The Price of Wine

Wine can be expensive -- very expensive. There is no doubt about that. High-end, low-production wines become very collectible and fetch enormous prices. Wines that are trendy often raise their price structure rapidly. Others remain quite inexpensive despite their high quality. And, then there are some that have seemingly little quality at all, but command relatively high prices.

Why? What's going on here? What makes a wine sell?

I'm going to give yiu a hint here. And, understand that the hint here is entirely a matter of opinion; my opinion, that is. Of course, this is my blog which means that except for the smattering of facts that I toss in (I'd like to believe that most of what I write here is factual or at least makes every effort to be factual), everything in here is my opinion.

In wine, more than the taste, it's all about the branding. And, a very key component of branding is reputation, but there is far more to it than that. There is the label, the bottle style, and perhaps more than anything else, there is the name. I'm going to tell you a little story about that, but first let's talk about the name.

What sounds like a better name for a wine to you? Wagner Chardonnay or Mer Soleil Chardonnay? I bet it's the latter. Which sounds more exciting? Marquis Shiraz or Mollydooker Carnival of Love? Again, I bet it's the latter. Peopla buy names.

Now, we get deeper into opinion with the story I promised you.

In 2006, one of the family winemakers at Wagner Family Wines (the producer of Caymus, Conundrum, and Mer Soleil), Joe Wagner, started his own Pinot Noir line that he called Belle Glos. It was a natural name for him to use. After all, he named it after his grandmother, Lorna Belle Glos. 

Meaning beautiful gloss, there is something distinguished and perhaps a bit romatic sounding about the name Belle Glos. One of the Pinot Noirs that Joe Wagner chose to make he branded Clark & Telephone. Another he branded Meiomi, meaning coastal in the language of the Wappo, indigenous people to northern California. After all, Joe Wagner was getting all of his Pinot Noir from coastal vineyards.

Then a funny thing happened. Fast forward to 2009. I was at a fairly casual business dinner in a restaurant with tables placed close to me. I could hear the chatter at every nearby table. At one table, I heard a woman say to the man she was with, "Let's get Meiomi; that sounds yummy." He responded with, "But you don't like Pinot Noir." And her retort was, "But, it just sounds so good." From another table, I heard, "Meiomi is a cool name. I bet it's really good wine."

And, the wine came out with an expensive-looking label, at least to me. Adorned with Meiomi Pinot Noir and followed by a fancy script that few people actually took the time to read, it just had a high-quality look to it. And, people bought Meiomi.

Don't get me wrong. There is nothing wrong with Meiomi Pinot Noir. It can't hold a candle, in my opinion, to Clark & Telephone and is truly not in the class of some lower-priced, but not as well-branded Pinot Noir. But, the name worked the labeling worked, and Meiomi was and is quite approachable upon release.

So, what happened?

In 2015, Joe Wagner sold the Meiomi brand -- not the vineyard rights behind the brand, but simply the brand -- for ... wait for it ... $315 million. Even with the meteoric rise of the brand, that price was roughly a 24 times multiple of current and projected discounted future earnings.

That's nuts.

That's branding.

So, when you go shopping for wine, if you're buying something you have never heard of, don't get fooled by the name. Yes, Chateau Cheval Blanc does produce better wines (in probably everyone's opinion) than White Horse Wines. But, Meiomi may not turn out to be the best coastal California Pinot Noir you can find, even at that price.

When I look at a wine list, I often look for the wines that I think don't sell. Anyone can choose Silver Oak (not intended to demean Silver Oak, but in these parts, it is a standard higher-end and overpriced addition to wine lists) and impress their friends, but I would much rather pay quite less for a 2014 Montes Purple Angel from Colchagua Valley in Chile. 

Wine can be expensive. Pay for what's in the bottle, not for what you see on the outside.