Why does top Cabernet cost so much more than top Pinot Noir?
Regarding “bargains,” while it is undoubtedly true that it is harder to find a great CA Pinot under $30 than it is with some other varieties, I think CA Pinot provides superb “value” when you consider the full QPR. Consider that your top rated wines above are $100 and average maybe $60-70. Compare that to the prices of your highly-rated Cabs. It’s one of the things I’ve always appreciated about California Pinot Noir.
This is certainly true, but begs the question, Why? It’s not because there’s an inherent difference in quality between top Cabs and Pinots. A Janzen 2009 Beckstoffer To Kalon Vineyard Cabernet Sauvignon (97 points) is not a better wine than Failla’s 2010 Occidental Ridge Pinot Noir (also 97 points), even though the former retails for $135 while the latter is a “mere” $60. So what gives?
Here are some factors that could raise the price on the Napa Cabernet: buying grapes from Beckstoffer, who charges a lot, price of new barrels, cost of consultants, cost of bottles (Napa Cabernet generally is in heavier and presumably more expensive bottles), cost of corks. Without knowing the details, I will assume that all these costs were higher for the Janzen than for the Failla. Still, that can’t account for a difference in price of $75!
So we have to go to factors that are unrelated to the cost of production. One that’s obvious right off the bat is the influence of peer pricing. In Napa Valley, you can’t price a wine below the price of your perceived competitors (or so the argument goes). If your wine costs significantly less than the “neighborhood” you want to live in, then buyers—consumers, somms, retailers, even, alas, some “critics”—will perceive you as “lesser” and conclude that your wine cannot be as good, even if it is. This is why, when Screaming Eagle raised its list price some years ago, you saw a kneejerk reaction up and down Napa Valley: everybody who perceived himself as in the same elite category as Screaming Eagle felt it necessary to jack up their prices accordingly.
So that’s one reason, but there’s another, more related to history: California mimics Europe in its approach to the pricing aspects of wine, and Bordeaux in general always has been more expensive than Burgundy. While there are obvious exceptions, this statement is true. It’s curious, because the average Bordeaux chateau has a higher production than the average Burgundy domaine, so you’d think it would be the other way around. But no. For some reason, going back hundreds of years, consumers (wealthy white western Europeans and, a little later, Americans like Thomas Jefferson) were willing to pay astronomical prices for top Bordeaux wines like Lafite and Latour. That tradition is larded through our wine culture and remains in force today.
What’s changing, of course, is that an entire younger generation of Americans couldn’t care less about Bordeaux. Report after report proves this. As Eric Asimov wrote, for a greater number of Americans, especially younger ones, Bordeaux “is now largely irrelevant.” Pressure on the Bordelais to ease up on prices has been neutered only by the false and thus unsustainable popularity of these wines in Asia. But the marketplace eventually rationalizes everything (if Adam Smith is correct), and so we should see an equalizing of Bordeaux and Burgundy prices internationally sooner or later.
In California, the distorting effects of this historical imbalance between Bordeaux and Burgundy struck early, but are now in an interesting state of flux. We saw the Great Recession pose a threat to triple-digit Napa Cabernets. Now that we’re in recovery, we see a consumer who’s no longer willing to blindly plonk down whatever it takes to buy the Cabernet of the moment. And to the extent this consumer exists, he probably has gray hair.
This is Pinot Noir’s moment to shine, and it can happen, if—and it’s a big if—the top producers manage to resist their hubris and keep prices moderate. And by “moderate” I mean less than $100.