Wine Spectator’s Top 100 Wines of 2008

Wine Spectator’s list of top 100 wines for 2008 is out, and there are a few surprises. Perhaps the most stunning fact is that you have to look all the way down the list to number 10 before you find an American wine. Seghesio’s Sonoma county Zinfandel placed 10th with a Wine Spectator score of 94 selling for $24.

If you look over the entire list you will find only 19 wines from the US. The US wines on the list sell for an average price of $57.47 while the average price for wines produced outside the US is $50.41.

These numbers are particularly interesting if you compare them to the top 100 from 2007. The 2007 list contained 26 wines from the US with an average price of $39.50. The average price for a wine produced outside the US was about $43.25. Given that in ’08 the dollar suffered greatly against the Euro, New Zealand Dollar and Australian Dollar (it has recovered some lately) the 16.6% increase from ’07 to ’08 in cost for wines from outside the US is somewhat understandably.

What is not quite as clear is why the award winning wines produced in the US show a 31.3% increase in price for the same time period. Energy prices, the cost of agricultural materials, the cost of capital, etc. increased worldwide so these common excuses for raising prices do not explain why American wine prices increased faster than the rest of the world.

I think to determine how this happened we have to remember all the way back to the start of the year. In April of 2008, the Dow Jones Industrial Average was at 14,000 and French Négociants were quoting $700 as the release price for First Growth wines from Bordeaux.

It seems that American producers of premium wines decided to ride on the coattails of their European counterparts and increase their prices as well. Since then, the stock market has crashed, the exchange rate for the dollar compared to other currencies has improved and imported wine prices are on their way down.

However, American wine prices remain high. The pricing and distribution structure of American wine industry is based on the idea that for many, wine is a luxury item. People who purchase luxury items are not supposed to be particularly sensitive to price.

The trouble with this way of thinking it that the American wine market has changed. Regular folks drink wine for everyday occasions and they are sensitive to price. When these wine drinkers go shopping they find more and more wines from outside that they like, at a price they will pay. These imported wines are seen as better values even though they face higher transportation costs and import duties compared to US wines.

Unless US winemakers realize this trend and respond by offering wines at a price that more closely reflects its global value, the US share of Wine Spectator’s top 100 wines will continue to decline.

This year’s top 100 suggest that the Wine Spectator has caught on to this trend, but has the rest of the American wine industry?

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