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Exclusive wine…..Is it OK for wine to be exclusive?

I am the first to concede that the wines we make aren’t cheap. But I can’t remember the last time I had a communication complaining the wines are too expensive. We’ve had a lot praising what good value they are. So, I’d like to strip back this issue of cost and price. 

There used to be a pretty sound principal that could be used to judge pricing of goods. That stated that the difference between the ‘regular’ and the ‘best’ was one order of magnitude. For those not of a mathematical bent that means ten times.

That is pretty much how it used to run. I grew up in a world where that was reality: the price gap between a regular car and the finest was about ten times: Even 25 years ago, the gulf between a Ford Fiesta and a Porsche 911 (even one of the fruitier ones) was a factor of ten. A dinner at a Michelin 3 star restaurant was about £120 for the food, ten times that at the local steak house. 

Now it has all shifted. Actually, the category that has missed out on this seismic shift has been cuisine; a seven course dinner tonight with Gordon Ramsay will set you back £240 for the food, while you’ll struggle to find a regular high street restaurant where you could eat for £24. The finest cuisine has always been and still is, a relative bargain.

But elsewhere? You can spend a million pounds or two on a car and barely break sweat. Even a refurbished and rebuilt old Porsche 911 will set you back over half a million, close on ten times its original price. Watches run to several hundred thousand pounds, handbags?? Don’t get me started. 

You get my drift. The rules have all been stretched just as the wealth of the uber-rich has stretched. 

Wine is no exception. I’m not going to do the boring thing of “I remember when I could buy…” Yes, I’m an old fart who saw the great bands live and bought the wine for a song. But we have to consider where this leaves us. 

When wine followed the one order of magnitude rules, then a keen wine drinker could push out and see the peaks as a special treat. Now they’d need to commit a felony to do so. 

A good bottle of wine (for the sake of where I’m sitting today, I’ll stick to UK currency, you can all do the maths) is easily attainable for £20. Let’s make that our base price. It’s being generous as there are ordinary wines at a third of that and some surprisingly good stuff at half, but never mind.

Using the formula, that puts the very best at £200 a bottle. If your tipple is Pinot Noir that barely gets you over the start line. Bottles at £1000, even for young wines, are not unusual. That doesn’t even get you into the big boys club, just the trendy newcomers. Two factors of magnitude, so £2000 a bottle are the figure today. That’s a hundred times the price of the ordinary. There is no defence that it costs a lot more to make. I make wine and I know the maths, theirs and ours. Trust me, it doesn’t, though there are consequences of pushing wine prices through the roof that can push their costs up. 

Is this right is a meaningless question. But, is this fair might be open to discussion. When a Domaine or a Chateau has built its reputation and its prosperity on the support of a customer base over decades, is it fair to walk away from them because the prize is irresistible?  

That has me thinking about customer relationships. Bordeaux developed an exceedingly powerful system of Courtiers and Negociants driving a distribution plan where the Chateau set the price, margins were fixed and the wine went to the first to place an order. Added to that, a system that sold wine before it was even finished being made let alone being there to drink, created the offering of wine as an investment: it was no longer a beverage, but a currency. It became a phenomenally powerful way for those Chateaux that were in the system to profit, it put  a fair few of them squarely in the hundred times club, but left the small players outside picking up the crumbs left.

By contrast, Burgundy was an infinitely complex bazaar, a tangle of private deals by Domaines which was a system that span out of control as prices skyrocketed, to the joy of those producers who wanted the money, but left the producers trying to keep sanity in their pricing seeing their wines kidnapped in a secondary market that fed on hopelessly disorganised distribution, devoid of strategy. Again, no shortage of hundred timers, willing or not.

Both these regions seem to be waking up after a crazy party, looking around at the debris and wondering what on earth is going to come next. 

The customer will decide that, but do either of these regions really know who their customers are, or will be? Their pursuit of exclusivity has left their traditional supporters far behind.

There is a difference in the US. The owners of Napa Valley wineries are mostly retired businessmen who built their domaines on direct to customer sales, with the price-tag often being the subject of bragging rights. Exclusivity goes without saying. It is the very fundament of such wines. They know who their customers are: they are the financial elite, and proud of the fact. 

Let’s be clear. I am not claiming there are issues with the morality of this. If a producer has the nerve to ask the price and there are customers with the wallet to pay it, then they can choose to do that. As a long time customer, I may not like it, but that is my problem, not theirs. None of us enthusiast consumers should be worried at all; the world is full of clever winemakers, exceptional vineyards, new projects and new ideas. Even if I were a few decades younger, I could never catch up with the plethora of excitement out there to be affordably enjoyed. This is truly an era of great richness of quality right across the world of wine.

So, I’m happy to leave exclusive wines behind. The word exclusive should be an oxymoron when used to describe the word wine. Wine is about inclusion. It is about sharing, camaraderie, a coming together, not a locking out. A great wine is a conversation piece, not in its majesty or its scarcity, but in its inherent interest. 

I don’t want to ever drink exclusive wines. I don’t think it’s clever; it is a corruption of the whole notion of what wine represents. I raise a glass to inclusion. Yes, it probably will need a financial stretch for some enthusiasts to afford those wines of high regard, and I’m not ashamed to be sitting near the top of the ten times rule, but it should never be a stretch that only the very few can muster.

Nigel

Winemaker's comment
Nigel's musings
Blair Walter
Nigel Greening
Winemaker's Comment
Nigel's Musings

Exclusive wine.....Is it OK for wine to be exclusive?

I am the first to concede that the wines we make aren’t cheap. But I can’t remember the last time I had a communication complaining the wines are too expensive. We’ve had a lot praising what good value they are. So, I’d like to strip back this issue of cost and price. 

There used to be a pretty sound principal that could be used to judge pricing of goods. That stated that the difference between the ‘regular’ and the ‘best’ was one order of magnitude. For those not of a mathematical bent that means ten times.

That is pretty much how it used to run. I grew up in a world where that was reality: the price gap between a regular car and the finest was about ten times: Even 25 years ago, the gulf between a Ford Fiesta and a Porsche 911 (even one of the fruitier ones) was a factor of ten. A dinner at a Michelin 3 star restaurant was about £120 for the food, ten times that at the local steak house. 

Now it has all shifted. Actually, the category that has missed out on this seismic shift has been cuisine; a seven course dinner tonight with Gordon Ramsay will set you back £240 for the food, while you’ll struggle to find a regular high street restaurant where you could eat for £24. The finest cuisine has always been and still is, a relative bargain.

But elsewhere? You can spend a million pounds or two on a car and barely break sweat. Even a refurbished and rebuilt old Porsche 911 will set you back over half a million, close on ten times its original price. Watches run to several hundred thousand pounds, handbags?? Don’t get me started. 

You get my drift. The rules have all been stretched just as the wealth of the uber-rich has stretched. 

Wine is no exception. I’m not going to do the boring thing of “I remember when I could buy…” Yes, I’m an old fart who saw the great bands live and bought the wine for a song. But we have to consider where this leaves us. 

When wine followed the one order of magnitude rules, then a keen wine drinker could push out and see the peaks as a special treat. Now they’d need to commit a felony to do so. 

A good bottle of wine (for the sake of where I’m sitting today, I’ll stick to UK currency, you can all do the maths) is easily attainable for £20. Let’s make that our base price. It’s being generous as there are ordinary wines at a third of that and some surprisingly good stuff at half, but never mind.

Using the formula, that puts the very best at £200 a bottle. If your tipple is Pinot Noir that barely gets you over the start line. Bottles at £1000, even for young wines, are not unusual. That doesn’t even get you into the big boys club, just the trendy newcomers. Two factors of magnitude, so £2000 a bottle are the figure today. That’s a hundred times the price of the ordinary. There is no defence that it costs a lot more to make. I make wine and I know the maths, theirs and ours. Trust me, it doesn’t, though there are consequences of pushing wine prices through the roof that can push their costs up. 

Is this right is a meaningless question. But, is this fair might be open to discussion. When a Domaine or a Chateau has built its reputation and its prosperity on the support of a customer base over decades, is it fair to walk away from them because the prize is irresistible?  

That has me thinking about customer relationships. Bordeaux developed an exceedingly powerful system of Courtiers and Negociants driving a distribution plan where the Chateau set the price, margins were fixed and the wine went to the first to place an order. Added to that, a system that sold wine before it was even finished being made let alone being there to drink, created the offering of wine as an investment: it was no longer a beverage, but a currency. It became a phenomenally powerful way for those Chateaux that were in the system to profit, it put  a fair few of them squarely in the hundred times club, but left the small players outside picking up the crumbs left.

By contrast, Burgundy was an infinitely complex bazaar, a tangle of private deals by Domaines which was a system that span out of control as prices skyrocketed, to the joy of those producers who wanted the money, but left the producers trying to keep sanity in their pricing seeing their wines kidnapped in a secondary market that fed on hopelessly disorganised distribution, devoid of strategy. Again, no shortage of hundred timers, willing or not.

Both these regions seem to be waking up after a crazy party, looking around at the debris and wondering what on earth is going to come next. 

The customer will decide that, but do either of these regions really know who their customers are, or will be? Their pursuit of exclusivity has left their traditional supporters far behind.

There is a difference in the US. The owners of Napa Valley wineries are mostly retired businessmen who built their domaines on direct to customer sales, with the price-tag often being the subject of bragging rights. Exclusivity goes without saying. It is the very fundament of such wines. They know who their customers are: they are the financial elite, and proud of the fact. 

Let’s be clear. I am not claiming there are issues with the morality of this. If a producer has the nerve to ask the price and there are customers with the wallet to pay it, then they can choose to do that. As a long time customer, I may not like it, but that is my problem, not theirs. None of us enthusiast consumers should be worried at all; the world is full of clever winemakers, exceptional vineyards, new projects and new ideas. Even if I were a few decades younger, I could never catch up with the plethora of excitement out there to be affordably enjoyed. This is truly an era of great richness of quality right across the world of wine.

So, I’m happy to leave exclusive wines behind. The word exclusive should be an oxymoron when used to describe the word wine. Wine is about inclusion. It is about sharing, camaraderie, a coming together, not a locking out. A great wine is a conversation piece, not in its majesty or its scarcity, but in its inherent interest. 

I don’t want to ever drink exclusive wines. I don’t think it’s clever; it is a corruption of the whole notion of what wine represents. I raise a glass to inclusion. Yes, it probably will need a financial stretch for some enthusiasts to afford those wines of high regard, and I’m not ashamed to be sitting near the top of the ten times rule, but it should never be a stretch that only the very few can muster.

Nigel