Tuesday, November 29, 2011

Yao Ming sells China bulk wine for $289 a bottle


I don't know if Chinese wine buyers are suckers, but Yao Ming sure thinks they are. The retired NBA player is selling a brand of wine named after him -- for 1775 yuan (US $289) a bottle!

There's nothing inherently ridiculous about a $300 bottle of wine from Napa Valley. Colgin, Screaming Eagle, Harlan Estate, Hundred Acre and others I'm probably not thinking of sell wines in that price range already.

But there's a big difference between those wines and Yao Ming's: the others come from specific vineyards. Yao Ming's comes from grapes bought off the bulk market, the same as Smoking Loon or Ravenswood or anything else you might see in the supermarket for $10. And Ravenswood's bulk-grape buyers have been at it longer than Yao Ming, so the next time you buy a bottle of Ravenswood Vintners Blend, tell your friends, "This could sell for $289 in China!"

To be fair, Yao Ming probably paid more per ton for the grapes, though we don't know that. Wine Spectator Online, in a fawning story, reports: "The winery currently sources grapes from several Napa Valley vineyards, including Sugarloaf Mountain Vineyard, Tourmaline Vineyard and Broken Rock Vineyard." None of those are considered Grand Cru material, and we don't even know if they are the only vineyards sourced from. It's Napa Cabernet, it's $289, that's all you need to know.

And you know what? It's not even the Yao Family Reserve! That's due out later this year; who knows what he'll charge his countrymen for that one.

As a California resident, I guess I'm happy about this: we're repackaging our lesser-quality agricultural products at high prices. Hurray for Yao Ming!

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44 comments:

Brian B. said...

according to Wine Spectator online:

"The winery currently sources grapes from several Napa Valley vineyards, including Sugarloaf Mountain Vineyard, Tourmaline Vineyard and Broken Rock Vineyard"

nothing that special. it is crazy to imagine almost $300 wines being made from these sources. just a quick search and most producers are charging more in the 30-50 range for the same fruit sources.

Robert Cartwright said...

This proves that he chinese buyers have no idea what they are buying. It is all image, all the time, no matter if the wine is mediocre or undrinkable. has to be a name brand or else. I haven't tasted it but the wine might be okay, but not $289 okay.
This makes me, however want to start marketing wine in China. If they will buy bulk wine for the same price, I need to start making connections.

Lisa Mattson said...

And the celebrity wine bandwagon continues to roll full speed ahead ...

Anonymous said...

How about tasting the wine before passing judgement?
You might be surprised at the number of Napa Cabs selling in China at +$200/btl

Anonymous said...

This seems very misguided to me; so transparently about gouging the consumer. It's sad, really, that the Napa Valley----such a brilliant place-----is being exploited by all of these johnny come lately's that just see status and dollar signs. Napa deserves better. There are so many gifted, hardworking folks up there making brilliant wines, but the ones that get written about in the glossies are the celebrities that don't seem emotionally invested in that special place at all.

Remember folks, Napa is not Hollywood. If you want to be famous and make lots of bank, head over to LA. Leave Napa alone.

W. Blake Gray said...

Anon: How about leaving a name on your comment?

What judgment have I passed? Did I say it was a bad wine? No. Did I say it's not worth $289? Yes.

If you want to call me names for that behind your shield of anonymity, go ahead. But if you want to argue that this bulk wine sourced from run-of-the-mill Napa Valley vineyards is worth $289, you're going to have to identify yourself.

Cameron Hughes said...

Those vineyards are all owned by PPV/Calpers. I cleaned all the bulk wines off those properties for anywhere from $5/gallon to $25/gallon. They did hold back some of the cab for another project though I have no idea this is what they are selling. Vineyards are very good however but not the best.

W. Blake Gray said...

Thank you, Cameron, that's vital info.

What are you planning to charge for your wines from there? You can now market them as "worth nearly $300 in China!" Come to think of it, can you sell them to China?

Stephen George said...

Hi Blake, I enjoy your blog, and thanks for the story.

I have no dog in this fight except for clarity. So let me ask: is there not a difference in your mind between bulk wine (JUICE sold by a vineyard or winery on the "bulk" market) and grape contracts? Based on Wine Spectator's reporting, the Yao wine appears to be made from GRAPES not juice farmed on these properties, apparently with Yao's winemaker's input in farming decisions.

"The winery currently sources grapes from several Napa Valley vineyards, including Sugarloaf Mountain Vineyard, Tourmaline Vineyard and Broken Rock Vineyard. 'We have farming input with these ranches, so we’re not simply buying these grapes,' said Hinde."

The wine may still not be worth $289 (I suppose that's ultimately up to the buyer and his or her wallet), but it doesn't strike me as accurate to characterize the wine as a "bulk" wine.

Am I off base?

Stephen

W. Blake Gray said...

Stephen: It's a fair point. There is a difference between grape contracts and bulk juice.

However, I simply don't believe the Wine Spectator rewritten press release about "farming input." Look at the timing: this is a 2009 wine. Yao Ming supposedly got interested in making a wine two years ago; that means his agents started finding a winemaker two years ago.

At what point did he get "farming input?" Surely not until -- maybe -- picking decision. Which matters, for sure. But then you're talking about a negligible difference, if any, between grape contracts and bulk juice.

It's possible that the 2010 vintage of Yao Ming might benefit from the "farming input" of the NBA center. But there's no logical way the '09 could be different in any appreciable way from bulk juice.

Cameron Hughes said...

Blake - we sold these wines (RRV and SC PInot, Napa cab, CF Merlot) already under various Lots for $18 and below. Clearly I am selling wine in the wrong country :-)

That said, the Cabernet coming off those properties is pretty ripper but not $300 a bottle ripper. Your reaching big time at a $100.

Pete said...

I saw Yao Ming walking those vineyards. Couldn't miss him.

W. Blake Gray said...

Cameron: Not that you need a little praise far down in the comments on a blog post, but what this means is that your wines are great values. But we already knew that.

Pete: Post photos!

Pete said...

I was only joking, of course, but looking at the Spectator story, it appears they really did drag the big fella out to the vineyard for a PR shot.
http://bit.ly/vps9Aj

Bryan Maletis @fatcork said...

Good post, Blake. And great conversation with Cameron.

I relate this bottle, to the Champagne "Ace of Spades", or Armand de Brignac. What was once a $60 bottle of Champagne is now $400+ because Jay Z partnered with them, and they painted the bottle gold... But, the market is willing to pay, so good for them, I guess.

Robert Cartwright said...

Wait, didn't Yao have foot problems that caused him to retire? How would he be walking in the vineyard? Probably not very far. Not doubting Pete, but I would probably believe they drove through the vineyard, quickly. Anyway, would he know what he was looking at or understand the technical jargon used? Not that he couldn't comprehend or study up before buying. But in my two dealings with chinese bulk wine/grape buyers they are not very aware of varietal difference or quality. Just as long as it has a recognizeable place name/brand that they can sell. Not to say that Yao could not pick out a stinker wine if he tasted it, but as Mt. Hughes knows, there are various levels of quality out there and ways to cover up opps-es so you will buy it. But as I said haven't tried the $289 wine, so can't judge.

Ian Malone said...

Blake,

With all due respect, your screed about this wine that you've never tasted or researched is unbecoming. To compare this wine to $10 Smoking Loon is just ludicrous.

Merus, Paul Hobbs, Cakebread, Duckhorn and many other top-caliber producers source grapes from these vineyards. Each of these producers, including Yao's group, has extensive input on farming.

As for the price tag of the Yao wine, keep in mind that China's import duties/taxes take up a large portion of the retail price and it's common to see foreign wines in that price range. You can't compare it to U.S. retail prices.

Yao has god-like status in China, and this project has the potential to open up the Chinese market to Napa Valley and California wines (the high-end in China has heretofore has been dominated by the French). This is an absolutely positive development. So, rather than being snarky, how about withholding judgment until you know more about the wine and how it's received in China?

Ian

(Full disclosure, I am involved in the management of the vineyards in question but am not involved with the Yao project itself)

p.s. - Following up on Stephen's comment, I think you are still confused about the difference between bulk *wine* and grapes. It's pretty simple, grapes need to be turned into wine. Bulk wine is already wine. That's all you need to know. You're using "bulk" as a derogatory term, but the fact is every winery sells and buys some wine on the bulk market (the term "bulk" just means its sold between licensed producers in quantity), and the quality ranges from plonk to 95-point caliber. Cameron Hughes has based his business model on finding these top quality wine lots, to huge success.

p.p.s. - Cam, so much for keeping your sources of wine confidential.. No doubt you got a great deal on wine we had made from excess fruit (which had everything to with the recession, not the quality of these vineyards).

Cameron Hughes said...

Ian, there are a couple situations where I reveal sources. One is bankrupt wineries such as the Billington Imports/havens winery deal . The other is defunct entities. Since PPV is no longer managing the properties and there are a myriad of brands associated but not directly owned by the properties in question, I didn't think it would be a problem. Still don't.

Cameron Hughes said...

Btw, I do agree with you and said so, the vineyards are "pretty ripper".

Matt J. said...

We're really talking about a $160 wine here after backing out the 27% import tax ($78.03) and the 17% sales tax ($49.13) according to the WSJ article.

Maybe that changes some opinion but not mine -- $150 to $300+ wine is the same group to me: The crazy expensive group.

I've bought good crazy expensive wine and I've also bought wine for $30-$50 that was so good I told myself I'd chew my non-drinking arm off to get the last remaining bottle. I gave up thinking price always correlated to quality a long time ago.

There's a marketplace and a demographic for everything and I love that about our economy.

W. Blake Gray said...

Ian: Let me see if I understand your final point: I'm supposed to wait until I see how the wine is received in China to express an opinion on it on my blog? Are you serious?

More to the point: Are you American? Because there's a document called the Bill of Rights we have over here I'd like to call your attention to. I'm hardly screaming "fire" in a crowded theater here.

Look, I drink bulk wine all the time, and I know it. There's nothing wrong with bulk wine. There's something wrong with telling people it's worth more than $100 a bottle.

Ian Malone said...

Blake,
Thankfully this isn't China and you can say whatever you want on your blog. I wasn't trying to imply anything to the contrary.
But making spurious assumptions that it's inferior wine, it's bulk wine (which it isn't), comparing it to Smoking Loon based on nothing more than speculation, yes I think that's wrong too. We'll just have to agree to disagree.
Ian

W. Blake Gray said...

Ian: Maybe I really like Smoking Loon?

I'm actually trying now to set up a blind tasting of this wine vs. other Napa Cabs. Perhaps you can help arrange it?

Adam Lee/Siduri Wines said...

Blake,

You argue for the Bill of Rights and against the Free Market at the same time?

I guess I figure that the market will eventually sort out what the wine is worth....

Adam Lee
Siduri Wines

W. Blake Gray said...

Adam: Show me the Free Market in the Constitution.

Moreover, show me where I'm anti-Free Market in this post. If Yao Ming can hoodwink his countrymen into paying $289 a bottle for bulk wine, more power to him. I'm not calling for legislation or anything silly like that.

Adam Lee/Siduri Wines said...

Blake,

I'd probably resort to the 10th Ammendment and the decision of the people to adopt a free market system.

And while you didn't advocate legislation, you simply said it was wrong to price the wine over the rather arbitrary $100 mark, I also didn't see Ian advocating banning your blog and yet you felt the need to bring up the Bill of Rights and ask if he is an American.

Adam Lee
Siduri Wines

W. Blake Gray said...

Whaddya want from me, Adam? Tell me what you want me to say, and perhaps I'll say it.

Adam Lee/Siduri Wines said...

Oh Blake, you temptress! Anything I want you to say?

Let's see. I'd love an examination of how you think China would cover and how the Chinese people would feel about an American-Chinese athlete who managed to turn his celebrity into a product that was sold in the United States for almost $300 per item. My guess is they would think it was amazing and the press would be universally positive. I'd love your thoughts on why the difference in perception in our two countries?

I'd love to see mention of some of what Yao has done with his earnings in his life --- like the millions he donated after the 2008 Chinese earthquake, the foundation he founded to rebuild schools afterwards, the telethon he hosted to stop the spread of SARS, the auction he founded that raised a million dollars for underprivileged kids in China, and his purchase of his old Chinese basketball team saving them from closure. -- And then see if you could find out what he plans to do with the money from this venture.

Those would be interesting blogs to me.....

(BTW, I only know what I know about Yao because his arrival in my native Texas was huge in the state...and once I found out he shares my birthday, September 12, I became a fan).

Adam Lee
Siduri Wines

W. Blake Gray said...

Adam: You know what I love about the First Amendment? You can say all that stuff, and I don't have to.

Re how China would cover a Chinese-American foisting this product on Americans for $289: Sorry, but I don't plan to take my cues on coverage from the Chinese media at this time -- though if the Chinese Army wants to buy The Gray Report, they can make me an offer.

Ian Malone said...

I got you to say you like Smoking Loon! My work is done.. ;)
(for the record I have nothing against the SL, it delivers good value)

Email me at ian[at]brixmark.com and I'll see what I can do to help.

Anonymous said...

Note to wineries: If you want to sell bulk wine quietly, I highly recommend that you keep a wide berth of Cameron Hughes. I know first hand about how blatantly he and his sales reps tease out obvious hints about who their confidential sources are. He doesn't seem the least bit phased by all of the cease and desist letters and bridges burned in the Napa Valley.
As for Yao: price is a simple equation of supply and demand. I'm sure he'll do very well.

Jon Bjork said...

A great discussion, as usual!

I wonder if you all saw the latest news that implies that more China banks may get into funding purchases of these upcharged wines:

http://money.cnn.com/2011/11/30/news/international/china_reserve_requirement/

W. Blake Gray said...

Note to Anon: Cameron has a lot of courage, but you are a coward, hiding behind anonymity.

But I'll address your point by saying that I have written feature articles about Cameron for two publications, both times doing extensive interviews and tasting with him. I asked him about vineyard sources, and I'm not shy about asking the same question multiple times.

Out of dozens of wines of his, there was only one that I successfully guessed the source of, and that was because the unique AVA made it easy. Even then he refused to give me official, quotable confirmation.

So Anon, you're both a coward and just plain wrong. If you want to go on the record and say that "Cameron Hughes told me on this date that this wine was from this winery," then we'll talk. Otherwise, crawl back under your rock.

Anonymous said...

Andy here...Interesting comments. I wish Yao the best and I really do not think it was fair for you to compare what he is doing to Smoking Loon (equating bulk wine to undrinkable plonk...like Smoking Loon....). CH Wines, on the other hand, seems like a much more fair comparison. Now, I've had somewhere around 20 CH wines over the past year or 2 -- some of them have been outstanding (the 2009 Old Vine Grenache from Spain and the 2008 Carneros Piniot come to mind) and some have been reprehensible (the 2009[?] Paso Robles Syrah -- horribly flawed with Brett). To my palate, I've had WAY more bad wines then good from CH -- all of the ones I've found to be bad (and good for that matter) have glorious descriptions including wink - wink, nudge-nudge references to their vineyard providence (you know the drill...wines from this vineyard sell for $$$ per bottle and we are selling it for $15....). I hope Yao's team finds a way around this variability in the bulk wine market...esp at that price point. Given this variability, both with Yao and CH, I would never buy a bottle from either (regardless if the price tag is $15 or $289 ...although a bad $15 bottle hurts alot less!) unless I've tasted it first

Ian said...

Andy, just to clarify and reiterate, the Yao wine is *not* sourced from the bulk wine market. It is from contracted vineyards and the Yao group has extensive farming input.
thanks
Ian

Anonymous said...

I'm anonymous, but I don't think anything I am saying will warrant asking for my identity. Question for Blake that Stephen George already hit on: What is your definition of "bulk wine"?

Mine is wine that has been made at a winery, and for whatever reason (it sucks, it was flawed, there was too much of it, the winery couldn't afford to bottle it), it is sold on the bulk market, generally for less than cost of goods. Cameron Hughes does a good job exploiting this market. A smart winery sells their least desirable wine as bulk, and keeps the best from the vintage to bottle. The quality decision is based on the quality of fruit at harvest, the quality of the winemaking and fermentation, and the judgement of the finished wine. I haven't seen any evidence in your post or in the comments that this is what Yao Ming's people are doing.

In your post and later comments, you start talking about purchased grapes and grape contracts. I would argue that there is not necessarily a negligible difference between purchased grapes made into wine, and purchased bulk wine. A lot of high quality wine out there is made from grapes that are purchased, many times with a contract, and plenty of the winemakers have no actual say in the farming, even when they think they do. Plenty of high ticket bottles from sought after labels are made this way. If Yao is buying grapes and having the wine made he is doing what plenty of people who sell their wines for over $100 are doing.

I know Stephen addressed this and you replied, but the discussions seems to have followed the title of the post, and therefore this is all confusing. I'm just looking for clarification since the title says "bulk wine".

W. Blake Gray said...

Anon: Your point's valid and your anonymity is not going to invoke my wrath today; that's for anonymous flamethrowers, whereas you pose a reasonable question.

I said before in these comments that I doubt how much input Mr. Yao and his people could have had into the first vintage because of the timing. I'm just a cynical sort, maybe. But I can't see how they had the time to do anything other than get wine at the last minute in 2009.

Ian's going to try to help me get to the bottom of this and maybe I'll be able to clarify in a future post.

That said, my opinion of bulk wine's quality appears to be higher than yours, and Andy's. I don't see anything *wrong* with bulk wine. I'm sure I drink it all the time. Napa Valley bulk Cabernet is perfectly fine juice much, maybe most, of the time.

The question here is the price tag.

Andy: Re Cameron Hughes -- Google my long review of his entire portfolio from a few months ago. A lot of hits, a lot of misses. But at those prices, you gotta love the hits.

Jon Bjork said...

It is possible that Yao has been working with a winemaker or consultant who has some solid experience with those vineyards from some amount of time before Yao started his project...

Anonymous said...

If the Chinese are stupid enough to fall for this crock of b.s. why are we scared of them?

Anonymous said...

Most people are stupid,
For example,Grey Goose Vodka .
chinese more people more Idiot,
Yao is big shit and Smart 。
For example , Wall Street bankers

Qin Xie said...

Surely he is doing nothing more than selling on his celebrity? Do people generally expect celebrity endorsed wines to be of quality?

W. Blake Gray said...

Qin Xie: It's a very good question, and one I can't answer for China. I think if you look at the pricing and sales of celebrity-endorsed wines in the US, famous people haven't been that successful at getting consumers to buy expensive wines. Or even inexpensive wines -- celebrity endorsements of wine in the US are rare, and I suspect if they were helpful, we'd see more.

But I don't know the Chinese market. Yao Ming knows China better than I do, so maybe he's onto something. I guess we'll see.

Thanks for visiting my blog and commenting.

ColoradoWinePress said...

So how is this any different than Wolfgang Puck's new $250 wine? He is paying a winery (Schrader) to make an expensive bottle of cabernet from purchased grapes (same as Yao). With the import fees and taxes, Yao's wine is actually cheaper. I'm not disagreeing with your assessment that the wine is outrageously overpriced, but why did you focus on Yao Ming and not any of the other similar ventures?

PS. Cameron - had the Lot 183 last night. Nice, but nothing special. Hoping that that 10 or so other lots I have offer more bang for the buck... Also, do you non-disclosure agreements have a time limit? I'm sure sources will eventually get out, but just wondering how long that will take...

W. Blake Gray said...

CWP: What Puck's doing isn't any different from what Ming's doing. As for why write about Ming, why write about anything? It's interesting. Do I need a better reason?

Re non-disclosure agreements: If you mean mine, it's over, I can say anything I want about anybody I used to work for! Like, nyah nyah, should have listened to me.

But if you mean Cameron's, I'm suspecting never, and even if there is a sunset date, he would be hurting his future business by openly telling people where the wine came from. In some cases these are wines that the makers want to disavow having made, and he might want to buy from them again.