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The Great Cabernet Ripoff
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A Wall Street-like bubble has engulfed the world’s favorite red wine, causing exorbitant prices for inferior grapes. Keith Wallace uncorks the wine industry’s dirty secret.
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To write this piece, I have uncorked a personal favorite, a 2002 Napa Cabernet Sauvignon from Joseph Phelps. This is a magnificent wine, an affair of force and delicacy. Grown in the right place, crafted in the right hands, cellared appropriately, it resonates upon the palate like Chopin's Prelude in A Major.
I have been in love with Cab for over a decade now. We have had some great memories together. It is with great sadness and regret that I have to acknowledge our growing estrangement. Our love affair is troubled, and I have been stepping out with so many Pinot Noirs of late, it's scandalous.
There is no logical reason that Cabernet is nearly 20 percent more expensive than Pinot Noir on average. It should be the opposite.
But I am not completely to blame. Over the years, my dear Cab has devolved into a preening overindulgent drama queen, demanding more and more from me, and giving less and less in return. For every great bottle, such as the one I am enjoying right now, there have been a dozen brutish nightmares of overpriced tooth-staining swill.
As with so many breakups, it comes down to money. The cost of Cabernet has become unhinged from reality. A bottle of these grapes, chosen at random, is likely a ripoff. The Wine Institute in California reports that the average price of a bottle of Cabernet on a wine list last year was over $86. The runner up, Pinot Noir, clocked in at just under $69. It gets worse as the wines get better. If you look at wine ratings from Wine Spectator as a litmus test, prices for Cabernet rated as “excellent” are now wildly more expensive than other red wines of the same caliber.
All wines should bow to the pressures of basic economics. Quality plus scarcity plus popularity equals the price a wine can fetch. For all those reasons, a bottle of Jacques Prieur 2005 Corton-Bressandes costs $200 a bottle: It's an amazing bottle of wine (95 points from Wine Spectator) from a popular grape (Pinot Noir) from a famous wine region (Corton-Bressandes in Burgundy), and is produced in a tiny quantity (216 cases). It is expensive and it should be expensive.
There is no logical reason that Cabernet is nearly 20 percent more expensive than Pinot Noir on average. It should be the opposite. Cabernet is easier and cheaper to grow. It's easier to make. Plus, there is much more of it, too. There is about 128,000 acres of Pinot Noir planted worldwide. That sounds oceanic, until you realize there is more than 75,000 acres of Cabernet planted in California alone, and about a half million acres planted worldwide. Pinot is a mere puddle in comparison.
Cabernet doesn't cost more because it’s inherently a good wine: It just costs more. In a 2003 study, academics from University of California at Davis showed that Cabernet costs more than any other California wine, regardless of quality. It doesn't matter if tastes like a dead seagull spewing maggots, it will cost more. If it’s from Napa Valley, that fact alone will increase the cost by a few more points.
Most Cabernet is purchased for less than $15 in the U.S. In that category, Cab is a sad and wretched lot. Even if you are spending $30 a bottle, you are more likely than not getting the Muzak rendition of a wine: Big oak, big fruit, and big alcohol packaged up in a stylish bottle.
John Talks Joe
Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
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Keith Wallace is the founder of the Wine School of Philadelphia.
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Keith Wallace is the founder of the Wine School of Philadelphia.
Very enlightening article Keith...I off to drink another Pinot or Merlot :)
Cheers
Keith, nicely done, but while you're right, I don't think you can disabuse people of their Cabernet...er...abuse. You and I both know we have a challenge getting people to try something outside their comfort zone of half a dozen varietals. But we'll keep trying.
I love Cab..I too have started a new love affair.... a wonderful Merlot ..Estacia 2006.The best everday wine around! It only cost $13.99.
great article, finally a bright light shone on the cab craze. I moved on to other varietals years ago and my wallet thanks me. I'll choose a top rated aussie shiraz or Argentinian malbec against a California cab any day and be holding three bottles instead of one for the money.
As the beverage director of a restaurant and a general wino, I found this piece fresh and informative. The writing is engaging and brings important background to mind when shopping for wines, particularly in this economy, when price is certainly a factor for most. i will look forward to exploring the other areas of interest that Kevin Wallace deems fit to share! Good work!
Great piece, Keith. Spot on.
I am glad someone is finally calling out the big Napa producers on shenanigans. Just as the American carmakers were getting destroyed by the Japanese in the 1980's, we are seeing the same situation with Cab producers in Chile and Argentina. Stop the madness!
Nice article Mr. Wallace. As the last line of sales of Cabs in a big city and former wine buyer for restaurants, I can tell you its about perception for the buyers of pricey cabs. They see Montalena or Silver Oak on the label and they think they are getting the best available simply because of the price. Oftentimes the conversation between a guest and waiter/ sommelier begins with price... LOL. Conversely, they also buy it because they want to be perceived as powerful as they think the wine the are consuming is peceived to be by those with whom they drink it. I prefer to stick with cheap southern French wines and the Otagos region from New Zealand. I'll be looking up the UC Davis study. Thanks for the article.
Opus one 2005 90 pts $190 22,500 cases
Insignia 2005 92pts $200 12,000 cases
Caymus SS 2005 94pts $160 11,500 cases
Haut Brion 2006 94 pts $575 11,000 cases
Lynch Bages 2005 93 pts $105 35,000 cases
Sassicaia 05 94pts $220 20,000 cases
Aubert UV Pinot 05 94pts $80 220 Cases
Pisoni Pinot 2006 92pts $65 687 Cases
D'angerville Volnay Champans05 93 pts $70 150 cases imported
A well written,and thankfully irreverant, piece from the wine consumer's point of view. Spells out clearly why prices have become obscene...especially if you factor in the markup at big name restaurants. I'm guessing Wallace won't be doing any Screaming Eagle verticals anytime soon at a toney boite!
My afficianado friends want to know what I have against Cab...as a varietal, nothing. But the Californicating around with price/quality ratio keeps sending me back to Brunello and Barolo.....I can usually find bang for my bucks at $65-$80.
What a refreshing take on this topic! I agree completely about the cost of Cab. And the writing is so fun and engaging, I can't wait to hear what this writer has to say about some of my other favorite wines!
It is rare to read an honest wine article. The author was articulate, precise, and revealed a fine sense of humor. An excellent essay, and a rare example of intelligent wine writing.
After reading this article, I was curious to know more about Mr. Wallace and his Wine School. What I found was quite surprising. His school is quite an affair, it seems. Who knew Philly was a hotbed of winos?
Great article! And it confirms what I've suspected for some time now. Mr. Wallace knows his wine; I think I better head to the Wine School and get my learn on.
Good article and discussion, Keith. And while Napa Cabs may be the poster child, this abusive, over-priced circumstance is not uniquely their problem. Australia premium wines are falling out of favor. Bordeaux is undergoing enormous upheavals in pricing and Futures campaigns (which have had minimal traction the past three years for different reasons). We'll see how/whether premium Spanish wines can sustain their cycle, but whether you're talking Cabernet, Merlot, or Syrah there is a growing glut of over-priced wine -- fine, mediocre, and awful.
Pinot is not immune, but may be a little more insulated to the extent they are more scarce.
Some may come back when the economy strengthens, but many will not. And to that end, are slots opening up on many fine wine mailing lists. It's a good time to be a wine lover. That is, if you still have a bank account to express your adoration!
Cabernet and I have had our issues too. This article is spot-on the reasons why. The love is still there, but we are just not quite "in-love." We have agreed to remain friends. It's all good.
Only 5% of sommeliers and other wine professionals in your class can tell the difference between Cab and Merlot? Wow. Just wow. Who goes to this school?
5% of all sommeliers in a double blind tasting, regardless of where they study.
Your such a friggin' Scotsman! Take off your kilt, put on a pair of pants, put your wallet in the back pocket, head down to the Chestnut St PLCB store, whip out your wallet and shout "I want some Insignia! And I want it now!!"
Just kidding Keith. I loved the article. Blunt, witty and to the point. I could actually hear you cackling a couple of times while reading it. I felt the need to bust some stones.Busting stones is what I do best. What I do second best ... well, that's none of your business. But what I do third best is seek out quality wines at decent or bargain basement prices. Like you, I have expensive tastes ... just can't afford all of them.
I agree with you on the price of good Cabernet. They have gotten a little big in the britches. It's hard to find a decent bottle at a decent price, especially since Jonathan Newman left the PLCB (I still have a couple '96 Mondavi Cabs bought at $20/bottle and still drinking very well, and a butt-ton of the '05 Silverado at the same price). If what your predicting is true about the collapse of the price of Cabernet wines, I will head down to the bank, see if I can take out a third mortgage and wait for the deals to come.
However, given the absolute abuse and over-hyping of the Pinot grape in California, I will have to disagree with that aspect of your article. Burgundy I will pay for, not overpriced, over-extracted, over-oaked Cali Pinot (and it's all overpriced). Even if it's cheaper than the Cab.
"Cabernet doesn't cost more because it's inherently a good wine: It just costs more." Hmm. A fun premise but I don't know how you can write this story and totally skirt the fact that Cab generally receives the most oak aging of any red wine. More new oak, for a longer period of aging and inventory simply means more more expensive wine, especially when it's French oak. Both Merlot and even monster California Pinot Noir generally have less new oak. It's not just about taste and demand. It's about the way we "build" wine. Wow: Case solved.
Also, do you have a source for: "Even now, the market for high-end Cabernet is falling apart. Auction and retail prices are down by 35 percent across the board?" Is this disproportionate to other wines? The Spectator auction index shows that 2 of the 5 biggest gainer wines at auction this quarter are right bank Bordeaux (primarily Cab.) These wines are a great example of why wines like Insignia are priced at a premium: Big Cabs have more potential to endure and gain as investments over time. You raise some valid points, but I think most of the price of Cab is easily explained.
Some good ideas in this reply, Jeff. It is refreshing to have someone intellectually engaged and offering an opposing viewpoint.
However, the idea that Cabernet is given more expensive oak treatment than other types of wine is not accurate. Most ultra-premium wines see new oak in about the same amount, regardless of varietal. The main difference is type of oak, the curing, and the toast levels during cooperage. If anything, one can use lower priced barrels of Hungarian and American oak with Cabernet Sauvignon. Even in the Grand Cru Classes of the Medoc, a small degree of American oak is used.
Kudos on doing some research on auction pricing. However, right bank Bordeaux are primarily Merlot and Cabernet Franc, not Cabernet Sauvignon. The Medoc, where most of the Cabernet Sauvignon is planted, is on the Left Bank of Bordeaux.
Your buying the next bottle, Jeff!
Keith
Thanks for the reply, Keith. That right bank statement was an error on my part that I realized after sending. The biggest gainers did include three LEFT bank Bordeaux. This quarter three of the five biggest gainers are from from Paulliac, albeit they include two first growth.
If we ever have the chance, I'll happily split the bottle with you. :)
Your article is spot on, but the title is misleading - It's not really a dirty secret when anyone can pick up any random issue of wine spectator and see that they can get a 95 point bottle of malbec or carmenere from south america for the same price as an 87 point (or worse) of california cab.
Those who are interested in great wine will take the time to research their purchases and get the best wine for their buck. Those that are only interested in the "bling" of a bottle of california cab will hop in their escalades and hummers, head straight to the liquor store, and get ripped off because they want to be trendy. Seems fair to me.
Sometime in the late 1970's my brother recommended a Cabernet Sauvignon to me. I only drank it at celebratory dinners, but fell in love. As only an occasional wine drinker, I had wondered what happened to that wonderful experience to be had at my price point. Even adjusted for inflation, I could not repeat the experiences of earlier times. Thanks for the explanation, I was beginning to feel like a jaded old man looking in vain for the romance of his first love.
I am a fully recovered cabernet addict. It only took one good bottle of malbec for me to see the light!
There may be other factors at play. E.g. Dom Perignon wasn't the first champagne, or the best. But it was the first to be blended and so guarantee the quality. Cab may be generally of a more consistent stability in tastethan Pinot thus commanding a better price for its "reliability".
Great point! I am not familiar with any studies done linking consistency of quality and price point. I would heartily agree that Cabernet Sauvignon is much more consistent in quality than Pinot Noir. That is due to both the grape itself and the places they are grown. That would be an extreme example. Correlation gets fuzzy when you take into account other wines from other places, such as Priorat or Heathcote, where quality is consistently excellent, but pricing is still within reason.
At the end of the day, Cabernet's popularity distorts its price upwards, regardless of quality.
Great article with good information. Give me a Malbec, shiraz or French mourvedre any day! I hope to see many more articles of this caliber from Mr. Wallace soon...
As a winemaker it is refreshing for me to hear your comments on the similarities between Merlot and Cabernet Sauvignon. Grown side by side, it is remarkable to see which has the cherry, strawberry, green pepper or graphite. My staff has pointed out all of these components, in both varietals. A very good point indeed.
Good call on Hummer v. Metro wine case.
Anxious now to take off rose' colored glasses on the Silverado Trail and see if rainbows fall on Alto Pass instead.
Hey Keith, great article, great point. Finally the voice of reason!. Being on importing side of the industry, it always surprises me, how do domestic wines (cabs especially) end up being so much more expensive than imported wines? And even more mystery is why do consumers are so easily willing to overpay for the wines of an average (if not less!) quality, when for the fraction of the price they could get real treasures! Poor average consumer - he doesn't even suspect, how badly he's being ripped off... so, I salute you and fully support a "boycott to overpriced wines". I mean, with all due respect to old good Cabs, there are so-o many other good, excellent and simply drop-dead-gorgeous wines out there just waiting to be discovered!..
Better said than Marnie Old could ever have put it...
I really enjoyed Mr. Wallace's article. He's very witty and informative at the same time. Look forward to more of his "gems" in the future!
Thank you.
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