The American Consumer Inflation....and Deflation
When it comes to fine wine, it is well understood that you have to pay for the quality that goes into the bottle. Expensive new oak barrels, top of the line winery equipment, drastically low yields in the vineyards, labor costs and all that precious time that the producer needs to age the wine (costing them money) is all reflective in the fine bottle's sticker shock. These particularly expensive wine making practices do not interest me nearly as much as the surrounding qualitative issues that cause our wine purchasing wallets to shrivel in fear. Internationally, fine wine regions have different types of buyers. It's impossible to cover every category of consumer, so I will generalize for the purposes of my search.
American's buying habits are generally on extreme ends of spectrum, torn between frigid frugality and the ludicrously lavish. The practical consumer jumps all over bargains and generally looks at wine as a beverage. Yellow tail aside, this customer will aimlessly wander the Costco isles for the killer sale while munching up countless free samples of popcorn chicken in the deli section. Then we have our proverbially dichotomous buyer that is caught in between the 'wine is a work of art' mantra and the view of wine as a status symbol. Two components of the modern wine world play right into the themes of our fellow American consumer, points and branding. The cheapie 10 bucks for 90 points rule is a perfect match for our wallet conscious beverage buyer (and tailor made for Marlborough sauvignon blanc). As for the Ferrari driving Park Avenue resident, Opus One has become the shiekest of matches. Who cares if the Spectator only gave the '02 86 points, Opus One is the best because they say so (and everybody knows it, of course)!
The branding and points themes are not only relegated to the New World (as more Wal-Mart shoppers are looking towards the Languedoc and Loire for value, and blue chip Bordeaux can give a first growths worth of branding beauty to the high finance consumer) and the 'American consumer' is actually a mold that several other entities fit snuggly into, (we can't forget about the well-to-do investment Asian speculator, or the everyday European that drinks wine w/ every meal) so please excuse my generalizing.....and please excuse my run-on sentence.
That leaves that ever so illusive 'middle-ground American consumer,' such as me, which I will get back to in a second. Now, back to pricing.
Pricing for high end California cabernet (including 'cult cabs') generally does not take the vintage variation into effect. Release prices will stay stable, or rise w/ the brand's increasing popularity, regardless of what mother nature had to offer that particular year. True wine connoisseurs are pissed off by this pricing scheme when a so-so vintage produces a 'very good' Caymus Special Selection for the same price as an 'outstanding' one, but the New World laws of supply and demand will leave plenty of brand chasers to scarf those mediocre bottles up regardless of the quality/price ratio. So why should they lower the price in an off year if they are still selling at a premium price point? Who cares who my customer is, as long as that customer exists, and has deep pockets of course? With the rising popularity of California pinot noir, pinotphiles (such as me) are fearful that the days of 30 dollar premium pinot are numbered thanks to those lovely rules of supply and demand. The 'pinot cache' has almost branded itself, regardless of the region or producer. Big thank you to the ‘Sideways effect’ lending California cab an overpriced companion on the lofty Napa pedestal. European pricing is far too vast and broad an issue to tackle in its entirety so I'll just briefly venture into a pair of French and Italian regions to try and make sense of this issue.
2005 Bordeaux has got just about everyone's panties in a bunch (not unlike '00 and '03) by asking for 4 figures plus per BOTTLE for a product that the customer won't even see until 2008! A wee bit crazy? Sure, but oh those speculators are still salivating over the promise that the price will continue to rise. More sure of an investment than in the Dow Jones, the Bordeaux futures parade is truly a unique bird. But this bird pays attention to vintage variation, thanks to the accountability they now have from the wine critic crowd. Prices for '04, an off vintage, were less than 40% that of the slothful '05s. While hype and critical acclaim fuel outrageous increases in the bottled 'works of art' (which, by the way, have centuries of track records to back up their claims of durable quality), more humble voices will softly speak of future price reductions on the upcoming sour vintage.
A sensible idea, right? A high quality vintage should call for prices to reflect an improved product in the bottle and vice versa. Especially for an area such as Bordeaux, or Burgundy for that matter, with much more fickle climates that produce greater variations in their wines from year to year as compared to the golden sunshine state of California.
Another controversial matter was that of 2002 Barolo and Barbaresco in Italy (the Piedmont region). Piedmont, which produces wines from nebbiolo (the king of Italian grapes), had strung together 6 stunning vintages until 2002, which rained cats and dogs for nearly the entire summer. With the dilution of '02, Piedmont did NOT change their prices from the previous year, which was outstanding. Initially, from my American perspective, that jerks my chain. Why would I buy a mediocre wine for the same price as the previous year's outstanding effort? Well, there is a flipside to that coin. In spite of 6 consecutive banner years for the nebbiolo grape, Barolo and Barbaresco prices were relatively stable. When the hopefully spectacular 2004's are released in a couple years, the prices will be, well, stable. Boring huh? From an Italian perspective, pricing fluctuations that drop too low will stain the reputation of their king grape, and too high will scare consumers away. So they are the Goldie Locks of prices, one that is jusssst right.
Well, it's still expensive, but not stratospheric (with the exception of Angelo Gaja). Remember, Italians drink wine w/ nearly every meal, and even so-so Barolo will go swimmingly w/ food, you'll just have to drink the 2002's earlier. My bet is they'll still sell.
Italy also has their share of status Super Tuscan premium brands like Ornellaia, Sassicaia and Tignanello, to name a few. Do you think they lowered their 2002 prices? Hah! Much like the Californian tradition of pricing, there are plenty of BMW owners out there whom will brag to their buddies about drinking a '02 Sassicaia. Who cares what year it is, it's Sassicaia!
Anyways, where does it leave me, the middle-ground consumer? Feeling pretty stupid I guess. I will pay more money for a quality bottle, whether it's from South Africa or Chile, from '01 or '03. I'm not hooked on collecting verticals, so brands don't do much for me, unless they have the uncanny consistency of Insignia or Lafite. I like great wine, obscure or popular, trendy or cheesy. I will pay more money for a wine that has a track record, heritage and cultural attachment (a classified growth from Bordeaux). I will also pay more money for a wine that is illusive, or has decades of age under its belt (assuming they are quality wines). If you can sip something that still has vibrancy and was conceived during WWII, with the character lines to prove it, then it's worth paying more money for it (even if you don't drink it, the 'baseball card collector' in me still appreciates the value). A tough to find single vineyard wine (that actually tastes like a single vineyard wine) is also something I'll throw my money towards, if I'm lucky enough to find it.
In an ideal wine world, the Bordeaux system of pricing seems to be sensible, but the 'vintage of the century' concept leaves my wallet with a bad case of indigestion. A man's gotta know his limitations, and the 2005 vintage is on crack, as are some of the '00 and '03 chateau. Perhaps a moderate version of the Bordeaux pricing concept, as a 30 dollar off year and 300 dollar rock star year just seems a bit too wide a gap.
If Robert Parker can reasonably quantify a wine's merit (w/in a standard deviation of error, of course), shouldn't we be able to do the same for its cost? Just like New York City real estate, I wonder if we are dealing w/ an unburstable bubble. Shame on you crazy consumers!