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james laube's wine flights

Pricing Wine So Price Isn't the Focal Point

Photo by: Greg Gorman

Posted: Jul 30, 2009 4:46pm ET

Today I did what many people think I do everyday. I toured a vineyard—Tim Mondavi’s new property on Pritchard Hill—tasted all four of his Continuum wines and talked about what’s on most vintners' minds these days: the economic market and wine pricing.

Mondavi’s vineyard is the former Cloud View property on Pritchard Hill. It’s a chic, name-dropping neighborhood by any standards. You have to drive through Bryant Family Vineyard and Chappellet’s vineyards to access Mondavi’s property. And once there the 'hood includes the likes of Colgin, Ovid, David Arthur, Stagecoach and Dalla Valle.

Mondavi’s first two vintages, 2006 and 2005, have been exquisite. Both are rich, elegant, complex and layered. Barrel samples of 2007 and 2008 continue in the same vein. With 2009, Mondavi will begin to use more Pritchard Hill grapes in the wine—it’s a blend of 55 percent Cabernet, 30 percent Cabernet Franc and 15 percent Petite Verdot. Mondavi makes no secret of his fondness for both Cabernet Franc and the style of Dalla Valle’s Maya, a Cabernet Franc blend.

Eventually we talked about industry trends. A year ago we might have debated whether California Cabernets were too ripe and powerful. That phase seems to be waning a bit as more wineries are reining in ripeness.

But instead we spent some time talking about pricing, and Mondavi recalled the debate surrounding the first release of Opus One, the Robert Mondavi-Baron Philippe de Rothschild wine.

When the first two vintages, 1979 and 1980, were released in 1984, both wines were priced at $50, at the time the highest price for a California wine and high by any standards. Behind the scenes, the discussion among the proprietors was whether to charge $60, and price it higher than Bordeaux’s first-growths (Bordeaux pricing always varies a bit since the wines are initially sold as futures at discounted prices, before they are released).

Anyway, as Robert Mondavi began to weigh his options, his close advisors warned him that $50 would be high, but $60 would make the price the topic of conversation, rather than the quality of the wine.

It made me think. It’s a good point: When you’re considering a wine, price shouldn't be of greater consideration than quality.


 

Apj Powers
Dallas, TX —  July 31, 2009 2:47am ET
Wine and food are about nuances of flavor. It is really difficult to put a price on that nuance. A special wine transcends price. You remember it. (this, of course, has nothing to do with what the price actually is).
Scott Creasman
Atlanta, GA —  July 31, 2009 9:58am ET
Even if a ¿special wine transcends price,¿ which might be true to a degree (although almost everyone has a ceiling), isn't the point of JL's blog that winemakers like Tim Mondavi, especially in this economy, are concerned about the price point for wines like Continuum ($130 and $140 release prices). Is Continuum special enough so that consumers are going to spend over $1500 for a case? Most current surveys show a big pull-back in any retail price points over $50 (heck over $25). How many posts on this board have there been about people dropping off mailing lists or being able to get on mailing lists that were heretofore unimaginable? Tim Mondavi is right to carefully consider the pricing for Continuum.
Apj Powers
Dallas, TX —  August 1, 2009 1:55am ET
Scott-agreed. I mean, when I go to a trade tasting some wines are special. Not because of the price but Whatever the price. Low or high. I'm not in the high-rent income. I do think it is a huge mistake to lower a price by half to move product & then think you can raise it 6 months later to the original price. I could name several wines that were $50+ cost back in the early 2000s (doesn't that sound weird-early 2000s), they dropped the prices below $15 cost & now want to charge $50 again. It is the coupon theory. Now I'm waiting for the coupon. I'm not buying at $50. A slight discount is seen as an opportunity , but a firesale, to me, is a point of no return. Some high-end wines are not panicking, holding the line, these are probably small production wines that will sell out anyways. In the end, I hate that price doesn't reflect quality and new wineries slap the $90+ price on their 1st release.
Apj Powers
Dallas, TX —  August 1, 2009 2:06am ET
Ok-I'll monopolize this thread. I like the way Scarecrow handled their release. IMHO, a great example of a quality Cabernet. They set the 1st release at a high but palatable price. The wine got rave reviews from critics and more importantly from guests. It has a lot of history. Now the price edges up but not, so far, outrageously. And the vineyard has a pedigree. Not one of those 4-5 year old vineyard-$75-new-release. I really applaud Scarecrow for the pricing strategy and say their wines qualify them to price higher. (Now, can we get our 3 btl allocation increased, haha)
Michael Myette
Sacramento, CA USA —  August 1, 2009 5:57pm ET
Agree completely Jim. I definitely wrestle with this. Have some "bucket list" wines, but I have to admit that the price point likely transcends whatever experience or nuance a wine might give (read: Screaming Eagle, DRC La Tache, Chateau Petrus). At some point the price dominates, and these wines become little more than status symbols of the rich.
Jay J Cooke
Ripon CA —  August 2, 2009 6:58pm ET
A sign of the times? Our local Modesto Costco had at least 12 bottles of the 06 Caymus Special Select this morning at $99. It would be interesting to know where it came from, where it has been sitting & how it arrived in our 100+ degree weather.
Scott Creasman
Atlanta, GA —  August 3, 2009 11:28am ET
I agree with Apj that once who make a fire-sale type move, going back is next to impossible. It seems like the big struggle for wineries is finding that magic middle ground between not killing the brand just to raise cash (a reality for some) vs. pricing at a level that consumers will deem "fair" and actually buy. A collector friend of mine and I pulled some corks over the weekend, and the consensus was that while we are getting more offers on mailing lists, we were probably going to be careful about expanding our purchases (dropping some mailing lists to accept others). The next 18 months is going to be very interesting in seeing who survives.
Brad Paulsen
Saratoga, CA —  August 3, 2009 8:21pm ET
Jay you should pick up the Costco Caymus. I have never bought a bad bottle from my Costco and the new 2006 Caymus Special is no exception. My Costco had this and the new Dominus at the same $99 and both were great. I applaud Caymus' price move, they'll certainly get more future customers this way. On Continuum I agree that both vintages have been very very good. Sure I'd love to get it at a lower price but I agree that at least for now the price is not the discussion topic but instead the wine. I would say that it is at the upper end of the test case, especially in this market.
James Zalenka
Pittsburgh PA —  August 4, 2009 9:51am ET
One comment you made about California wines being "too ripe and powerful". I couldn't agree more and hope that trend does diminish into the future. I'm seeing many wines at 14.5 to 15% and that's for a cabernet! Some zinfandels and syrahs are approaching 16%! I've been buying mostly mostly from Italy and France. I would like to see WS show the alcohol content in their ratings.
Josh Woodward
Findlay, OH —  August 21, 2009 10:50am ET
Here's another vote for alcohol percentages in the WS reviews! You can tell so much about a wine from one little number. It's not the only factor, but it's probably the most important in my book.

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