Monday, April 12, 2010

Why good California wine is so darn expensive

We read a piece on the Tablas Creek blog* today that is too good not to share. The piece explains in thorough detail why Tablas Creek elected not to buy a potential vineyard site to expand production of their $25/bottle Cotes de Tablas line. The short answer is that the land was too expensive. In getting to that conclusion Jason Haas delineates financing costs, farming costs, winemaking costs, and the cost of just about everything that goes into that bottle of wine. It's difficult to see how anyone could produce a good wine from a coastal vineyard for less than $25.

Haas allows "that as long as winemakers can find older vineyards of less-fashionable varietals, we'll see growth" in the $10-$20 range, but scavenging thus is hardly sustainable. Such scavenging is pretty much PWR's business plan, and given our size and the economic malaise in the wine industry, we expect to have no trouble sourcing good grapes over the next few years, but we certainly won't be planting a vineyard any time soon.

What's the solution? We are not sure there is one. As Haas eloquently states, there are too many demands on land suitable for planting coastal vineyards to expect land prices to fall significantly. The California coast simply is not suited to produce great wines at low prices, at least not on a large scale.

The solution may lie inward, however. California's Great Central Valley, which runs from Redding in the north to Bakersfield in the south, produces much of the nation's produce and is no stranger to the grapevine. Most of the viticulture is focused in the Souther San Joaquin Valley--roughly from Fresno to the South--where the winegrapes planted among the Thompson seedless raisin grapes are hardly renowned for their quality.

The Southern San Joaquin (SSJ) is hot and nearly water-less, with sandy and somewhat saline soils. This is no region for Chardonnay or Cabernet, let alone Pinot Noir (although acres of each variety are planted there, with disastrous results). But we believe the region could be just fine for varieties suited to such a climate. Varieties from regions such as Greece (Xinomavro, anyone?), Sicily (Nero D'Avola) or Spain (Garnacha/Grenache), for instance.

Housing pressures are great even in the SSJ, but land is still much cheaper than in coastal regions. It's also less expensive to farm. Now we just need to find a grower willing to take the plunge!**

* The Tablas Creek blog is well worth reading for many reasons. Today's piece illustrates the best of them--Jason Haas is open and honest in his discussions. The blog does not read like PR fluff. We love Tablas Creek wines. While not exactly inexpensive, they represent excellent quality at their prices, and are easily the match of wines costing many times as much.

** One reason growers are reluctant to plant varieties that may be better suited to their climate is the perception that consumers won't buy a wine that does not bear a familiar varietal name on it. Given the difficulties *everyone* is facing selling Syrah these days, the growers are probably correct. But would you rather have an eye-poppingly good Mavrodaphne or a dreary, flabby raisin-y Cabernet? Good. Now go tell 100 of your friends.


  1. For those wishing to pursue this issue further, Steve Heimoff posted an interesting response to Jason Haas's blog piece here:

    In it he lists several California wines in the $15-$20 range that he is fond of. We have enjoyed the few wines on the list that we know, and will look for others. You may wish to do the same:
    Alma Rosa 2007 Chardonnay (Santa Barbara County, $18)
    Atmosphere 2008 Demark St. Vineyard Fume Blanc (Sonoma Valley, $18)
    Novy 2007 Syrah (Napa Valley, $19)
    Sausal 2007 Estate Zinfandel (Alexander Valley, $19)
    Navarro 2008 Gewurztraminer (Anderson Valley, $19)
    Tangent 2008 Paragon Vineyard Riesling (Edna Valley, $20)
    Sean Minor 2008 4 Bears Pinot Noir (Carneros, $17)
    Pedroncelli 2007 Three Vineyards Cabernet Sauvignon (Dry Creek Valley, $16)
    Katherine Goldschmidt 2007 Crazy Creek Valley Cabernet Sauvignon (Alexander Valley, $20)
    Concannon 2007 Conservancy Petite Sirah (Livermore Valley, $15)
    Foxen 2008 Ernesto Wickenden Vineyard Chenin Blanc (Santa Maria Valley, $20)

  2. I love Xinomavro, always bring some home when I go to Greece...what a great idea for the central valley!


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