Price Remains Major Factor in Buyer’s Perception of Wine Quality

Price often determines the buyer’s perception of quality, which is why St. Supery Vineyards and Winery is going to have a harder time making an impact in the marketplace than it ought to.

The wines of this new, high-image Napa Valley property are very good, but they’re too well-priced. People expect high pricing on good wine from high-image wineries.

Perceptions of the price-quality relationship apply to many items. People feel that if something sells for a lot of money, it has to be excellent or else no one would buy it. They feel anything low-priced must be mediocre; there has to be a reason it’s not expensive.

With some products, you know by performance that a high price is warranted. If you buy a Rolex watch, you know it’ll keep the right time. If you buy a Mercedes-Benz, you’re confident it will get you to the supermarket. Reliability comes as a side benefit to the prestige value.

But with some products, you take the quality on faith; performance isn’t relevant. Wine is like that, especially with some people and some wines. Those who don’t understand wine but feel they have to have the best buy judge wine purely by price. The more expensive the better.

Showy Wine Choice

Restaurateurs love these folks. They have loads of expendable capital and they don’t mind expending it, especially if it is for a good show (i.e., a showy experience in which guests “oh and ah” over the choice of wine).

Restaurateurs who charge $125 for Dom Perignon do so so their moneyed diners can show off. Ordering an expensive wine supposedly shows good taste and a sense of largess, not to mention ego. Dom Perignon is good Champagne, but is it worth a hundred and a quarter? Not in U.S. dollars, it’s not. Yet a lot of it sells at $125. With most buyers, the price covers up for a lack of knowledge that Krug and Bollinger are better and often less expensive.

Some overpriced wine sells merely because a lot of people aren’t sophisticated enough to taste a wine and tell its quality without looking at the price tag. This includes a lot of retail wine merchants and restaurant personnel.

Price-Reflected Quality

Thus they accept the price of a wine as indicative of quality. These are the people who tell you Opus One and Dominus are excellent at $45 or $50 a bottle. (Yet I think Trilogy, Lyeth and Cain Five are better wines--and less expensive.)

(A side note here: the 1983 Dominus was released in March with very little fanfare. Dominus, a joint venture between the John Daniel Society and Christian Moueix of Chateau Petrus, is a big, bold red wine. Frankly, I’m not very enamored of it. It sells for $42.50. In my view, hype sells this wine, not quality. For fans of Dominus, the 1985 version is due out in November.)

Dominus sells out (it makes 4,200 cases) each year, yet many wines that are well-priced are hard sells. Well-priced wines require hand selling by knowledgeable wine merchants and sommeliers--which is one good reason to shop where there are savvy people working, folks who can direct you to the great values.

Yet even the wine writer has a chore convincing folks that a $5 bottle of wine is worth more. People say, “Hey, if this stuff is so good, how come it doesn’t cost more?”

And the answer can be any of a number of things: A lot of it was made and a higher price would slow down its sale; the winery didn’t know how good the stuff would get in the bottle (it is, after all, a living product); retailers improperly balked at an initially higher price so it was lowered.

Inexpensive Value

At a recent tasting of Merlots, the winners were all priced $14 to $16 a bottle, but two of the better ones were inexpensive. Yet selling them isn’t easy because they are priced too cheap to indicate how good they are.

One of the best Merlot values around these days is 1988 Vina del Mar from Chile ($6). The wine has a lovely green-tea aroma embedded in dense cherrylike fruit. You might find the wine a bit simple and soft, but there is ample structure. Considering the price, it’s amazing this wine could be made this well and cost this little.

Another sleeper is 1987 La Playa from the Maipo Valley in Chile ($5). A violet-and-tea complexity in the aroma leads to a new oak-and-mint finish, quite surprising for a wine of so modest a price. It’s a wine for immediate consumption but well worth the price, and a wine that would sell at $10 to $12 if it said Napa Valley on the label.

Threat From Chile

Chile, indeed, represents a growing threat to California’s higher-priced wines since we are now seeing a wave of imports from Chile that represent excellent value.

One of the best is 1982 Cousino-Macul Antiguas Riservas, a Cabernet Sauvignon of gorgeous, regal quality. This wine was made from grapes grown on 50-year-old vines on the stony slope above the Maipo Valley, then aged in oak for about three years. The wine’s fruit and suppleness are exciting, and the aftertaste is akin to a fine Bordeaux.

Now 7 1/2 years old, this wine sells for $9.50. It tastes as if it could sell for twice that; and for people who like a wine with finesse and breed, it’s an excellent buy. But I suspect some people may see the low price and decide that a $14 bottle would be safer.

People like to age their red wine; here’s a red that comes already aged, and yet the price is fair.

Looking for a Foothold

Admittedly, none of the Chilean wines is competition for Chateau Petrus, but as Chilean wines attempt to gain a foothold in the U.S. market, wines like this are going to be undervalued. And that, ironically, makes them a hard sell.

Back to St. Supery.

It is the venture of a Skalli S.A., a major food company in France. In 1982, the Skalli family bought a 1,500-acre ranch in Pope Valley, an eastern spur of the Napa Valley that doesn’t have the name-recognition of Napa property. Four years later, Skalli acquired a smaller parcel of land right on California 29 in the heart of the Napa Valley, not far from stalwarts Inglenook and Beaulieu.

In the last year, the final touches have been put on a new winery and guest house, and the Skallis have spent an estimated $18 million thus far. You’d think that that kind of financial commitment would result in expensive first wines.

Laid-Back Strategy

But St. Supery is going slowly, for three reasons: St. Supery’s vines are young, so the first wines will be lighter than future releases; the new kid on the block can’t expect to get a ton of money for its wines just because it spent a lot making them, and the winery’s chief executive officer knows what the market is all about.

“There’s a lot of competition out there, and we want to show that our wines represent good value,” said Michaela Rodeno, formerly head of public relations for Domaine Chandon and now the driving force behind St. Supery.

The first releases from St. Supery, made by wine maker Bob Broman (formerly of Stag’s Leap), are lovely and elegant and priced well. The 1988 Sauvignon Blanc ($7.50) has a light melon and mild chile aroma. It is delicate and goes well with food. The 1988 Chardonnay ($11) is lightly creamy with a pear aroma and is likewise delicate but should develop with another year in the bottle.

A Cabernet to Come

To be released in January is an excellent, beautifully balanced 1987 Cabernet at $12 that could easily fetch more.

St. Supery might have been persuaded to charge more, but Rodeno noted that for a first release she wanted to keep the price reasonable to show the public what the winery could do.

I feel the pricing strategy is appropriate for this reason: California wineries rarely, if ever, lower their prices from the previous year. Thus prices set for new wines, and increases for established wines, must be considered extremely carefully.

I also feel that the coming surplus of wine in the market, and the resulting weakening of prices, will help St. Supery overcome the natural inclination of people to feel there must be something wrong with products that are reasonably priced.

Wine of the Week: 1988 St. Francis Chardonnay “California” ($9.50)--An attractive pineapple and lemon aroma and a hint of pine give this wine a quite complex scent for so reasonable a price. The taste is relatively broad and rich, but excellent balancing acid and more of the lemony-ness sniffed earlier make it crisp. Many second-label California-designated Chardonnays are hitting store shelves at less than $10 these days; this is one of the better ones.