$175+ is the new $125 in Napa, will market support ?

Just a few years ago, say 2 or 3 it seemed that $125-$150 got you most of the best cab vineyards below the ultra premium class such as your Bond’s, Colgin’s etc. So in that $125 + range you had Roy Piper, the better Mike Smith wines like Myriad BTK’s, Hopper etc. Now those same wine are $175, Carter, Roy Piper, New Becklyn Hopper etc. even new wines are in that $175+ such as WS GIII cab, Kinsman etc.

Now i know the arguments that costs have gone up in Napa, grapes are up, labour is up etc but that’s a 40% jump in 3 years or so pretty sure most people are not earning 40% more than 3 years ago. So will the market support this amount of expensive cab ? now you are looking at well over $1000 for a 6 pack and that is hard to do for more than a couple of releases a year.

I feel there is a market adjustment coming

The next level below the “ultra premium” has not been in the $125 range for at least 5 years. I just checked three of them that I order a case from and none were $125 in 2013: Spottswoode ($185), Continuum ($225), and VHR ($185). Spottswoode is now $210 and the others are $225. Running a bit ahead of inflation but not by much and probably not at all unusual for wine. Look at Bordeaux in the same time frame and I think you will see larger increases. And definitely don’t look at Burgundy.

You mention Roy Piper, but his wine is only 7 vintages old and is small production that mostly sells out. Hard make generalizations about the market when we are talking hundreds of cases.

As far as new wines always being $175+? I’m not sure that is the case either. Look at William & Mary’s debut last year for example.

The wine is better than ever. Waiting lists are much shorter, but they still seem to be relatively full. The wineries seem to have a good handle on supply and demand.

My wife and I earn healthy incomes, even by California standards, and I still find it very hard to buy any wine pushing $100. I know “value” is based on personal, subjective standards, but when do diminishing returns set in!!! I can drink a wine for $50, I enjoy it, I’m not likely to love a wine for $75 that much more to justify the added cost. I’m not even touching Napa cabs for this very reason.

Such high-priced wines pair with sheep.

Yeeep, definitely has changed my Cali (specifically Napa) buying habits. We are down to 3 wines that we buy at over $100 (Tynan, MACDONALD and Maybach) with most of the rest falling in the $50ish range.

[winner.gif]

I’m largely out at $175/btl.

simply put, if you don’t like it, don’t pay it. bitching and moaning isn’t going to make them drop their price… put up or shut up.

I like these wines (Cali cab) but indeed as the prices push out of my comfort zone, I find myself returning to Bordeaux for Cabernet based wines I choose to afford. It’s a big world of wine.

I had this exact conversation yesterday with a colleague and fellow wine lover.

My thought is that the recession is setting in (I would argue it started in December but due to the Fed 180 it was masked over by the miraculous V bottom in risk assets) and that there will be much pain over the next several years.

While fine wine is an inelastic good to some degree, everyone has their pain threshold. As evidenced by the first couple posts on this thread, people are much more selective about their buying, and this in a still relatively good economy. Fast forward two years when unemployment is up, incomes are hurt by rising inflation, and most people are shoring up their finances and I think that a large percentage of the $175+ per bottle crowd will be in tough shape.

Other than the labels with deeeep pockets, there will be a massive increase in ‘Mom and pops’ selling out to the Constellations of the world.

In my opinion it will take most of Napa too long to realize the new reality and they will lose customers. No more price increases but perhaps price freezes but it still won’t matter. In hindsight, Fred Schrader and Colgin and even Heitz from last year may have timed their exits perfectly…

#WinterInNapaIsComing

If they can get it, the market will support it. There is no clear ceiling at this point. However winemakers should keep in mind that the international market may be significantly impacted by the tariff wars. [stirthepothal.gif]

Sure, why not? Americans are making boatloads of cash right now, and - being filthy rich - can buy whatever they want at any price asked. champagne.gif

How are expensive California wines selling at Binnys? Isn’t that the test?

Sheeple

Stopped buying new Napa vintages long ago and now just pick up the classics via auction. Mondavi Reserve, Dunn, Montelena, Anderson Conn V Reserve, Spottswoode are all easily available at way less than the current vintage prices, and they are already aged so I don’t have to store them for 10 years+ (although I know most new producers make the wines in a style that can be drunk younger than that).

I do notice a significant difference in the $175 wines vs the $75 wines so I still buy both. It does get to a point of diminishing returns though. Some brands sell out at that price point almost immediately and some have wine sit on shelves. I haven’t seen anyone drop pricing too much so it doesn’t seem to be affecting business enough to force change.

They are not, talking with store managers at Binnys they are planning to further reduce the wine section footprint across the stores. Across Chicagoland Binny’s are observing a steady decline in wine sales with a bias towards the higher values. For example in my surburban Binnys they have Bond, Bryant, SQN, Colgin etc on the shelves and just not moving. The wine section will be downsized in favor of craft beer and spirits ( especially bourbon ) which are booming and they just cant keep in stock in large enough volumes.

James

So your method is to just let the wineries increase 20% a year and never say anything ? seems like a cop out

You don’t need to say anything. You simply don’t buy the bottles. This is called the Invisible Hand of the Marketplace. Works like magic.

So, I should call up winery X and tell them that their price hike for 2017 is out of line and I should expect them to drop it? How about calling up BMW and bitch about the 6 Series pricing?

Let them price as they see fit and if that doesn’t fit with YOUR buying strategy, then drop them. For me, I have passed (or let others take my allocations) on several wineries now that have broken my threshold price. I bit on Kinsman, but I really feel that is my last $200 bottle of wine for the foreseeable future with 2008 Champagnes being the exception.

I am happy to drink all the big guns that my local friends continue to buy in quantity as they make 10X what I do. I cook the beef and they pour the wine. Seems like a fair and equitable trade all the way around.