J Cuvee 20 Brut NV

Mmm.... I'm not normally a fan of sparkling wines, but this wine was right up my alley. Apple and yeast, with toast on the palate. The acidity is at just the right level -- a delicious wine to share! Three and a half out of five stars.

The "hollow middle" and wine.

One of my favorite blogs has an article that mentions another of my favorite topics, the "Hollow Middle." I'll let Mr. MacEwen sum up the "Hollow Middle" model:

"An increasingly prevalent industry structure sees firms migrating both to the high end, high-value, premium quality level, and to the no-frills, low-end, commodity level, with little comfortable territory remaining in between."

As an example, Mr. MacEwen points to jug wines and Screaming Eagle -- wines at the extreme ends of the price spectrum. Oddly enough, I've been thinking about the same thing lately due to an ongoing debate on Wine Spectator's various blogs (see here, here and here) about the skyrocketing prices of new releases or the lack of value from some regions.

So, why have I been thinking about this issue with regard to the price of new releases of wine? I think we may be seeing the creation of the Hollow Middle in the wine world. First Growths and Cult Cabs are pushing the prices for new releases into the upper $100s -- if some producers haven't reached the four digit price range yet, they are approaching it. So, what does this mean for the rest of the market?

First, for the "premium" wines, it raises the ceiling on the asking price on release. For example, Penfolds Grange currently releases at $250 a bottle. A Clarendon Hills Astralis releases at $350. If the top bottles from other countries release at at least $500, where does that enable producers to move the price on these bottles to? If the market for First Growths and Cult Cabs is sustainable, those producers have a few $100s they can add to the price of a bottle.

Second, for the "commodity" wines, they can continue to exploit a market for everyday consumption. A $20 or $10 (or cheaper) bottle of wine is a bargain by comparison to a $500 wine.

So, what happens to the mid-range producers who cannot compete at a few hundred dollars a bottle? Consider someone who produces wine that costs $75 a bottle -- They can't compete (in terms of perceived quality or investment potential) with a "premium" wine. If that producer happens to be located in a region with high production costs (e.g., Napa Valley) -- costs which will continue to increase (e.g., illegal immigration crackdowns) -- he or she cannot reduce the price for each bottle of wine to match those producers whose wines retail at $10 to $25 a bottle. In effect, the mid-tier producer gets squeezed. Thus, thanks to increased globalization and the Hollow Middle model, we may be on the verge of some major changes in the wine market. Will the mid-tier producers be around ten years from now? Maybe not....

Economics and wine.

I have been thinking a lot about the economics of wine -- everything ranging from pricing strategies for premium wines, to changes in immigrant policies on the price of wine, to the effects of the current market uncertainty on wine auctions. I'm going to focus on the last issue for this post.

Wine auctions are one of the few places one can buy older vintages of first growths and other "exceptional wines." Lots frequently sell for thousands of dollars and, should one of those lots include a case of older Romanee-Conti, the prices can get astronomically high. Needless to say, these auctions are at the height wine consumerism.

But, if the market is getting tighter, or there is a slow down, shouldn't that be reflected at wine auctions? Numbers from the first-half of 2007 appear strong -- but that would be expected, as those auctions were held before the subprime market crunch. So, as a potential sign of the economy's health and a sign on the current the wine market itself, I'm curious to see how the following questions play out:

(1) By percentages, how many lots are sold in Fall '07 compared to Spring '07?
(2) How many lots have their reserve option exercised, preventing the sale?
(3) For comparable wines, what are the prices sold in Fall '07 compared to Spring '07?
(4) By percentages, how many lots are sold to foreign investors in Fall '07 compared to Spring '07?

A downturn in 1-3 and an uptake in 4 could be a harbinger of things to come....

Distracted from wine.

I know I'm passionate about wine... and I just threw a really fun wine party tonight (I've mentioned it before). I've enjoyed two wines tonight that would normally leave me thrilled and amazed.

But, I'm not thinking about the wine. What does it mean when a "lovely young lady" is on my mind, rather than the exceptional wine I just enjoyed????

Grgich Hills Paris Tasting Commemorative Chardonnay 2003

Birthdays are a great time to celebrate. Last night, I had a small, intimate celebration -- just a "lovely young lady" and I -- and we opened a bottle of the Grgich Hills Paris Tasting Commemorative Chardonnay 2003 with dinner. This was a special wine for me, and it probably deserves a little story before I get onto the tasting notes.

Grgich Hills was founded as a joint venture between winemaker Mike Grgich and the Hills Brothers. Mike Grgich, before starting Grgich Hills, had worked for numerous Napa producers, including Chateau Montelena. At Chateau Montelena, he crafted a Chardonnay which Steven Spurier then included in the 1976 Paris Tasting -- which won the top white. Thus, this bottle that I opened commemorated this event -- making it a perfect bottle to celebrate another 30-year "anniversary."

As for the wine itself, it had no signs of oxidation and a beautiful golden color. The nose had elements of citrus (mostly lemon) with a touch of peach and maybe mango. The body was rich and moderate acidity. Golden apples dominated the palate, with the finish transitioning smoothly to hazelnut. A bottle that I've dreaded opening -- simply because I knew I could never get another one -- but glad I opened with the right person on the right night. Four out of five stars.

30th Birthday

I was born in 1977 which, sadly, was not a great year for wine. Well, unless the wine happens to be Port. So, trying to find some wine with a "30" theme to open for my birthday has proven tough (and expensive). But, why should I let that stop me?

So, two days after my birthday I'm throwing a small party, and I'm opening some wines that have a 30 element or that I have a special appreciation for. First, a Beaulieu Vineyard Georges de Latour 1977 Cabernet Sauvignon -- the only table wine from my birth year that I've been able to find! For whites, I'm planning on opening both the Grgich Hills and the Calera 30th anniversary Chardonnays. At this point, people will be nice and sloshed, and the table wines will shift to the Dom Martinho Quinta do Carmo -- I wine a first tried while eating at a cafe on the Douro river during my 28th birthday trip. And then, the final wine for the night: a 1977 Graham.

Ok, it's not a trip to Bordeaux, but it will be one hell of a 30th birthday!

Turnbull Oakville 2002 and the Right Tasting Experience

There is a famous study where a mid-range red wine was given to two groups of test subjects. For the first group, the wine was poured from a bottle suggesting that the wine was from a lower grade producer. For the second group, the wine was poured from a bottle suggesting that the wine was from a higher grade producer. Maybe not so surprisingly, the first group thought that the wine was not as good as the second group thought. Basically, one's perceptions can influence how one enjoys a wine. Similarly, some wines just seem to taste better when they're opened with the right person under the right circumstances. Expectations make everything.

Last night, I brought a bottle of Turnbull Oakville 2002 to a dinner I had with a very lovely young lady (who's also a bit of a smart ass -- in a good way). The wine itself was very nice. A lovely purple, with chocolate and blackberries on the nose. The palate and tannins were rich and vibrant, and the aftertaste was lush. A very enjoyable bottle. Of course, I wonder -- did I enjoy the wine for the wine, or did I enjoy it because of the great company I had? I suspect the latter played a strong part....