It's all about the Grapes

The cost of land in Napa Valley is astronomical. Pick a number. Throw in a couple of zeroes at the end, and it's even more than that. And that is only the beginning.

Ever wonder why Napa Valley wines are so expensive?

Could it be because of the cost of real estate? How about the cost to plant and manage a vineyard? How about the cost for a wine maker and to make the wine? How about special taxes? Do you think the cost of distribution is a factor?

Yes, to all of the above. Each item is pricey. And, it all adds up.

All of the great California Cabernets come from Napa Valley. That includes Harlan, Araujo, Screaming Eagle, Bryant, Colgin, Grace, Beringer Private Reserve, David Arthur Elevation 1147, Shafer Hillside Select, Opus One, Dominus, Phelps Insignia, Vineyard 29, and on and on. Yes, every wine mentioned retails for well over $100 a bottle. If you want great Cabernet, you've got two choices on the planet: Napa Valley or the left bank of Bordeaux.

The cost of land in Napa Valley is astronomical. Pick a number. Throw in a couple of zeroes at the end and its even more expensive than that. Yes, through the roof. Try an apartment in Manhattan on 5th Avenue, near the Met, and now you're in the ballpark.

That's only the beginning.

Try permitting and planting a plot of land. Remember this is California, the land of fruits and nuts where not only the State but every county, city and local agency has a special tax. It might be easier, as Bill Cosby once said in describing the pain of pregnancy, “to try pulling your lower lip over your head”.

When you are ready to plant, you need great rootstock--yes, very expensive.

And you need a great vineyard manager. Yes, vineyard managers (Jim Barbour, David Abreu, David Pina) are all expensive in Napa Valley.

Then you wait three to four years before you have any fruit that is worth making into wine. All the while, you're still paying your vineyard manager to maintain the vines.

Great grapes, required for great wine, require structure and tremendous concentration. The theme in the vineyards is thin, thin and thin some more. Canes and shoots are eliminated and fruit is dropped constantly. Yields are low in the valley and lower still on the hillsides, so the grape is tastier and will make better wine. After all, as is often said and is so very true, you can't make great wine without great grapes.

When the grapes are ready to be picked, you hire the best wine makers (say Heidi Barrett, Philippe Melka, Pam Starr or Helen Turley, rock stars all of them). And yes, you pay through the nose for the privilege and maybe then you're ready to start making wine.

Of course, you either need your own wine-making facility, you don't even want to know the cost, or, you custom-crush at an existing facility. Think that's cheap?

After the grapes are crushed and the juice fermented, you then need to age the stuff--sometimes for two or three years--usually in new French oak.

Guess what? Today, the cost of a new French oak barrel is $950. At 60 gallons per barrel you get roughly 300 bottles of wine. That adds over $3 a bottle to the cost of the wine just for the privilege of being in the barrel.

Throw in a little glass, some graphic design, a label, and a cork, and now you've got the bottle of wine. I think you get the very pricey picture.

Of course, there is one more significant factor. The distribution system in almost every state in the US is a three-tier system (for this, you can thank the alcohol distributors and their lobbyists).

This means, the wine maker frequently sells the wine to a distributor, who sells it to a retail store or restaurant that sells it to you. Think there is a little bit of a mark-up there? In this distribution system, the winery generally receives only 50% of the retail price. Ouch.

So when you curse the winery for charging you $100 for that bottle of wine (you wouldn't do that would you?), even though, you have to admit, the juice was pretty damn good--remember that if you bought it in a wine store or a restaurant, not in California, only about $50 of that price actually went to the winery.

Yes, Napa Valley Cabernet is expensive. Is it worth it? YOU BET!!!