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Price, value, and the California wine business

Dear California wine business:

I honestly don’t like writing nasty things about you. You make some of the best wine in the world, and I’d much prefer to write about that. But you drive me crazy, because you continue to do things that make it that much more difficult for me to be nice.

The most recent example came last month, when two of your wineries – two of my favorites, who know what I want to review — sent me samples. Did the samples include any of the great cheap wine they make? Nope. They were the usual overpriced big reds, including a 15 percent zinfandel, the kind of wine that I regularly rail against. These wines aren’t made because people want to drink them, but because you think you should make them. God only knows why, though I suspect the Winestream Media has something to do with it.

The wine business changed for our lifetimes five years ago, when the recession forced consumers to trade down and consumers discovered that they liked the cheap wine they found. In 2008, Americans drank more wine than they did in 2007, but spent less to do so. This is one of the most important moments in the history of the modern wine business, and I’m not the only one who has noticed it. More, after the jump:

In addition, it parallels what’s going on with the rest of the U.S. economy. We’re not spending money just to spend money or buying stuff just to buy stuff; rather, we’re thinking about what we buy, and we want value as well as low prices.

I am reminded of this every time I buy wine. The most recent example came in September when I was in Kerrville, an affluent Texas resort town, and the two older Anglo men in line ahead of me were buying Franzia boxed wine and a big bottle of Rex Goliath. They could, from what I saw, afford to buy anything they wanted, and they bought cheap wine. Americans shop on price, no matter how much you wish they didn’t. All you have to do is look at the sales numbers. No one buys those 15 percent zindandels with the big scores; they buy cheap pinot noir.

Some of you have figured this out, which is why wines like Barefoot and Cupcake have done so well over the past five years. These wines, as simple as they are, are cheap and offer some kind of value. But you can do better than that, and I don’t understand why so many of you don’t want to try. Or, having tried, given up. What’s so awful about making honest, quality cheap wine? Why do so many have to suffer through so much overpriced, overdone wine when you have the skill to make fabulous wine that is neither overpriced nor overdone?

This is not to say there isn’t a place for wine that costs more than $10 (and I’m getting a little tired of being accused of hating expensive wine just because it’s expensive). Ridge has earned popular and critical acclaim, and its least expensive bottle is $25. But that’s because it offers value at those prices, something that is sadly lacking at so many other producers.

Your customers understand this in a way that you don’t. You’re still making and marketing wine as if it was 1995 or 2005, when a higher price meant better wine (or, if not better, more desirable), and value didn’t matter. The world doesn’t work that way anymore. Understand that, and everyone will be better off, including me. I can then drink your wine and not have to write you a letter like this.

Sincerely,
The Wine Curmudgeon

For more on wine, prices, and value:
The Treasury debacle
Retailers and wine prices
Wine of the week: Little James Basket Press NV
Five things the wine business can do to help consumers figure out wine

6 Responses to Price, value, and the California wine business

  1. richardcalon@gmail.com' Rich says:

    Hey, realize you regularly rail against high octane wines, but… your comment that a Zin was 15% alcohol that nobody wants to drink? I mean no disrespect, but… some folks do like to drink them. I have tasted low octane wines that are over the top. If the wine is balanced and finessed what difference does the alcohol make? Of course, I realize your contention that a 15% wine can’t be balanced and finessed.

    But… believe the reason winemakers make these wines is because people do want to drink them. I love Zins – and while one can make a 14% Zin, the nature of Zinfandel is that, in California, with the growing season, most Zins are going to come in at 15 plus % alcohol.

    My point is that people should drink what they like and not be restrained by alcohol, lack thereof…

    I realize you will have insightful and pithy riposte to my rather clumsy statements above. But… just wanted to point out that I am one of the many Neanderthals who loves a lot of California Zin. I also like hoppy beers! but, also like a finessed Cabernet.

    • Jeff Siegel says:

      I’m flattered, Rich, that you think so much of my talent — pithy, indeed. But I’m not that kind of guy to do that to someone who takes the time to leave a comment here. The first rule of wine — the only rule of wine — is to drink what you like, and it’s not for me to tell you what to drink. I offer my opinion, offer facts to support my view, and let people make up their own minds. Revolutionary in wine writing, I know.

      My point is that (and since I don’t have access to all of the the numbers, I could be certainly be wrong) the sorts of high alcohol wines I describe are over-produced; that is, not made to meet consumer demand, but to get high scores, bring a better reputation to the winery, or because the winemaker wants to impress her or her friends. That’s why I spend so much time with sales figures, to look just those kinds of trends.

  2. whitealec11@gmail.com' ALEC WHITE says:

    What frustrates me is that most California wines costing less than $10/btl are sweet. Not sweet like dessert wines but enough to make them unsuitable with meals. Your reference to Cupcake and Barefoot are two examples, but there are plenty of others.

    Too many California wines are better for sipping as cocktails than drinking with meals. While I could understand that producers are targeting “transition” wine drinkers who are making the switch from soft drinks and who aren’t ready for bone-dry wines, I suspect that this isn’t the main reason. Rather it’s the marketing strategy that a large part of the industry has adapted that positions wine as a special occasion, exclusive beverage rather than something you drink regularly with meals.

    In Europe it’s easy to find inexpensive, excellent quality dry red and white wines that are made to be enjoyed with meals. And many restaurants serve wine by the carafe. The last time I saw a carafe in a U.S restaurant was in the ’70s.

    • Jeff Siegel says:

      Check out the $10 Hall of Fame in the tab at the top of the page, Alec. Those are the quality wines you are looking for, including some California labels. Sweet fruit in dry wines, whether through adding Thompson grape juice concentrate or some other machination, is something I talk about in the cheap wine book (shameless plug alert!). Your point is well made: These wines are for sipping, not drinking, and that may well be the marketing approach.

  3. What you mention in the beginning of your post is so important that it’s even worth repeating: wine should be produced because people want to drink them, not because the producer wants to produce them. I think that is a lesson that applies not only to producers in California…

  4. Shane_christ@msn.com' Shane says:

    What makes any of you know the actual abv on a wine? The ttb allows a +\- of 1.5%. So…. Unless you actually measure it, or you trust the “winemaker’s notes” that 13.5 could be a 15, or that 11.5 old world a 10% verde……

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