A note to our community on the state of the wine market (Napa and others)

[J_Cangiano]

It was the grand vin, I picked up multiple 2015 mags for 250. 2014 was 149.

[Bryan.L]

I do agree with this statement if you’re talking a monetary investment. I look at wine as an investment in your own future pleasure.

This wasn’t exactly what I was getting at with the inflation comment. I just wanted to remind people who say “It was $50 in 96 now it’s over $100” that it’s mostly on-track with inflation.

[Albert_R]

A better example are the wines that were $50 in 2012 that are now $95 and those that were $95 that are now $250.

[P_a_u_l_Christensen]

@Albert_R

A better example are the wines that were $50 in 2012 that are now $95 and those that were $95 that are now $250.

Same same. $50 in the S&P500 in Jan 2012 is now worth $218. $95 is $526.

Invest your money and buy the wine when you think it’s ready to drink folks! You get much more for your dollar that way. The only exception, obviously, would be wine for which there isn’t a secondary market when it’s ready to drink. But do such wines exist?

[MChang]

@P_a_u_l_Christensen

@Albert_R

A better example are the wines that were $50 in 2012 that are now $95 and those that were $95 that are now $250.

Same same. $50 in the S&P500 in Jan 2012 is now worth $218. $95 is $526.

Invest your money and buy the wine when you think it’s ready to drink folks! You get much more for your dollar that way. The only exception, obviously, would be wine for which there isn’t a secondary market when it’s ready to drink. But do such wines exist?

DRC is like 10x what it was in 2012 now… the very top allocated wines have outperformed the s&p 500 handily.

[James_Mc]

To be fair - RM has shipping included in their cab prices. They charge shipping separately for pinot and chard.

[P_a_u_l_Christensen]

@MChang

DRC is like 10x what it was in 2012 now…

Well OK, but I mean normal wine that normal people drink, without paying the really stupid willy-waving premium for “trophy” wines.

[MChang]

@P_a_u_l_Christensen

@MChang

DRC is like 10x what it was in 2012 now…

Well OK, but I mean normal wine that normal people drink, without paying the really stupid willy-waving premium for “trophy” wines.

Yeah no one is buying everyday wines and expecting them to appreciate in price. The top wines have appreciated a lot. In 2012 MG grand crus were <$100.

[Albert_R]

Agree, although this example covers several Napa Board darlings not just RM. They are actually the last ones I purchased from the group.

[P_a_u_l_Christensen]

@MChang

Yeah no one is buying everyday wines and expecting them to appreciate in price. The top wines have appreciated a lot. In 2012 MG grand crus were <$100.

There’s a huge range between “everyday” wines and DRC! For me (and I suspect 99%+ of people) everyday wines are under US$50 at retail. Maybe this isn’t true in the USA where you have USA wine prices, but in Europe and the rest of the world it definitely is. Specials might be US$100-200. Anything over that is the preseve of a tiny, tiny subset of the wine-drinking commmunity who are in the richest 0.01% of the world.

[MChang]

@P_a_u_l_Christensen

@MChang

Yeah no one is buying everyday wines and expecting them to appreciate in price. The top wines have appreciated a lot. In 2012 MG grand crus were <$100.

There’s a huge range between “everyday” wines and DRC! For me (and I suspect 99%+ of people) everyday wines are under US$50 at retail. Maybe this isn’t true in the USA where you have USA wine prices, but in Europe and the rest of the world it definitely is. Specials might be US$100-200. Anything over that is the preseve of a tiny, tiny subset of the wine-drinking commmunity who are in the richest 0.01% of the world.

That’s certainly not true on this forum. I wouldn’t be making blanket statements like wine not being good for investment in general; it might be true for stuff like Bordeaux and random everyday wines but it certainly isn’t true for top burgundy and likely other regions like the northern rhone (and possibly other areas like the loire and Germany)

[P_a_u_l_Christensen]

@MChang

I wouldn’t be making blanket statements like wine not being good for investment in general

I’m quite happy to. Can you show me any blended index of wine returns that shows better than the S&P over the medium term? Of course if you pick the right wine whose PR people then hit the spot and manage to drive the price up you can do better. But you can find individual stocks that did better (BYD and nVidia have done far far better than any wine over the last 20 years). And let’s be clear, above a certain level (which is my view in about US$100 for non-US wines) the “value” or quality of any wine is purely subjective and massively influenced by PR efforts, social media, etc etc. Once you get to that level all wines are objectively equally good. It’s all about subjective perception (and willy-waving in front of your friends and acquaintances, at which my feeling from your posts here is that you are an expert).

[G_D_y_e_r]

@J_Rock

While I hope wineries do well and I don’t want any to fail, I don’t really have any sympathy for wineries who can’t thrive or sustain selling $[300]+ bottles of Napa Cab, especially in instances where the wines aren’t positively differentiated vs. the competition and/or when there are other vintages of the otherwise same exact wine for much less money on the secondary market. Wineries aren’t non-profits to which we donate, it’s up to them to earn our business and convince us to part with our hard-earned money, especially when we also are experiencing rising costs.

Unfortunately, many producers are/were targeting the same narrow market (wealthy buyers for whom cost is not a barrier), and have been manipulating supply under their flagship labels to align their target price to very limited demand. Production choices also often seem not to be cost-conscious.

The path forward won’t be easy, but there are choices that can be made:

• Don’t overspend on (name brand) purchased fruit or vineyard land
• Reduce use (and purchase) of new oak
• Don’t hire the most expensive (name brand) consulting winemaker
• Accept somewhat higher yields where vineyards are healthy and/or when sorting fruit
• Move on from vineyards that aren’t suited to Cabernet, and require expensive, non-sustainable farming techniques (e.g. misters because it’s too damn hot) to produce
• Don’t pass the cost of lifestyle (e.g. Tuscan style villa estate, caves, etc.) onto the customer

There’s a lot of overhead that just hasn’t been well managed, in the interest of making relatively small volumes of rigorously curated wine.

It’s achievable to produce excellent Syrah (many places), Nebbiolo (Piedmont) or even Bordeaux varieties (from Bordeaux) under $100 per bottle. Yet Napa has structured itself where literal bulk wine like Caymus (“bottled by” is its designation) starts at $100, and it’s generally well above that mark where Cabernet is produced with any serious intent. I suspect for producers who can manage their costs, this pricing is mostly opportunistic to capitalize on the bubble.

[TGigante]

@G_D_y_e_r

Yet Napa has structured itself where literal bulk wine like Caymus (“bottled by” is its designation) starts at $100,

Can’t really take your post seriously with this type of misinformation.

Caymus Napa flagship can be had for $70 and the California bulk juice is $40.

[Edw3rdO]

I guess my point earlier was that some wineries expect you to buy widely distributed wines from them at the retail price and pay high shipping to earn enough loyalty access to their DTC allocations which are not available at retail. That frustrates me.

[TGigante]

@Edw3rdO

I guess my point earlier was that some wineries expect you to buy widely distributed wines from them at the retail price and pay high shipping to earn enough loyalty access to their DTC allocations which are not available at retail. That frustrates me.

Which wineries? Im not sure how prevalent that is.
Ridge to get the Monte Bello?

[Nate_Simon]

@Edw3rdO

some wineries expect you to buy widely distributed wines from them at the retail price and pay high shipping to earn enough loyalty access to their DTC allocations

So don’t buy them.

[Rahsaan_M]

@P_a_u_l_Christensen

… everyday wines are under US$50 at retail.

Everyday wines are only $50 for rich people (which is pretty much everyone on this board). If that becomes the benchmark then the industry will collapse.

[G_D_y_e_r]

@TGigante

Can’t really take your post seriously with this type of misinformation.

Caymus Napa flagship can be had for $70 and the California bulk juice is $40.

My mistake, only $70 for bulk Cabernet Napa appellation level wine. What a stunning value . . . .

Even the negotiant Bourgogne appellation bottlings from Latour and Jadot are under $30, from the priciest region in the world, Burgundy, no less.

Despite Caymus’ wild success, they certainly are one of the leading indicators of the problem Napa is facing. Entry level wine is priced as ultra-premium/luxury goods, and true ultra-premium/luxury wine is priced as a singularity in the wine-cuisine continuum.

[TGigante]

@G_D_y_e_r

Despite Caymus’ wild success, they certainly are one of the leading indicators of the problem Napa is facing. Entry level wine is priced as ultra-premium/luxury goods, and true ultra-premium/luxury wine is priced as a singularity in the wine-cuisine continuum.

What about Caymus Vineyard Napa grapes is entry level? Do they blend cheaper Napa cab fruit in, or do they add 25% cheap blending grapes.

Now $40 for a Cali cab bottled by, with who knows what in it. That I’ll give you. But that’s an uneducated consumer who would pay that tariff. Wagner just exploits it to maximize profit from wanna be’s. .