The price is right?
Group-think may be keeping California’s prices too high
If I’ve learned one lesson from recommending thousands of bottles to readers, it’s this: Prices always make someone unhappy. If I complained about, oh, Sonoma Pinot Noirs surpassing $50 a bottle, I’d hear from winemakers insisting that was actually too cheap (pro tip: Never make this argument to a wine critic) but also from readers who thought $35 was too much. Let’s not even touch the readers whose price cap was $10.
California wine has a particular ability to push buttons when it comes to prices. Winemakers here seem to be caught in a group-think when it comes to cost. If all your neighbors charge $50, why shouldn’t you?
This is not a new problem. Starting in the early 1990s, many wine prices doubled and even tripled within the decade. I remember buying a $30 Grgich Hills Chardonnay in 1999 and being frustrated; the quality was fine, but not the price-quality ratio. It cost essentially double what I would pay for good Chablis. And Grgich was price-stable by ’90s standards; between 1992 and 1997, Caymus’ Yellow Label leaped from $25 to $70.
Even today, value remains a scarce commodity. And that’s cause to worry, because price is the one thing that could undo California’s current burst of popularity.
Just five years ago, vintners complained about the scarcity of homegrown wines on lists in San Francisco. Today, the situation is improved.
You can see that at 1760 in Polk Gulch, a restaurant very much devoted to the state’s wines. Yet of wines costing $15 or more per glass (excluding Champagne), 4 out of 6 are from California; of wines below $15, the ratio sinks to 1 out of 8. I always like 1760’s selections, and the prices aren’t unreasonable. But on price alone, I’d be hard pressed to choose California over something else.
There’s an argument that’s, basically, so what? Californians will pay more for their own wines. Even if that were so, what happens as you move farther from the state border? Ask professional wine buyers outside the state what their main holdup with California is, and taste is not the issue. Today, price is the sticking point.
It’s not that California doesn’t make cheaper wines. It’s that they’re almost entirely fodder for supermarkets. Boutique buyers today aren’t about to stock Liberty School or Geyser Peak for their lists or shelves — or even would-be premium labels like Meomi or Kendall-Jackson. It’s not 1992 anymore; shoppers know what bigbox looks like. And it’s hard to find wines that at least nod at artisanship for less than $20. Over the years, I’ve heard two main justifications for the price gap.
The first is that California’s quality is simply higher, that prices merely reflect what’s in the bottle. I’m thinking in particular of one Rutherford proprietor who made an impassioned (if ludicrous) case that his $220 Cabernet was a downright bargain compared to Bordeaux. True, maybe, if your shopping list starts and finishes with futures of Lafite-Rothschild — currently about $440. Even then, it’s a Marie Antoinette sort of comparison, because Bordeaux is currently strangling itself: overpricing its top wines while thousands of less famous properties languish.
That value notion becomes even harder to justify as you move down the price chain.
The second argument? It simply costs more to make wine in California, hence the higher prices.
This feels more genuine.Yes, making wine in California can be expensive. Vineyard land is unreasonably spendy, like any property in the state. And, yes, most European vineyards have been planted for decades, with less-frequent replantings. But California grape prices have reached nearly crazy levels — surpassing $30,000 per ton at the very top end. Which is why, when everyone bristled last year as grower Andy Beckstoffer set aggressive new prices on his To Kalon fruit, I couldn’t feign surprise. It was simply a reaction to the no-limits philosophy of wine prices.
California’s labor costs are often higher, too. (Although don’t underestimate the bureaucratic hell of European Union employment laws.)
Still, when I hear estimates from some winemakers about the break-even prices per bottle — $125 from one top Napa Cabernet producer — my patience wears thin. In the end, consumers don’t care.
That said, please don’t go away thinking California wineries are out to skim us. Too many vintners still scramble to make ends meet, especially young ones, assembling their wine dreams on the scraps of each paycheck. Starting a wine label is hard and expensive; the smaller the harder, because no economies of scale exist for the endless mundane details —compliance paperwork, label design — required of an 800-case winery.
And there’s actually one silver lining in today’s prices. Twenty years ago, many top California wines played a dangerous game with the supply-demand curve. Vintners engineered a sense of scarcity into their allocations and mailing lists; hence all those spiraling prices. While some of today’s most collectible new California wines — Arnot-Roberts and Wind Gap, to name two — deal with similarly small quantities and similar demand, they cost a fraction of what top wines cost in the past. At the moment, at least, California has bargains to offer for your cellar.
I’d like to interpret that as a sign that, in a modest way, California is learning to successfully wrangle the neuroses of its prestige.
But in the end, to stay competitive, the we’re-worth-more argument has to die. We need to look on shelves and see more table wines, made by talented winemakers, that we all can buy and drink on an everyday basis — made with the dignity and care that the state’s industrial wine lake never offers. We need more worthwhile glasses of wine in restaurants for less than $15.
Because, again, California has cleared its biggest hurdle: People once again love its wines. Wouldn’t it be a shame if that progress was halted because the people ready to be charmed decided it just wasn’t worth the money?
Price is the one thing that could undo California’s current burst of popularity.