Roy Piper price increase

Roy went from $125 to $150 for tbe 2013 release, going from $150 to $175 for 16 release. Thats $50 or 40% over three vintages. Now i dont think Roy is doing this to get rich, im sure his costs have increased, why have things in Napa gotten so out of hand cost wise ? Doesnt it reach a point where buyers dry up, it seems that some people are selling out but the $150 + wines do seem to be more easily available with a few exceptions.

Are we going to reach a ceiling or prices just going to increase continually ?

This is the big question. And not an unfair one.

I am of two views on it…

  1. Now that I have Houyi ($250-325 for other producers from there) and Farella (one producer is $200) in there, with perhaps another monster vineyard in the works to be added for this year, the fruit costs are up about 50% the last three years. Other costs are up as well, between 15-25%. My margin has been ticking down since the 2014 and since this is my only source of income, I can only let that go so far. Thus, a price increase of 16.7% I feel was a moderate response.

  2. Consumers could care less about a producer’s margin, and rightfully so.

To me both are very valid views and the market will make the decision. Given I make only 300 cases, I will have the overall demand to fill it all, but perhaps not in the standard 7-10 days it often takes to do so. I do staggered releases.

Yet at the same time, I am very aware that many 3-bottle buyers looked at me as the outer price limit for their purchases and I will lose a few. Case and half case buyers are not quite as price sensitive. I am still WAY below many in this category, btw, especially after shipping costs are included. And since I am willing to keep pushing the quality envelope every year I can, I am aiming at Screagle and Harlan and Abreu Madrona quality over time, although even if I ever reach such lofty heights I would never come close to those prices.

I tried to help offset the price increase with $25 flat air shipping, which is almost unheard of for air shipping. I will eat about $5-9 per bottle for such and that slightly claws back a portion of the price increase, but obviously not all. I released a video last week discussing the price hike. I wanted to give my clients notice so they could give it thought. I can’t stand when no one knows what happens until the sign in.

It is all a fair question and I am willing to chat with anyone about it. I have been thinking heavy about this subject all year. I also am earlier than many for their 16 release by weeks and perhaps a couple months. I know what is coming from others and at what prices in many cases and wanted to be earlier in this cycle rather than later.

roy- thanks for the comprehensive reply. obviously going to houyi was a conscious decision and the price hike was foreseeable, in terms of your fruit cost and the ‘savings’ being passed on the consumer.

two questions, out of curiosity: what/how much went into this decision in terms of anticipating how your buyers would view the price increase, and how does per acre vs yield fruit buying affect how you operate relative to the market as a whole?

Roy, thanks. Just to be clear my post is a comment on Napa in general, just using your wine as an example

Roy did speak about this at the end of his tasting video. Sadly, I recently found out about these wines and at the $125 price range I probably would’ve went for a couple, at the $175 I’m going to have to pass. I imagine at some point wineries will being to price out enough consumers that they’ll need to stop. I’ve heard many good things about Roy’s wines so I’m not sure that’ll be the case for him, but I’m sure we all know some wineries that have increased their prices significantly over the last few years to the point that there are many better and cheaper alternatives.

I’ve been buying since the 2010 vintage and ordered up this year as well. There is no one in Napa, or any where else to my knowledge, that routinely provides as much information and insight into his winemaking, reasoning and decision making. It’s been an enjoyable and educational experience from the first private tasting at the custom crush facility to the current offer. Keep trucking Roy and keep trying to control cost where you can.
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I have no issue with the increase, $175 is a more than fair price for the wine. Videos are great.

Did this come out today? Logged in, don’t see an offer.

Email came out today. You need to click on the link to see the offer,

+1,and I will add that Roy is a good guy and the wines are terrific…all in all worth supporting this small operation. I am one of those 3-pack purchasers for which this pricing represents the outer limits. My perspective,is that rather than a dinner wine, this is a luxury purchase, which I will enjoy someday when I open ‘em, and while I cannot fill a cellar with this class/price wine, I can do a few…which leads me back to the first point and this is one IMO to support.

I’ve known Roy for 10+ years, consider him a friend - so every single disclaimer you can apply, applies. With that said, I will confidently say the 2016 Piper to/for my palate, is the best one he has released. No one likes price increases but once you open it, you’ll see where that extra money went.

Agree with D. Callahan. I’ve been buying from the beginning and love the wines. Especially when you have the personal commentary from Roy, via the videos.

I like supporting independent operations, and love Piper wine, so no problems here. It is also at the top of my bottle budget, but so far, so good!

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Side note, is it just me, or does the word “wine” in this and other posts link you to a Purple Acid Cigar ad? (It seems to come and go.)

I think my subscription is current.

I was just noticing that. Says link added by VigLink
Mine came up Sur La Table. Hit it again and got Fuente cigars???

Houyi is by the acre. Moulds is by the ton, but is a multiple of bottle price… the Beckstoffer model. Three years ago the price averaged $10,000 per ton +/- for fruit and now is $15,000 per ton. Fruit is the #1 cost of production. Believe it or not, what I pay to reduce shipping cost for buyers is the second highest cost for me, with custom crush costs being third and barrels, fourth. So when the fruit goes up, which it is everywhere it seems, it sends a cascade down the line to producers. Last year the Napa average was $6800 per ton. Stunning. That is just for mundane valley floor fruit most never hear of.

I think when I released 2010 and 2011, almost no one knew the quality level of my wines and so buying was a bit of a leap of faith and the $125 was a way to convince them to take a chance. But now I think most of my buyers have opened 1-2 bottles at minimum by now and are aware of what they are getting. In addition, my wines are better now than ever before and that helps. Of course, to make them better I have needed better fruit and better facilities, both of which increase my cost per bottle.

I try to stay close to my buyers through various means and I have a sense what other Cabs they buy and what they pay for them. A large portion of my buyers also buy Shafer HSS, Harlan, Hundred Acre, etc.

In other videos I have released the last 3 weeks I have mentioned the pending release date. As is often the case, several clients reached out to me and said they would not be around for the release date and asked if I could run their order early. So I did. But this was before the video announcing the price hike so I had to let them know (one at a time) that it was going up. It was a bit of a nail biting experience but I did not see a single bottle of drop-off.

I do and did expect some to drop off once all 500 buyers find out about it. But I won’t know how many do and have until perhaps a week or so from now. I feel pretty good about how this release is going so far given it has only been open 4 hours.

The scary thing about pricing of bottled wine is that the revenues from it get spent 2-3 years before the vintage it is being made on goes on sale. In other words, my fruit prices went up 50% BEFORE I was able to raise the price. And any more price increases must be paid by the winery this year for vintage 2018. If one waits solely until that vintage goes on sale to recoup the higher costs, you can get hit very hard in the profit margin. If I add a vineyard I am hoping to this year, it will be $17,500 per ton probably, so my cost goes up now, not in 3 years.

Accounting rules also make this difficult. I cannot deduct the cost of fruit until the wine is SOLD. That is a brutal tax law. In other words, I need to carry the cash cost of the fruit until I sell the vintage, at which point the IRS considers the fruit “depleted” and it becomes a cost. Thus, higher fruit costs now are paid now, and higher retail prices for the wine do not benefit a Cab producer until 2-3 years later. So raising the price is a defensive measure ahead of time, not just a measure to recoup previous costs.

Hope this helps explain it a bit.

All of last years buyers should have it in their inbox. The wait list is 3-4 days away. =)

According to the Federal government, inflation is only increasing at about a 2% annual rate…

So really its the growers who are causing the wine inflation ?

Alan, did you watch Roy’s video?

Yes, and that applies to all goods and services in equal measure! [cheers.gif]