Super Premium Wines

After reading the Lafite Rothschild case and hearing about DRC, I was interested in doing a little more research on this super premium segment of the market. I came across the following article on Sotheby's wine auctions that I found informative: https://www.barrons.com/articles/why-is-romanee-conti-worth-20-000-1427964771.

A case of 1978 vintage DRC recently sold at auction for $39,700 per bottle -- well above the $1,000+/bottle quoted in the case for Lafite. While I imagine that the 1978 vintage is considerably rarer than 1999, I did see a bottle of 1999 Lafite retailing for $1900 at the SFO Duty Free store:

Another interesting fact was that DRC wine appears to sell for a premium in bulk: when sold by the case, the bottles have reached nearly $40,000. However, a single bottle sold of the same vintage typically reaches only $14,000 - $20,000 per bottle at auction. It's also interesting to note that much of the demand for burgundy is being driven by Asian consumers.

The only new world wine that I could find that commanded a comparable price premium was Napa Valley's own Screaming Eagle, a cabernet sauvignon with a cult following.  Those bottles are unavailable to buy directly from the winery without making it through an extensive waitlist, but can be purchased from a collector for $3,000 - $4,000 bottle for recent vintages.

Wine Packaging

Small observation, but I was struck by Tracey’s points at the end of class. Given she’s part of a wine lobbying organization, it makes sense that she would belittle CO2 standards and FDA regulations on nutritional information disclosure. Interested in the former, I was curious to learn if her statements were warranted. It turns out that fermentation contributes a very small amount to the overall environmental impact of wine production – the largest portion comes from wine transport to the end consumer. In the U.S. alone, ~95% of wines come from the west coast; environmentally, it costs a lot to ship heavy glass bottles across the U.S., let alone around the world. Better packaging – think boxed, etc. – would not only cost the consumer less economically, but it would produce fewer CO2 emissions as well.  

There’s some hope that this trend picks up – according to a study by Allied Development, alternate packaging is stealing share from glass bottles and is projected to continue. Not only do other materials have better features from a practicality perspective, but they stand out to younger consumers who are more willing to part from staid wine tradition.