Ever wonder why Napa Wines are so expensive?
SEATTLE, March 15, 2013 – Millions of wine lovers – both beginners and self-entitled “experts” flock to the Napa Valley every year in their thirst for that “perfect Cab, Merlot or even Zinfandel’.
Certainly, Napa grows quite a bit more than these three varietals, but they are the reds that really helped shape this amazing region, however, it was Cabernet Sauvignon that put it in a global stage.
While most winos I know of pay their respects to Napa, it’s become quite evident over the past decade or so that it has been out-pricing itself – a huge part of that is complicated by the fact there are competing regions like Washington and Oregon which have been winning at the quality-to-price ratio.
Here are a few reasons why – generally speaking – you will end-up paying more for a Napa Wine versus competing regions:
The Trade are primarily to blame for the “success” of this horrible rating system and the reason is quite simple. Trade people are buyers from wine stores, grocery stores and restaurants. They get sampled on so many wines on any given day that to sit and taste them all would be a full-time job – instead, they have come to rely on the 100-point scale that’s in use by Wine Advocate, Wine Spectator and Wine Enthusiast as well as the many independent websites as well.
Even Internet wine-sensation, Gary Vaynerchuk used it during his time doing the Wine Library videos.
While this doesn’t only affect Napa, this system has essentially controlled the prices of wine – largely due to an industry whose marketing folks longed for a rating system. Robert Parker delivered it, Wine Speculator used it, the marketing folks ran with it and guess what? We’re now paying for it.
Wines that rate high drive a demand that soars and wineries only have so much wine to go around so it rapidly turns into a supply and demand issue. Wineries can pretty much charge whatever they want to from that point and the clamoring patrons will gladly pay it to sip on a 95+ scoring wine.
The pattern that this combination of scores and winery supply created a huge fervor of consumers who were and are so willing to pay top dollar for a “Napa Cab” etc. that we now find it the norm to see new wineries releasing wines at $75 or more. In fact, there are many who think that if a bottle of wine doesn’t cost X-amount of dollars, then there must be something wrong with it.
Real estate catches up:
Thanks in part to the huge cash-flow running through Napa, there was more demand than ever for land; however, there is only so much land to go around in Napa which, in turn, jacked up the cost of real estate to stratospheric levels.
This means that any winery buying or growing grapes in the region now have a higher inherent cost of doing business and the only way for them to recoup that cost is by hiking the prices up of their wine. And if a winery wants to play in the “Napa Arena”, they have to pay the premium price for the fruit – that too adds to the cost of the final price.
Home-biased palates and the trusting of scores:
Finally, most – if not all the blame – comes squarely down on us, the wine lovers. Bottom line is, if we had a more widely adjusted palate and a broader scope of what’s going on in the world of wine, we wouldn’t be so ignorant as to keep paying for wine that’s not worth anywhere near what’s being asked for it.
Just because a wine gets a certain score doesn’t mean that we should clamor to that wine so much that we’re willing to pay 2-4x what it’s worth.
Remember, wineries can only get away with overcharging for wine just as long as we gladly keep paying for it. The fact that over 1-million people live about an hour away in San Francisco has funneled a lot of wealth into Napa. This has the unfortunate impact of a lot of people who have too much money and very little wine knowledge, that love to brag about how much money they spent on a bottle of wine. It’s these people that we need to reach out to and help educate – we’re all in that effort together.
Steps we can take:
- Start drinking wines from other USA regions and the world
- ALWAYS embrace your palate over ratings – never trust reviews at face value!
- Remember, you are the only person in the world with your palate
- If you insist on supporting Napa, fine, but each time you buy a bottle also buy one from a different region, state or country
Is Napa the only area caught up in their own stardom? No, but they’re clearly the 900lb gorilla in the room and the region that most people think of first when you bring up California or even USA wine production.
Thankfully, we have seen a modest price correction by many Napa wineries in the past few years, however, it’s not the prices that offend me, per se, it’s the lack of quality for those prices as there are so many other areas – even within California – that generally deliver a far better value for the money. If Napa producers want to keep charging the prices they do, don’t you think it’s about time we wine drinkers ask them to match those prices in quality?
Finally, there are indeed good wine producers from this area so please don’t think I’m throwing the baby out with the bathwater – to all you quality-minded Napa producers out there, keep doing what you do best – we don’t mind paying for your wine because at the end of the day you make wine that’s Worth Every Penny.