Some thoughts on premium pinot pricing

WINE TALK
21

I recently talked (in the last year) to a producer that let me know the cost of his (TCA FREE) magnum and 3L corks (magnum cork was $13 the 3L cork was $22). When I saw that the price of the TCA free corks cost that much…the cost increase of the magnums finally made sense to me…and I finally stopped having a problem with the mark-up.

As for the constantly raising costs…it’s a premium market. The best wines will likely continue to increase in price due to the demand. However, if I were a winery I’d want to try to find a way to reward my long-time supporters. The quest for profit is at the heart of every business…but a great business values their long-standing customers or relationships.

22

True. Larry, I suspect you might have to work harder to keep your costs under control and/or offer better quality to warrant slightly higher prices vs. the competition.

Pricing for a fair number of Burgs has gone nuts. Middleman/retail gouging? Supply and demand? It doesn’t matter, the result is the same. The good news is that bargain hunting is still possible, although increasingly difficult.

US producers seem to like $100+ offerings because it shows they’re making Pinots at the high end of the market. There are boatloads of lower priced options, that are often as good or better…IMHO. Plenty of outstanding < $50 in Oregon, and I’m sure there’s no shortage in Cali too. Pay $100+ if you must. I’ve never spent over $75 for a domestic Pinot (having purchased a few) and don’t plan to start now.

RT

23

Lots of random thoughts, some as a producer and some as a consumer:

  1. As a producer it is an interesting time for substantial abd “watershed” (the word used by Mike) price increases. There is a lot of 2012 Pinot Noir hitting the market. The price of “Bulk Market” Pinot Noir is declining per a number of brokerage reports (from 10 to 20% from the 2nd quarter of 2013 to the 3rd quarter). There’s going to be some good bulk-wine created Pinots out there. There is also going to be a good amount of well-known producer/well-known vineyard wines out there (witness the $25 K&L bottling from Bien Nacido Vineyard made by Au Bon Climat). Balancing that out, it seems that the overall economy is improving. Also, over the last few years grape pricing and other COGS pricing has increased without wineries really having the opportunity to take prices up correspondingly. The desire obviously exists to make up for some of this and take advantage of the economy while one can.

  2. As a consumer/producer, personally I’ve come to value a vineyard’s pedigree more…with some weight also on a producer’s history with that vineyard. So I am more likely to pay more for a Pisoni Vineyard Pinot Noir from Patz & Hall (for instance…they’ve been making Pinot from there since 1997) than I am from 3 year old vines. I’d pay somewhat more for John’s Rochioli Pinot Noir since the vineyard is well-established and I like John’s wines (balancing that out, however, is that a good bit of Rochioli was replanted so I don’t know the vine age of John’s section, and John hasn’t made wine from there before)…so that’s why I say somewhat more. I am less inclined to pay more for a wine from a new source, from younger vines, or from a new producer.

  3. As a producer, we haven’t found magnums to be that much more expensive to produce than two 750ml bottles. That being said, from my POV, I think we have more drinkers than collectors. I don’t believe that our customers care much about a heavier bottle, an etched or screen printed label, a wooden hinged box, and on and on. They are more about what is in the bottle and would rather have a price closer to 2x the 750ml price than the other accessories. I might be wrong, I’ve never tried it.

  4. As a consumer, I worry about wineries feeling like they have to “keep up with the Jones” and that there will become a perception that if you don’t make a $100 Pinot you aren’t really a high-quality producer or you don’t have the cache to sustain that. I want producers to make money and to stay in business (I’d really like to do that as well, as a producer), but there are so many things that go into establishing pricing that I’d hate for the “price equals quality” mentality that we all have in some respects to reach the $100 level.

  5. As a consumer, I personally don’t recall ever buying a $100 retail bottle of domestic Pinot Noir. I have with Burgundy, but that has almost always been as a gift or for some sort of special occasion. I’d certainly do the same with Domestic Pinot Noir. But those have all been unusual special purchases and not something planned and considered off a mailing list. That might be hard for me to do…just based on my own threshold.

Adam Lee
Siduri Wines

24

Man this threads begs for more blind tastings…

25

I find it curious that we have less than 2 dozen posts, and some of that is reply traffic by those already having posted, yet we have 1300 views. Don’t folks on this board have some passion around the pricing for CA pinot? [scratch.gif]

Adam, one thing about you, about Larry, in terms of wine pricing, you guys have been consistently fair and reasonable over the years that I have known you and your wines. Thank you both for following that philosophy, I recognize it and I hope others here do as well.

26

Most of the absolute best 1er crus along with many excellent grand crus, with change to spare.

27

Adam’s 4th point is a good one, and there are a lot of other fine observations on this thread.

Depending on how it’s priced down there, don’t forget about upper-end NZ Pinots which can be very, very good.

As a lover of Cali Pinot and Burgundy equally, I guess my observation is that the floor price for a good Cali Pinot has gotten closer to the floor price for a decent (i.e. Villages from good producer) Burg—I think the disparity in pricing at that end of things has diminished. That said, there are still no $600 Pinots from California—that I know of, anyway.

I haven’t paid $100 for a Cali Pinot yet, but I rarely pay that money for a red burg, either. If it was earth-shaking, as Frank alluded to earlier, attention-getting, I would consider it. My fave more or less continues to be Littorai and I still have no problem paying $75-90 for a bottle of Ted’s Pinot. I just don’t do it too often or by the case.

Mike, I’ve bought some terrific 2010 Cortons up here—where prices are crazy—for C$90 or so. You can still get value in Burg if you look a little bit.

Salud,

Mike

28

One of the interesting subplots that John brought up is how Napa Cabernet broke through the price celiing years ago and yet California Pinot remains somewhat restrained.

To me, this has a lot to do with perception trailing reality. The big push in California Pinot Noir is much more recent than that for Cab. There was this very influential wine critic in the 90s and early part of this century who was beating the drum for California cult cab. And there was a well publicized global event (Judgement of Paris).

Burgundy’s price escalation and the recent breakthroughs in more subtle, site-driven California Pinot are both factors pointing to greater acceptance of a higher price ceiling for the best California Pinot, IMO. I don’t like it, but I think it’s coming.

29

Thanks, Frank. I can’t rightly see pricing a wine of mine more than I’d be willing to pay for a wine of mine.

Adam Lee
Siduri Wines

30

Pricing can be “relative”, working off a lot of factors. But if value is what you are after, PN is not the place to go in search of it. Doesn’t really help you if that is what you like/want to drink. You just have to deal with it as best as you can.

31

I tend to agree, but there are still some silly values available in California appellation Pinots (Copain’s Tous, and River Marie’s Sonoma Coast come to mind immediately).

32

Mike, there aren’t many willing to admit to loving California Pinot and Burgundy equally! I’m also a lover of good Burgundy (althought I’m a hard-luck lover), but find myself in the middle of a fascinating resurgence here in California.

33

All very good stuff, Adam. This paragraph is particularly interesting, especially as it pertains to this thread. We have some producers defending, or at least explaining, the cost increase by saying that mags are significantly more expensive to produce and you are saying they aren’t. Or perhaps more accurately, they don’t have to be. Obviously, the boxes and etched bottles and the added BS are expensive, but I absolutely agree with you that we aren’t collectors, we’re consumers. I buy wine for one specific purpose: to enjoy it. This may come off as a strong statement, but all the added shit (that increases the cost significantly) comes off as almost arrogant. This bottle of wine is so nice it has to be in an etched bottle, a branded wood box, and of course it’s worth the premium.

As to Kirk’s story regarding the corks, Larry knows there’s an easy solution to that. Screw tops, baby! champagne.gif

34

I have been involved in a discussion on anotehr site where one of the participants has been pooh-poohing wines that cost less than $50. He has continually stated that one “has to pay for quality” as if price and quality are in an absolute linear relationship. Of course that is not true - not at all.

That out of the way, I do not like $100 price tags (or $99 price tags for that matter), yet will go there for a wine of quality and distinctiveness - Burgundy, California Pinot, Northern Rhone Syrah, etc.

The thing I continually struggle with is that there are a number of wineries out there that have held prices into the $40s that are equal in quality (to my taste) with wineries that price in the $60-$100 range. Sure the styles may be different, but I don’t see where the upcharge is justified. I’m still sticking wth a couple (not hard to guess who they are), but it hurts every time, and I’m not sure how long I will stay with it.

I never bought into the Napa Cab thing, so for me it’s a meaningless point.

35

A few thoughts on this:

  • The Copain mag-only offering sounds like it was such a limited wine that the only way they could release it was in such a way that most of their customers would not buy. If they had released it in 750s at a price similar to Kiser en Haut, it probably would have only generated a lot of pissed off loyal customers.

  • On the equivalency argument, if you want to say that wines of equivalent quality should be priced equivalently, then that’s fair I guess to say that the best CA producers should be in the stratosphere. However, stratospheric pricing moves wine out of something to drink and into something to collect. I find it sad to think that this would be the desired end game. Categories like this lose my interest very quickly.

  • Probably the comparison I hear most often made, and the yardstick I know people at Copain use to measure, is Rhys pricing. I think these may be the two best Pinots made in California, but I did a quick check of my purchases from both these producers, and Copain is more than double Rhys consistently and Rhys has been in steady decline as prices rise. If both these wineries price on par with high-end Burgs, then my purchases will follow the same equivalency.

  • To simply make this about me: It’s easy to see a wine like Combe de Gres and want it, but I have to ask myself with any offer like this, for what occasion would I open such a bottle? If I can’t find a good answer, then it’s best to pass. Steve Nordhoff’s description in the Copain thread, to store it away and pull it out in 20 years, is a very apt description of why I passed - it’s not so much the $250 as it is the feeling this bottle is so special it deserves 20 years of sleep. For me, it’s just too damn much riding on a single bottle.

36

2 or 3 years ago, $50/btl was about my upper limit for pinot of any kind (domestic or Burg). I have since nudged that line frequently enough that I’d have to say that $65 has become my new $50, but I still expect to really be impressed anywhere above $40, and I guess the fact that I have been is why I keep buying.

The tricky bit about how I buy wine like this (mailing list or otherwise) is that I’ve noticed, not so much consciously, that I will buy 2 bottles @ $50 whereas I would never put up the money to buy 2 at $65+. I’d obviously rather have 2 bottles of everything, but I’m more interesting in trying several wines than putting that much of my meager budget into 1 wine. Especially when nearly 100% of my mailing list purchases are previously untasted, save previous vintages.

Above $75, I agree with Adam L. that it really needs to be a wine of some pedigree (Rochioli West Block for example) before I will drop that kinda cash. When critic’s scores can’t be relied on regularly (and that seems to the be case), what else do you have to go on other than personal experience and pedigree.

37

Mike, I am trying to calibrate what you are saying. I know that you know Burgundy, so that your post gives me an opportunity to try to understand this thread. For me, the floor price of a very good or better Burg is around $40 or so that I pay for a Jadot or Bouchard Beaune premier cru or a premier cru from Savigny or Pernand Vergeleses from Chandon des Briailles or Dublere or someone like that. Although, I have had some really good cheaper Burgs (like Jouan Passtoutsgain for about $15-18), why don’t we do with $40 or so. Is this the price range you are thinking of and the types of wines you are thinking of?

Assuming that you are thinking of the same price and types of wines I am thinking of, what are the domestic wines that you think provide comparable value as these at comparable or lower prices. Again, I am asking you because I have some idea of your palate and feel like I can calibrate somewhat?

38

I pretty much just drink (and buy) PN & Chard (From France and CA).
Most of my bottles are Red Burgundy. I can count on one hand the bottles I’ve paid over $100 for.
There is PLENTY of fine Red Burgundy available under $100! (Even under $60) (Even under $40).

I’m buying very little White Burgundy at the moment due to the Pre-Mox situation.
Quite happy with Chards from Rhys, Ceritas, Mount Eden, Varner and Arcadian.

On the CA Pinot front, again, the same rules apply to my philosophy on Red Burgundy.
No need to cough up >$100 for any given bottle.
That said, the Rhys price increases have been rather abrupt in the last couple of years.
Since there are small allocations, it doesn’t bother me that much.
Hopefully these unique wines will age into something quite special.
But, IMO, Rhys would do well to stay under the century mark for a while and possibly hold their prices for a year or two.
(even though I’m sure they would still sell out).
I just think from a “customer appreciation” POV, that holding the line would be a good strategy.

TTT

39

Paul, I believe that the Skyline and Swan are at what … $95 or $99 now?

40

Well, up here Howard, we’re looking at $55 or so for those wines, but yes, the wines you speak of are what I was thinking of, or perhaps Villages-level Volnay or Chambolle even, for a touch more.

You ask a tough question, but for me, in that type of price range, I have very much enjoyed wines from Kutch, Sojourn, August West and Inman Family, to name 4 off the top of my head. Arcadian can be in that zipcode too (I’ve candidly never been patient enough to wait the length of time they really need). Even Holdredge makes the occasional decent wine at that price, I believe [grin.gif]. Adam’s Siduris are somewhere in there too, and I have enjoyed a few of those in the past. IIRC, those are all in the $45-60 range at the moment. I’m sure I’m forgetting some I should be thinking of! It’s then a step up to the Rivers-Marie SVDs, Small Vines, Williams-Selyem, Rochioli and Littorai of the world, which are at my “next cut” in terms of price and, only in some cases, quality—some of Jamie’s, Craig’s Ed’s and Kathleen’s wines have been superb, to match these 4 producers.

You do make a dangerous statement about me, though. Who can truly know Burgundy? [wow.gif]

The other very slight gloss I would hazardously add is that, at least for now for me, vintage can affect value a little more in Burgundy vis-à-vis which particular communes do well, to my personal tastes, in any particular vintage. As an example, I do think that 2010 was a fantastic year for Corton–a perhaps-sometimes-marginalized grand cru—they were terrific in barrel and what I’ve tasted, they’ve been terrific in bottle. OTOH, 09s seemed to work very well for Gevrey, MSD and even NSG, which I don’t tend to like as a general rule, but did like those I tried from that vintage. 07 Volnays seem to be turning into really nice wines.

I so far haven’t experienced quite that kind of markedness of variance in vintages from AVA to AVA in Cali…but that’s probably just a function of not tasting quite enough of them.

Hope this helps. Just be careful–I like my Cali Pinots for different reasons than I like my Burgundies.

Mike