It's Structural. Get Over It

Why so much wine discussion is wasted breath
Aug 7, 2012

Have you ever noticed how so many wine folks get so worked up about the same issues? And how some of those issues—I'm tempted to say most of them—never change despite all the huffing and puffing?

I'll give you an example. For as long as I can remember, everybody—and I emphatically include myself among them—has complained about high wine prices in restaurants. We've wrung our hands, cried our eyes out, raised our voices unto the heavens and what happened? Well, you know what happened. Nothing. Wine prices in restaurants are as high today as ever.

The reason is as simple as it is unyielding: It's structural. Ask any restaurateur and he or she will tell you that the majority of their profits come from alcohol. To mix a metaphor, alcohol is the meat and potatoes of the restaurant business. It's structural. And because of that, it's not going to change.

Now, you or I may not like it. Hell, we most certainly do not like it. But what we like or don't like is pretty much beside the point. The juggernaut will keep rolling.

So I ask you: Why do we bother worrying the this or that bone over a certain number of structural realities that are exceedingly unlikely to change anytime soon, if ever. For example:

In California It's Cabernet, Chardonnay and, Most Recently, Pinot Noir that Rule—Do you really think that higher-priced California wine will, on the broad scale, ever budge from the Cabernet/Chardonnay paradigm?

I remember when, 20 years ago, my first book on California wine was published. I devoted an entire chapter, called "The Price of Success," to answer the question: "Why do Chardonnay and Cabernet Sauvignon account for more than half of all the 1990 vineyard acreage in Napa County (56 percent) and Sonoma County (53 percent)?"

The short answer was—and still is—"They are the fine wines the public wants. More telling though, is that these are the only two wines—except for sparkling wines—for which the public is willing to pay a premium."

Twelve years later, in 2004, I came out with a second book on California wine. Again, I asked the same question. And again my research came up with this:

"If you’ve got high-priced land, grapegrowers and winemakers have little choice: They have to produce grapes that command a premium. This still means Cabernet and Chardonnay, at least in the aggregate. The only two grape varieties gaining on the Cabernet-Chardonnay axis are Pinot Noir and Syrah. While Pinot Noir can fetch a comparably high price, its yields (for top quality) are less that of comparably good quality Cabernet Sauvignon. So economically it’s not an ideal contender. Besides, it’s extremely site-finicky."

(Of course, I was wrong about Syrah, but hey, back in 2002 Syrah looked like it stood a real chance.)

All of this is a long-winded way of saying that the dominance of Cabernet Sauvignon, Chardonnay and—the Great Newcomer—Pinot Noir is a structural reality. It's rooted, literally and figuratively, in high-priced land. And those are the only varieties, at least in any sizable way, that command a premium in California. It's structural. Period.

The Highest Across-the-Board Prices Go to Places with "Pinnacle Wines"—I've long had a theory about what I call "pinnacle wines" which is, I believe, a structural thing.

A “pinnacle wine” is one that commands an outrageous price and achieves outsize fame and respect. It occupies an acknowledged peak of a pyramid, never mind how limited the actual supply.

For example, Cabernet Sauvignon has its Bordeaux first-growths and cult Cabernets in Napa Valley. Chardonnay has, in Burgundy, Montrachet and five other grands crus—and seven more if you toss in the grands crus of Chablis. Pinot Noir has the fabled Romanée-Conti and plenty of other, nearly as famous, grands crus for company.

Brunello di Montalcino commands a remarkably high price bestowed upon hundreds of producers thanks to the original, near-mythic, status and original high price of just one wine, the ur-Brunello of the producer Biondi-Santi, which single-handedly created the wine called Brunello.

And can anyone doubt that the price and performance of Barbaresco wines was just as single-handedly catapulted by the pinnacle price and performance of Angelo Gaja's Barbaresco wines?

“Pinnacle wines” serve two purposes. First, they set a price cascade, creating the classic sales pitch: “If Château Lafite-Rothschild gets $1,000, my wine is a steal at $300”.

Second, “pinnacle wines” validate quality. Recognized as unquestionably great, they confirm a grape’s or a district's intrinsic quality. Without pinnacle wines, districts or even grape varieties too often get confined to a price ghetto and an unfashionable image from which they cannot easily escape. Think of Chianti. Or imagine the difference if Sonoma County had cult Cabernets.

The structural advantages of pinnacle wines is undeniable. Whether they're essential is open to discussion. But can anyone doubt that they sure do help raise the local tide?

Only Scores Move the Market—This is one that many of you don't want to hear. Too bad. Whether you like it or not—and, yeah, I know some of you sure don't—it's a structural reality: Scores move the market.

Now, you may choose to doubt my impression on this matter. But you don't have to take my word for it. Ask any retailer you know. Or wine distributor. Or importer. Or winery owner. They'll all tell you the same thing: It's scores—high scores, of course—that move the market.

Having said this, it's important to amplify this assertion with a few critical prerequisites. First, the score needs to be on a 100-point scale. Put simply, it's the one that works, the one that seems to be most intuitive. Second, it's not enough for just anyone to issue a score. There must be real credibility. And that's very hard-won and long-term.

Third—and not least—there must be reach. To move a market you need to address a substantial audience. That audience can be narrowly focused, such as for one or another category or type of wine. Or it can be more general. But either way, you've got to reach pretty much all of your intended audience. Call it the "killer app" element, if you like.

That noted, I think one can fairly say that 100-point scores are now structural. Everywhere you turn, in every winegrowing nation, everyone now uses such scores. That tells you something right there, n'est-ce pas? (And, yup, the French now use scores too. And so, too, do the traditionalist Brits.)

Scores work. When allied to the essential motive forces of credibility and reach they move the market. The 100-point score is arguably the newest, and most powerful, structural reality of the modern wine era.


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