchase. This new winery will need to pass on the land expense in the final cost of the bottle (unless the owner cares naught for the economic viability of the winery itself, a scenario that plays itself out with surprising frequency–enter the “hobby winery”). Some wineries in the Old World have had the economic advantage of owning their land for hundreds of years. This allows them to either lower their price, giving them a competitive advantage, or provide additional revenue to invest as they see fit.

The land grapes grow upon exists within our global, competitive economy. As evidenced by the details above, many of the same factors that create disparities between home values significantly impact the cost of wines we purchase from our favorite wine shop. Location, for one, matters. 

Many simplifications exist in the information above. Economic factors certainly overlap and intertwine in a complex manner. For instance, not all low-lying vineyards produce bad wine. Proper vineyard management in low-lying vineyards can produce excellent wine. The soil also plays a substantial role. However, people seeking to produce bulk, value wine frequently choose cheaper land–the lowlands. Generalities are necessary to discuss the topic meaningfully, even if imperfectly.

Finally, excuse the long hiatus. An unexpected death in my family, in conjunction with the holiday season, postponed my writing ventures. 

Coming soon, Wine Economics Part II: Grape Varietals and their Economic Impact. Happy New Year!

*Unadulterated = limited technological and chemical manipulations e.g. additives (Mega Purple), spinning cones to reduce ABV (alcohol by volume), etc.