Screaming Eagle (logo to left) is a good example of what is commonly called a "cult" wine. Cult wines are made in minuscule quantities and sold at very high prices to a select mailing list of people with very high disposable incomes (or who are investing with no intent to drink). There are probably one or two dozen California wines that can truly be called "cult" wines.
Although scarcity and exclusivity play a part in their mystique, there's no doubt that in order to become a cult wine the product has to be exceptional. It costs a lot to produce these cult wines, but at $350 and up per bottle, they probably still have very high profit margins.
Below the rarefied atmosphere of cult wines are a much larger number of what I term Ultra-Premium wines. The grape growing and winemaking techniques used to produce these wines are similar to those used to produce cult wines. They just haven't found that certain something that creates the cult following.
These wines usually sell for $100 to $250 per bottle. That's still a lot of money for a bottle of wine, but the profit margins are much lower. Why? The production costs are similar to those of cult wines, and there can be substantial sales and marketing costs. These wineries don't necessarily automatically sell out releases to their mailing list.
Ultra-Premium Value Wines
An interesting sub-category of Ultra Premium wines that I call "Ultra Premium Value wines". These are produced using the same grape growing and winemaking techniques as other Ultra Premium wines. The difference is that they sell for under $100 per bottle. This is the category where Charnu Winery fits.
So how do we hope to make any money? There's no magic involved. If you're going to sell for less, your costs need to be lower. Does this mean cutting corners. No, it doesn't.
Let's use an analogy. The Sveid Corkscrew shown to the right can be yours for only $71,000. If your goal is to be exclusive, then this product is perfect. Probably none of your friends has one. But if your goal is to open a bottle of wine, you can accomplish the same objective for less.
Similarly, in grape growing and winemaking there are often multiple ways of achieving an objective. Making an Ultra-Premium Value wine means that you need to be careful about the choices you make at each step along the way.
In future articles, I'm going to talk about some of the major factors that go into making an Ultra-Premium wine. As I do, I'm going to discuss some of the choices involved, and explain at least one way of making an Ultra-Premium Value wine.
Am I boring you, or do you find the subject interesting? Let me know, one way or the other.