May 28, 2015
How much does the average bottle of wine cost? According to statistics released in 2015, the average price per bottle of wine shipped in the United States in 2014 was under $40. In fact, 70% of wine shipped cost less than $30. This means that most wine in the market is well under the $50 mark. This leads to another question: do you know how much a bottle of Screaming Eagle, a Napa Valley Cabernet Sauvignon costs? Or Harlan Estate? Wine-Searcher, one of the largest online wine search engines shows that the average price per bottle of Screaming Eagle is $2,848. That's almost 70 times the global average price per bottle.
Labels like Screaming Eagle and Colgin Cellars or Dana Estates are known as "cult wines," meaning, as you can imagine, that they've amassed a cult-like following. Sometimes they're iconic labels, like Opus One, but others they're relatively unknown outside of the industry, like Scarecrow or Sine Qua Non. In any case, these wines are incredibly highly rated across the board, usually Napa Valley Cabernets.
History of Cult Wines
Although most of today's "cult wines" are Napa cabs, there is a long history of single label wine followings (it's no secret that Thomas Jefferson had an affinity for first growth Bordeaux, particularly Château Lafite Rothschild). In his book The History of Wine in 100 Bottles: From Bacchus to Bordeaux and Beyond, Oz Clarke credits Michael Broadbent, former Director of Wine Auctions at Christie's in London for this trend: "There wasn't a market for ancient, rare bottles of wine before Broadbent...Christie's had held occasional wine sales ever since the 1760's, but in 1966 they decided to take it more seriously and recruited Broadbent." So quickly did this catch on, that soon wine enthusiasts were paying upwards of $10,000 for a first growth Bordeaux that was purchased for a fraction of that price just years earlier.
It didn't last very long, though. According to Clarke, "This amazing run of auctioning old wines lasted for the best part of 20 years...But there are only so many old bottles you can find, and as the prices became crazy a darker side of counterfeiting and fraud began to surface."
This brings us back to present day. Modern California Cult Wines didn’t even exist before the early 1990’s. Screaming Eagle is the best example of a California cult wine, because it was the first. Their first vintage was released in 1992, priced at around $75 a bottle. That changed, however, when someone bought a full case, turned around, and sold it at auction for somewhere in the $7500 range, a six fold profit. This changed completely the way that some wines from California were sold forever. Cult wines are produced in limited batches, are consistently highly rated, and often release their vintages to small mailing lists, working off of an allocation system.
One major difference between these and Broadbent's wines from the 1960's is that these wines aren't meant to age for 30+ years like premier cru Bordeaux or Burgundy wines, they're only meant to to age maybe 7-10 years. That means that they're actually meant to drink, the scarcity drives the price (and collectability) up. It also means that the auction and profitability cycle is significantly shorter than those rare, ancient bottles.
It's basic marketing and brand loyalty at its finest, which, considering that the price per bottle of Screaming Eagle has risen without fail year over year, seems to be working!