Say hello to Forty Buck Chuck

By Corie Brown

Nov. 1, 2006 12 AM PT

Times Staff Writer

THE bottle of Waterstone Napa Valley Cabernet Sauvignon looks like most high-priced California wines. The glass is heavy and the label is simple, classic, with an etching so small and discreet you can’t even tell what it is. The price tag: $25.

But you won’t find a Waterstone winery in Napa Valley or anywhere else. It’s not a winery in any traditional sense. Unlike most of the appellation-specific California wines you find at this price point, what’s inside this bottle is bulk wine.

Bulk wine is leftover wine. It’s the wine that, for whatever reason, wasn’t used by the winery that produced it. Some of it is finished wine made to the highest standards and aged for a year in French oak barrels. More often it is freshly crushed and fermented wine offered for sale after harvest.

A new breed of bulk wine brands is challenging the category’s second-class status by using only top-quality bulk wine. The brands are positioned to stand shoulder to shoulder with more prestigious California wines, perhaps even being mistaken for something they aren’t.

Most top California vintners make more wine than they can sell under their own labels. “It’s insurance,” says Doug Shafer of Shafer Vineyards. “We always crush more grapes than we bottle.” It allows the winery to select the best wine lots for its top cuvee.

Some wineries roll their excess wine into second-tier labels. (Harlan Estate inaugurated the Maiden with the 1995 vintage for that reason.) Other wineries sell their excess wine directly to larger wineries to be blended into those wines.

The rest goes to the bulk market. When there’s an abundant crop, Shafer says, the bulk market overflows. Shafer typically plans to produce 15% more wine than he needs. With the 2005 vintage, he had 30% more wine than he could use. “We had to sell it off as bulk,” he says. “We knew we’d lose money, just trying to get our costs back.”

Turning excess wine into marketable brands is the role of negociants. Like negociants in Burgundy, France, they buy wine made by others to create blends sold under their own brand.

In California, where vineyard holdings are larger and vintners can easily produce their own brands, negociants work the fringes of the market. And it can be a challenge.

“You can’t sell wine without a story for much more than $10,” says Glenn Knight, an owner at Wine House in West Los Angeles. A different story is fueling the sales of these new high-end negociant wines, he says. It’s the rumors about the provenance of the wine.

Every wine lover has heard the tale of the $20 bottle of wine that, if the real story were known, actually contains prime juice from a prestigious Napa Valley winery that sells its wines for $100 a bottle. Faced with an unexpected surplus, the winery dumped wine at fire-sale prices. It’s all a big secret, but your friend has a friend who told him it’s true.

Whispering Dove, a tongue-in-cheek label poking fun at California’s most expensive Cabernet Sauvignon, Screaming Eagle, first appeared three years ago. Its first two vintages, 2001 and 2002, contained wine from a single well-known Oakville producer, says Jim Myerson, president of Wine Warehouse, the wine’s distributor. Myerson’s brother, Allen, is the negociant who created the brand.

The label boasts the Oakville appellation, but Myerson is mum on the identity of the producer. While wine sold under the producer’s own label retails for more than $100 a bottle, Myerson says he’s been able to sell 2,500 cases of each vintage of Whispering Dove for $30 a bottle. It wasn’t exactly the same wine, he concedes; it was wine that didn’t make the cut for the producer’s premium label. But, he says, it was vinified to the same standards from grapes grown in the same vineyards.

As so often happens with negociant wines, the original Oakville source dried up. The 2003 Whispering Dove now on store shelves bears a Napa Valley Stags Leap District appellation. Still, they have already sold most of the 3,500 case production, Myerson says.

There are only a few of the new breed of negociant wines priced as aggressively. While there are bottles priced as high as $42, most are priced under $25 and some retail for as little as $13 to $15. Traditional negociant brands are priced below $10. Trader Joe’s shelves are crowded with negociant wines, according to industry insiders.

Hidden from consumers

FOR consumers, the differences between these wines are impossible to read on the bottle. The source of the wine is always kept secret.

Prestigious producers don’t want their names associated with wine they’ve chosen not to sell under their own label, says Karen Mancuso, a bulk wine broker who specializes in selling small lots of wine from top-tier California wineries. Negociants are required to sign nondisclosure agreements whenever they buy these wines.

“Image is so important in wine,” says Joe Ciatti, California’s largest bulk wine broker. “If you lose it because the consumer feels he can get the same wine for less, you are vulnerable.”

Even though some of these higher-end bulk wines are priced as if they are superstars, the wine that goes into the bottle is relatively inexpensive because of the no-tell policy. The most expensive bulk wine rarely costs more than $25 a gallon, according to bulk wine brokers. Today, it’s easy for negociants to find high quality, finished wine on the bulk market for less than $20 per gallon, which is equivalent to five 750-milliliter wine bottles.

Negociants can get rich quick with a successful brand. Last year, wine industry behemoth Constellation Brands paid $42 million for the 3-year-old Rex Goliath brand. There was no winery or vineyards; a red, white and blue label of a rooster was the key to selling 500,000 cases of $7-per-bottle California wine.

The team behind Rex Goliath -- winemaker Barry Gnekow and marketer Bill Leigon -- created the $10 Cycles wines two years ago. Now they’ve launched Huntington, a $15 brand, and Calistoga Cellars with a $30 Napa Valley Cabernet Sauvignon. “We keep reaching for higher quality,” Leigon says. And why not? “There is now much more juice out there to work with at the high end.”

Even when a California negociant spins straw into gold as he did with Rex Goliath wines, Leigon says there is little respect for negociants here. “It makes marketing these wines tricky,” Leigon says. “Most people hide the fact that these are negociant wines. I’ve tried to create a different story. It’s the story of the brilliant blender.” In Leigon’s case, that’s Gnekow, who scours the bulk wine market, tasting everything that looks interesting as soon as it’s available.

Gnekow often sits down in Mancuso’s library of wine samples in the evening, tasting and tinkering with possible blends until the early hours of the morning. He’ll leave an order on Mancuso’s desk for her to process in the morning. “We’re a subculture that most people don’t understand,” Gnekow says. “Everything we do runs counter to the image of California wine.”

Most of these blenders don’t have the magic touch. A Los Angeles Times tasting panel sampled 21 negociant wines in this high-end category. None of them met expectations. Many were badly flawed. A couple of the less expensive wines were drinkable; the expensive wines were not.

It’s all a matter of taste

NEGOCIANT wines can be made from any grapes grown anywhere. While the rules are the same for all California wines -- for a specific appellation, 85% of the wine must come from that district -- that’s really all a consumer knows. A fabulous cult winemaker could have made the wine. Or it might come from the garage of a grower who turns his unsold fruit into bulk wine using rented equipment.

And then there are additives such as tartaric acid and grape concentrates marketed under names such as Mega-Purple. Adding grape-based acids, sugars and coloring to mask deficiencies is allowed in all California wines. With bulk wines, these additives are a necessary part of the blending process, Leigon says. “There are better bulk wines because of technology.”

Most consumers don’t know the difference between a negociant wine and a wine controlled by a vintner from vineyard to bottle, retailers say. The more ambitious negociant wines sell if consumers like the way they taste, Knight says.

Cameron Hughes sells his wines through Costco, e-mailing customers to announce the latest addition to the portfolio. “This hurly burly Barbera will knock your socks off,” he wrote in a recent e-mail. “We only have a couple hundred cases, so get it while you can. Sourced from a winery who sells a slightly different blend for just under $40 a bottle.”

Waterstone Winery’s website features pictures of bucolic vineyards, but the wine company doesn’t own a single acre, much less a winery. Trying to turn this into a virtue, the site explains that Waterstone “focuses on the wine itself rather than the accumulation of land and facilities.”

It seems to work. Waterstone has grown quickly. In 2000, it produced 3,500 cases of wine and this year will produce 20,000 cases priced near $20 a bottle, using a combination of bulk wine and wine the company makes from purchased grapes.

“We don’t want to have too much wine,” winemaker Philip Zorn says. With a virtual winery, there’s no bricks or mortar to mortgage for loans to help them survive that mistake, he says.

Dan Goldfield sold the excess production from his respected Sonoma winery, Dutton-Goldfield, on the bulk market until he signed on to make wines for the Oriel collection, a recently launched brand that markets and distributes wines produced by an international collection of winemakers.

The deal allows Goldfield to capture his excess wine in a second label priced at $25, less than his signature Dutton-Goldfield wines. He buys bulk wine to fill out the blend, he says.

“It’s an interesting game,” Goldfield says. “Every year is different. And the best wines are the stuff that comes up when it’s time to bottle. You wait for the great juice. It’s a game of chicken.”

For the consumer, it’s more like blindman’s bluff.

corie.brown@latimes.com

(BEGIN TEXT OF INFOBOX)

A tasting of high-end bulk wines

THE Times Tasting Panel met last week to assess negociant wines; that is, wines created by negociants with wine purchased either directly from other wineries or on the bulk wine market. The wines, which sell for $11 to $42 per bottle (suggested retail) were tasted blind.

Joining me on the panel were restaurant critic S. Irene Virbila, columnist Russ Parsons, food editor Leslie Brenner and assistant editor Betty Hallock, along with Kyle Meyer, wine buyer for the Wine Exchange in Orange.

The wines were beyond disappointing -- most were worse than mediocre and many were undrinkable. Virbila described one Cabernet as having a “skanky vegetal smell,” another as smelling like “moldy undergarments.” Hallock described a Chardonnay as having a “sickly sweet” aroma and a bitter finish, and a Pinot Noir as flat and short with a cabbage aroma.

Many were what Meyer called “doughnut” wines -- wines with empty mid-palates; some tasted as though they had been artificially ratcheted up with acid. Others tasted like cheap juice that had been doctored with grape concentrate. Many were over-alcoholic.

The overarching criticism from the panel was that these wines tasted “made,” as though they had been assembled from spare parts, with most missing a part or two. The panel was asked to score the wines from one to five, five being best. The average score for all wines and all panelists was 1.5.

The panel found only two wines to be acceptable. The 2004 Castle Rock Napa Valley Reserve Cabernet Sauvignon ($17) delivered cherry and blackcurrant aromas and a pleasing chewy texture. The 2003 Waterstone Napa Valley Merlot ($18) had aromas of plum, chocolate and fresh-cut wood, some fullness in the palate, but a rather tart finish.

Otherwise, it seemed pointless to include tasting notes for these unrecommended wines. Prices shown are suggested retail.

Corie Brown

2004 Oriel “Dylan” Chardonnay, Russian River Valley, $25

2005 Cameron Hughes Lot 20 Chardonnay, Russian River Valley, $11

2005 Castle Rock Reserve Chardonnay, Russian River Valley, $15

2005 Waterstone Chardonnay, Carneros, $18

2005 Calistoga Cellars Chardonnay, Napa Valley, $22

2004 Waterstone Pinot Noir, Carneros, $20

2005 Castle Rock Reserve Pinot Noir, Russian River Valley, $17

2005 Oriel “Jasper” Pinot Noir, Sonoma Coast, $25

2002 Huntington Cellars Merlot, California, $17

2003 Waterstone Merlot, Napa Valley, $18