Wine Pricing

www.farella.com

What$ in a Bottle

Wine pricing is weird.  You would think it would be a little common sense, a little accounting and some supply and demand principles.  The truth is, those are some of the weakest aspects of wine pricing.  For a fabulous treatise on the subject, read Linda Murphy's SF Chronicle article here.

I find that people are always surprised by our pricing, that they are not so very high as many other small Napa Valley estates.  Usually, our pricing is in line with much larger and widely-available brands.  Why is that?  After all, we put a great deal of personal attention, skill and expense into every bottle.

The first and easiest answer is that we have been blessed to have our beautiful vineyard since the time when gas prices were well under $1.  Another factor is we don't have the marketing "upkeep" that many wineries do.  We grow our own grapes which keeps costs down plus we have less shipping costs as a result.  Really, though, the biggest reason is that we aren't really trying to blow away the competition with monster wines at monster prices.  We like the customers that we have had for 20 years and we aren't looking for the trophy hunters.  After all, today's trophy hunter customer is tomorrow's statistic.  There's always another new trophy brand that catches their attention.

Wine scoring is a distorting factor in this business.  While it's a wonderful thing to have a high score that leads to quick cash, it may not be a sustainable approach for the long haul.  We really are aiming our style - and pricing -  at restauranteurs and other lovers of food and wine.  With an eye towards restaurants, fair pricing means lower prices on those high markup wine lists.  We aspire to sell two bottles instead of one for a fine meal.

The biggest surprise to me is that people seem to want to be overcharged so that they feel like they're getting the best stuff.  If I were a smarter businessman, we would double our prices and satisfy that human urge to lay out for the best.  The downside is that I might find a different market sector in the process and slowly find that I'm spending a lot more time primping for out-of-town customers and less time in the vineyard.  I prefer the latter.

Cheers!

Comments

[JOhn]

The wine price should be optimal. That's it.