Tasty American wine under $12: why so little of it? Industry replies, part I

Drawing on the New Yorker profile of Fred Franzia, champion of wine under $10, last week we pondered the puzzle of why so few low-cost wines–say under $10 (or, perhaps, $15)–made in America are just not tasty. By contrast, several imported wines in the price range have appeal despite having to be transported and pass through the importer’s company as well.

Over 30 of you had your say in the post from last week. So I decided to put the question to several people in the trade. Today, we hear from Patrick Campbell and Veronique Drouhin Boss. Patrick Campbell of Laurel Glen Winery in Sonoma makes a tasty $10 California wine, REDS, billed as “a wine for the people.” Veronique Drouhin Boss is the winemaker at Domaine Drouhin in Oregon and is co-winemaker at her family’s negociant house in Burgundy, Maison Joseph Drouhin, which a Beaujolais Villages that is particularly lip-smacking in 2007 and is widely available for $9.95. Tomorrow, we will hear from an American wine importer with his views.

Question: why are there so few good American wines under $10 (or slightly higher) while there are many more imports at that price point?

patrick_0Patrick Campbell, Laurel Glen and maker of REDS (find this wine)

I think the answer is pretty easy: we begin with vineyards rather than bulk wine.

1) We pick out vineyards we want to farm, and which, based on experience, we know will work together in the final blend. The vineyards can’t be located in the prestige areas, because their fruit would be too costly. So we scout out other areas, particularly in Lodi, where the grapes are affordable, the vineyards well established (one vineyard we farm is 120 y/o), and the production limited by the good farming practices.
2) We avoid expensive grapes like cabernet or pinot noir
3) We ferment the grapes in rented facilities, so we avoid overhead costs.
4) We age the resulting wines in rented facilities, ditto.
5) We use neutral barrels, at $50 per barrel, rather than new barrels at $500 – 1000 each.
6) We make big enough volumes (about 12,000 cases a year) to secure reasonable costs on supplies.

imageresolverWhy don’t we use bulk wine like most copycat RED-themed labels or brand du jour bottlers do?
1) because we want consistency of style, not some concoction of whatever mélange of grapes is currently in over-supply on the bulk market
2) I like working with vineyards, and I really dislike tasting through hundreds of samples of bulk wine to find a few tolerably good wines, that may have already been sold by the time I got the samples
3) And so on……

veronique_drouhinVeronique Drouhin Boss, of Domaine Drouhin Oregon and Maison Joseph Drouhin (find the Drouhin Beaujolais Villages; about $10)

I am not sure I have an answer to your question but reading through the various comments I didn’t see anyone, except Paul Gregutt, mention the importance of where the grapes actually grow (we call it terroir) and vineyard yields.

All over France great wines are being produced, many different varieties but all growing in the region they should grow or do well. The home of Gamay is Beaujolais, the home of Pinot is Burgundy. This is an important fact to start with. Secondly: it is no secret that the more you ask a vine to produce the less good the wine will be. I believe when money drives everything then to produce a $10 bottle of wine expecting high return you need big yields. Quality can’t be there. In France, by law, yields are controlled. In a given area of production you can not produce more than what is allowed. To my knowledge it is not the case anywhere in the US, or any new world producing regions.

So the trick to produce a good $10 bottle of wine is: choose the right place, control your yields, the cost of production and do not expect to make big margins.

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21 Responses to “Tasty American wine under $12: why so little of it? Industry replies, part I”

  1. Campbell’s response was honest and detailed. It’s important to understand what you have to sacrifice to make a 10 dollar bottle of wine, and he is walking the lines of compromise vs quality as good or better than anyone in the industry.

    As for Veronique, I’m not sure she actually said anything that has to do with the economics of a $10 bottle of wine other than don’t expect big margins. If the key is simply to grow in Beaujolais with low yields, then why isn’t every wine coming out of there as lip smacking as hers?

  2. Patrick Campbell knows of what he speaks as he has been producing really good wines that offer excellent value for years. By focusing on making very nice wines at very affordable prices, he has made Laurel Glen and Great Value synonymous. Too bad there aren’t more like him!

  3. I think Campbell gives a more in depth and insightful answer, but Drouhin makes a great point about margins. A lot of the “newer” regions that are trying to break into the American market are willing to forego margins to build a consumer base in The US – Chile, Argentina, and Australia circa mid 90s are all/have all done this.

  4. I also agree that Patrick Campbells comment is excellent. Ms Drouhin Boss, less so, I am honestly not sure that terroir has that much to do with this. However the margin comment is 100% right on. I also understand the market gaining and growth comment , but Australia and Chile have a firmly established market here they have been around for quite a while… they still produce wines in the $7-10 range that knock the socks off American competition, this week I am drinking some McWilliams shiraz that i paid $8.99 on sale… it is very nice… not just juice. Not to mention the next price point of $10-20/bottle there are Barossa Valley reds that are every bit the match of Sonoma or Napa reds that cost a lot more. So my uneducated guess is they must be getting some export type of subsidy, whether it is cheap financing, tax breaks, etc. as that would offset any lower margins they are working on… ?

  5. Part of the reason there are so few CA wines at a low price point likely has to do with the cost of real estate, and the fact that real estate taxes go up only when a property sells (legacy of Prop 13, so new buyers subsidize long-term landholders). Look at a good low-price-point French wine. How long have the proprieter been making wine? Twenty to thirty years in many cases, and they often have taken over the family business. Amortized land costs are minimal. Quite different in Napa, and someone had to pay for it, usually at bubble prices with borrowed money. California wine is like California houses – you can get a lot more for your money by going elsewhere.

  6. So, from what I read, essentially most of the “cheap wine” is made by using poor quality bulk wine and selling this plonk in the $10 range. High volume, low cost= profit.

    This is also done in Europe and can be found in any supermarket for about the price of 2 Buck Chuck or less.

    Neither answered the question as to why Americans refuse, for the most part, to make good quality wines at all price points.

    The case with Drouhin is interesting as I like their wines, but never buy their US Pinots as they are outrageously priced compared to what you can get in their Burgundy portfolio for far less money. Why are they charging $40 and up? Because that’s what Americans are willing to spend. Why, I don’t know.

    The reason is because they (the winemakers/conglomerates)have been able to get people to buy the plonk for $10-15 and even up to $20 if you look at alot of the watered down awful merlot. Americans have gone for the “big fruit, high alcohol wines” and this formula is easy to create without terroir, etc…

    I don’t buy the “land is expensive and costs are prohibitive argument” at all. Owners are looking for a quick return on their investment and have evolved ways to achieve this with poorly made wines, that unfortunately the American consumer has been willing to buy.

    If the consumer stopped buying this stuff, it wouldn’t be on the market. And if owners couldn’t make a go then they’d be forced to either lower prices on the plonk, increase quality for the same price, sell, or put the land out of production.

    Personally, I buy very few American wines at all. Aside from the fact that many are made in a style that I don;t enjoy “big fruit, high alcohol, no balance, poor pairing with food, I find very little of value that tempts me to buy. I’m not saying that they don’t exist, but…

    California/Washington Cabs, Oregon/Washington Pinots are way over priced. Even when I find a decent Cali Cab for example in the less than $20 range, I can always find a much better Bordeaux, even classed growth for the same price or less. The equation with Pinot Noir or Syrah is even worse. Try finding a decent under $20 Oregon/Pinot. It’s almost impossible. However, I can find many Burgundy in that price range that are terrific.

    I love Zinfandel, but buy very little because the cost to get a decent one is ridiculous.

    Ultimately, it comes down to the consumer. As long as they are willing to accept and buy the plonk at $10 and pony up big $$ for the better examples then they will continue to be provided with what they “ask for.”

  7. Perhaps, just perhaps, the answer is a little more basic and unseemly – greed, the same thing that precipitated our current financial crisis. A large number of American wineries are now owned by public corporations whose modus operandi is to maximize profit – something you cannot do if you charge too little for your wine. Unfortunately, I think that maximizing profit is ingrained in American business culture, even if the winery is not publicly held. Now before all of you object, yes, I know there are examples of American wineries who put quality and accessibility above pure profit, and they are to be applauded. Unfortunately, they appear to be few and far between.

    If the United States is to have a sustainable wine culture, it is very important for there to be a viable market of low-cost, quality wine. Most people simply cannot drink wine on a frequent basis if they are paying $15 to $20 a bottle all the time. So if American wineries want to cede this market to foreign competition, we will continue to drink the quality low cost wine of other countries (anyone notice how good ignoring low-cost, quality foreign competition was for the American automobile industry?…).

  8. […] There is quite a lively debate going on Dr. Vino’s Wine Blog about why there is so little quality inexpensive American wine (under $12). Jump into the debate here: Tasty American wine under $12: why so little of it? Industry replies, part I […]

  9. […] Tariquet Sauvignon (find this wine) in my book, A Year of Wine, as one of 10 great wines under $10 (REDS from Patrick Campbell was also […]

  10. […] Tariquet Sauvignon (find this wine) in my book, A Year of Wine, as one of 10 great wines under $10 (REDS from Patrick Campbell was also […]

  11. It doesn’t seem to be too confusing of a question. As the quote goes, “nothing extraordinary is achieved by ordinary means.” When your goal is to produce the lowest cost wines possible, you have to make profits through high volume. The issue with high volume is that the numbers are the only extraordinary thing about it–at higher levels of production quality assurance drops and you can’t have the same attention to detail you would at smaller yields. It’s the difference between ordering a fast food burger, or buying all the ingredients and taking the longer time to make one from scratch. What Mr. Campbell seems to do is strike a balance, by not going so extraordinarily high in volume that he sacrifices his ability to have control over his vineyard selection and fruit sourcing.

  12. Gary wrote, that Neither answered the question as to why Americans refuse, for the most part, to make good quality wines at all price points.

    I can’t speak for the entire American universe of wine producers. I can speak only for myself, which I did.

    What is perhaps the more interesting question is Why do Americans in general agree to drink the sort of boring wines that are the topic of this discussion. Fortunately, there is a sufficient number of them that I can stay in business with REDS and Terra Rosa, which some of the commentors here seem to agree defy the trend.

    As for the Kacher’s comment about $10 cost per bottle to produce a top quality cabernet from Sonoma or Napa: I would be happy to go over the numbers, but this is a different discussion.

  13. Sorry – I hit the Submit button too fast! The second sentence of the third paragraph should read: Fortunately there is a sufficient number of Americans who demand interesting wines in the $10 range that I can stay in business with REDS and Terra Rosa, two wines which at least some of the commentors here seem to agree defy the trend.

    And back to Gary’s comment: the original question correctly referred to American wines, not American winemakers.

  14. I beg to dis-agree with the question entirely. There are plenty of american reds under $12.00 that are much better drinkers than any wine from France, Austrailia or Chile..They do make good wines but, the differeence is the american winemakers understand the american palate and make the wines accordingly..Please just look at 2 buck chuck…..to mention only the largest.

  15. Sorry, but I can’t get 2 buck chuck into my mouth without gagging. That’s no place to start.

  16. Patrick Campbell makes very drinkable ten and fifteen dollar wines (see his ZaZin for an affordable and enjoyable $15 version of Zin).

    What I don’t get in this conversation is the avoidance of the fact that there are plenty of wines in that price range that are competitive with Patrick’s wine in QPR.

    This whole conversation, and the comments by the otherwise astute Bobby Kracher, simply miss the boat by a mile.

    Here is a list of very good Zinfandels under fifteen dollars. Go buy them and them come back and tell us what you think.

    Peachy Canyon Incredible Red, $12
    Renwood Cranky Old Vine, $10
    L by Lyeth Sonoma County Zin, $11
    Carol Shelton Zinami $15

    And for an even more interesting treat, step up a buck to Easton Amador County Zinfandel, $16.

    Now, if you asking for a $10 Napa Valley Cab that tastes like anything, then you are barking up the wrong tree. That would be as silly as asking for a good $10 rated Pauillac or a $10 Bonnes Mares.

  17. […] thinking about the topic brought up by Dr. Vino (see: Tasty American wine under $12: why so little of it? Industry replies, part I, and Why so few tasty American wines under $12? Wine importer Bobby […]

  18. I love this topic!

    Mr. Campbell-

    I appreciated your comments about what you are doing but if you have any comments on why this topic even exsists that would be awesome! The fact that california has this throw as much plonk on the market and we’ll see what sells attitude really makes me angry. What is it with the value wine business(wines under $20) out there that refuses to take a hard line on creating wines of character,taste and balance? You can tell immediately on so many of these wines that they are products of the winemaker and not the vineyard. “A spoonful of sugar and oak makes the vino go down.” Imports are crushing domestic wines in the value category and they sail across oceans. Pretty sad if you ask me.

  19. […] SPIT: California bargains Mike Steinberger contemplates the puzzle of why so few “superstar” winemakers in California make wines under $20. We discussed the lack of tasty California values last year in relation to Fred Franzia, and heard from wine importer Bobby Kacher and winemaker Patrick Campbell. […]

  20. Even more in evidence is if you look at the international mareketplace. I have done shelf surveys in France, Spain, Portugual, China, Thailand, Australia, and New Zealand. And pretty much ‘nobody’ is buying/drinking American wines. And we wonder why…

  21. […] There may be hope. Chambers Street Wines recently offered the wines of Chris Brockway’s Broc Cellars calling them “Californian vin de soif,” including his 11.9% alcohol cabernet franc. Hirsch Vineyards has the ebullient, crackling Bohan Dillon 2009, a 13.1% pinot noir. Sommelier Raj Parr is teaming up with Arnot-Roberts to make a gamay. The trouble with the first two examples is that they are north of $25, so there’s only so much thirst one can quench. We have discussed California’s value challenge before several times. […]


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