Understood, the conversation today is might there be any chance we are finally approaching that point?
I remember talking about this 20 years ago of course. But when a $50 wine increases 25% we now have a wine that’s $62. When a $200 wine increases the same we are all paying an extra $50 per. The scale is getting warped and only gets worse, unless as you say one is “filled with money”
Average ton price in Napa is nowhere near $50K/ton. That’s Beckstoffer-land and a few others perhaps, the average is around $8-9K. Some high pedigree ones from a few board favorites might be $13-18K.
Think about this though.
at $50K a ton (if it’s BTK fruit), that’s $500 retail (or how people math it out).
I would argue that the yields are probably lower, like 50 cases per ton. Russell Bevan once told me he’s getting something like 40 cases per ton too.
Prices are going up in Sonoma and Santa Cruz because well, they can stay just off pace with Napa and look like bargains.
I understand 50k is on the extreme, was just using that to set the max (although) you’ve shown how yields will affect that. Do you really mean 25 cases per ton though?
Adam gave us possibly a more normal range. Would that be correct for something like Vine Hill Ranch or equivalent?
Helpful insights from Roy Piper on wine production costs from a 2016 thread. I thought he made a newer video on his blog that was informative, but I failed to find it in a reasonable amount of time. Regardless, lots of good info in the 16 thread.
No, 50 cases per ton.
This isn’t really true; costs are relevant to setting a minimum price and what kind of return producers are able to get. Producers are not going to price wine at a loss, and not everyone in Napa is necessarily looking to make the same kind of financial return.
I think he was referring to the secondary market, which in that case, it would be true.
You are correct for primary market. People can set their prices how they like.
I think he was referring to the primary market, in terms of setting the price. Of course in the secondary market inputs aren’t relevant, though there are estates that will buy wines at auctions to maintain the price of the wines - the notion of a market clearing price for high end wines is, I think, slightly fanciful (and subject to the Heisenberg effect).
Article from 2016 but fantastic insight here.
Yes I think so, because he was responding to my cost of production scenario.
B-21 has 2019 Mondavi Reserve To Kalon at $179/b as we sit here in 2024 – 8.5 years after this article was published…
It’s more like 50 cases or so to a ton in barrel. Always some loss in bottling so can be a little less than that.
Let’s please understand something here though. Those wineries up in Napa that are getting only 40 cases per ton are most likely being incredibly selective with fruit at the sorting table and then incredibly selective at pressing, perhaps only taking the free run juice and either selling off or blending the harder press stuff into a less expensive wine. They may also be bleeding their juice on day two to concentrate the fruit more to develop the flavor profile there after. They easily could get more, but they’re choosing not to.
Some of this I truly believe is out of ‘dogma’ and perhaps systems set up to seemingly achieve the ‘best quality’ wine. That said, most ‘hard press’ stuff is not ‘bad’ at all and actually enhances mouthfeel. The days of hard press being unusable are gone based on gentler presses.
Also, from what I understand, some of these vineyards are actually producing at much higher yields than what we’re led to believe. I read some more recently, that part of To Kalon is double cordon pruned and producing way more than 2 tons/acre. Can anyone confirm or deny this?
This is not to justify the pricing, but just so everyone understands what might be a play here.
Oops, that was a typo!!! I’ll go edit.
That is the ‘other’ side of To-Kalon - the Mondavi side. This only applies to the 89 acres of Beckstoffer To-Kalon
Adam,
indeed the avg is around 8 but the fruit below 10 is gobbled up by most of the mass producers such as Constellation, Treasury etc. As you say, the vast majority of the wines above $100.00 are using fruit in the $12k+ per ton. I have been privy to plenty of fruit contracts (and negotiated some myself) and I can share the following -
Cabernet from Pritchard Hill - 22K MINIMUM most are 25K or more (i have only heard of 1 being 22k).
Cabernet from Mt Veeder - I don’t think you find fruit less than 10k a ton. I was sniffing around a vineyard for sale that was contracted to a well-known producer making great wines for 12k and the winemaker told me it was a steal.
Atlas Peak - North of 10K.
Howell Mtn - 15K min for good cabernet. can find closer to 10 but not the best fruit. Ecotone - north of $22K
Oakville West - nothing south of 15k.
I don’t think there is any Abreu, Beckstoffer, or Vine Hill Ranch-type fruit being sold for less than $30k and from what I have heard, they increased prices in 2023.
those are just a few examples. You can find some small growers in and around Oakville, Rutherford, and Saint Helena, Calistoga, Combsville, southern Napa (east side of the valley south of Napa college to hwy 12) sites that might let their fruit go for less than 10k but that is not the norm at all.
My original 60 calculation came from this answer to an online question by the winemaker at KJ
Here is his math if anybody is interested…
“How about: how many gallons in a ton of grapes? This varies depending on the condition of the grapes and how hard we squeeze them, but normally 140 – 180 gallons per ton is to be expected. I use 160 gals / ton for most calculations.
The next logical question is: how many cases of wine in a ton? Using 160 gallons, and the conversion factor we use for a 12 x 750 mL case (2.37753 gals / case), you would get 67 cases per ton. In reality, we expect more like 60 cases per ton. This takes into account losses along the way. It accounts for everything from wine lost when racking, moving and filtering, or from the evaporation that occurs over time while aging in the barrel. Some people call this the “angels share.”
How many bunches of grapes go into a bottle of wine? Again, we have to make some assumptions, but using the ¼ lb per bunch we set up above, we can estimate as follows:
Now what about barrels? How many vines would I have to farm to fill a barrel? Using the math derived above, we should expect 32 clusters on our representative Cabernet vine, at 0.25 lbs each that makes 8 lbs of grapes per vine. Our barrel holds 60 gallons, so 0.375 of a ton, or 750 lbs. Divided by 8 lbs per vine we get to about 94 vines to a barrel.”
Quick question - are all of these vineyards you mentioned at $10k+/ton being farmed to minimize yields - ie yields that are under 2 tons/acre? In most cases, are winemakers invoived with the farming decisions at those prices or do you need to ramp up tremendously from there? With vineyards like To Kalon, do you have any input into farming or is it all handled by Beckstoffer?
I’m really still trying to understand the economics here . . .
Cheers