The WS #2 wine, 2003 Quilceda Creek Cabernet Sauvignon (retail $85.00 but now up to $285.00) really punctuated the relative value of a wine. Or the outer limits of the value of a wine.
Reuben Swartz had a posting about this recently on his Dollars & Sense: The Pricing Blog entitled, The Price of Wine—Not About the Wine . One of his quotes, “Wine valuation is a great example of people not really knowing what something is worth, or even why. In many cases, we do not buy a product, we buy an experience.”
He links a recent piece in The Economist, Fruity Little Numbers, regarding a way wine is valued.
An interesting piece here from CNBC about Wine Economics, if you have a QuickTime player (free download here)
Probably the driest thing about the wine industry can be found here, but if you like numbers, you might find it illuminating. Fasten your seatbelts, the American Association of Wine Economists can be an interesting perspective on the wine business (but hey, I like the TV program Numb3rs).
The Hypothesis
Another and interesting anecdote, "Ernest Gallo, the patriarch of the family-owned E&J Gallo Winery in California (the largest winemaker in the world), recalls how, in the early stages of his career, he once sold wine in New York. He offered a buyer two glasses of the same red wine, the buyer drank the two glasses and asked for the prices of the ‘two’ wines. Upon hearing that the first wine cost 5 cents per bottle, and the second 10 cents, the buyer declared he wanted the 10 cents bottle."
Still there? Need an espresso? A break to pull the clothes out of the drier? Return a call from Ben Bernanke?
So what does it mean to us?
I was showing a young lad around the store, one who has some discretionary income, and is a lover of wine. And not just a number chaser. While I was talking to him, my internal “now I’ve got something to write about on the blog” monologue was really wondering why folks think there is so much difference between a Gaja 2000 Sori San Lorenzo for $300.00 and a Produttori del Barbaresco 2000 Paje’ for $50.00?
Look sometimes, we think we’ve got a big bad machine and then a little school bus stops us dead in our tracks. It seems mainly to be a guy thing, this quest for testosterone in a bottle, like a Trophy Wife. Used to be Petrus, now it’s Screaming Eagle. Used to be a Cadillac, now it’s a Hummer. Now it’s a Trophy Wine. Above the $50.00 dollar price level, how many of us can really tell? I asked a Master Sommelier friend of mine this question. If anyone would know, wouldn’t he? Guess again. He said, "I'm a Master Sommelier, not a Super Sommelier."
I feel for the wine lover, especially the folks who want to put a few cases away for the future. And not just for their kid's college education. It could feel like trudging that heavy old boat up the river, towards some heart of darkness point of no return.
Not as much as the poor blokes who spend $20-30,000.00 a month on their obsession with cornering the market for all the Big Red Wines out there. I could give them the name of an orthopedic surgeon who went through that phase, dug a hole in his home, and proceeded to bury hundreds of thousands of dollars in it, only to find he had a cellar full of trophy wines that weren’t drinkable or, if they were to someone, not to him. Not anymore.
My long-drawn-out-point is, if as Reuben Swartz says, "you are really not buying a product but an experience", do you want a one night stand or do you want wine on your rack that you can live with?
Seth Godin said it best, today - “We sell feelings. We don't sell stuff.”