The end of Montelena Futures

For me at least. Going from $105/btl for the 2018 vintage to $150/btl for the 2019 vintage that will be open for futures deposits next month and released next year. Received the below letter yesterday.

Too bad, I’ve been buying direct since 2010. Easier/cheaper to buy at retail now, no need to tie up cash as the futures value prop is gone.

CBC357A0-009F-4261-B5C6-0E97A36640ED.jpeg

I have sympathy for every small business these days but that is a gargantuan increase.

I’m SOOO with you. We’ve been members for a while, and absolutely love their wine. The estate is what we have celebrated every professional accomplishment for the past 10 years. But after our recent tasting experience and the price hike (we were told it was going to $125/ bottle in April), we canceled as soon as we got home.

The tasting experience, featured the smallest pour possible, just enough to coat your mouth and then retaste in the same fashion once more. No revisits. Nothing else offered. The educator did not shut up for the entire 60 minute experience, told us NOTHING about the wines (I qoute, “I’m not going to tell you about the wines, I’m going to let you experience them and decide for yourself”) and kept telling story after story on how great the Barret’s were, the Judgement of Paris, etc. He would pause long enough to ask one of the 3 couples in the tasting “what do you think?”, then not let them answer, simply go on to another story. After 30 minutes, both my and my wife’s glasses were empty and we just stared at him. Couldn’t even interrupt him long enough to ask to revisit something, nor talk amongst ourselves since it was a small room and we didn’t want to be rude and interrupt him in case the other couples were actually listening. The previous two tastings we had done there over the years were engaging, fun, etc. This sucked.

2 Likes

Agree that inflation is a problem - wages, materials, etc - but has does anyone recall a one year 50% price hike before with any other winery? That seems extreme, as I assume every other winery has the exact same type of cost issues, without a 50% bump.

On paper that feels like a pretty big hike, but the wine is still a huge value at $150 in Napa Cab, and with most producers seeing a 35-55% materials cost increase, and the looming 2020 vintage where Montelena releases zero wine, it may help to take a step back and see what is really priced into this.

If it’s not a $150 Cab for you, then move on.

2 Likes

I am by no means justifying the cost increase, but didn’t Montelena have to do more re-planting in the last couple of years? I thought I had read that somewhere? Maybe someone on the board knows more.

Haven’t most of the most classic styled NorCal cabs jumped up sharply in price the last couple of years?

Monte Bello, Mount Eden, Mayacamas, Montelena, Stony Hill, that’s just off the top of my head.

I just included one bottle of 07 Mayacamas cab in a mixed case I sold through Spectrum and it went for $185 I think.

The price of glass has inreased 200% in the last year alone. That is just the glass.

The cost of living for the staffing has dramatically increased to the point we can no longer find qualified labor. Even with a gargantuan 30% increase in salaries over the last 3-4 years it is still incredibly hard to keep a motivated staff around. Not even your winemakers can really afford to live in the same zip code that they work in the Napa Valley.

The Estate was clearly underpriced. $150/btl for a wine of that legacy puts it with its peers.

Sounds like winemaking should be priced out of as an economic option in Napa then, if this is the case, according to simple classic economics. Perhaps the fields should be plowed under and some other economic driver become the new norm? Of course I sometimes still see Napa wines selling for around $30 and I imagine they have the same costs… [popcorn.gif]

1 Like

Did glass seriously triple in price in a year? Wow.

Pricing of products isn’t mostly decided by the cost of inputs, it’s decided based on what is the maximizing price. If enough people will pay $150, it doesn’t really matter if their costs went up or down.

1 Like

When I looked at the $150 figure, I wondered which Bordeaux you could buy for the same money. $150 is an awkward in between price, more than Haut Bailly and Leoville Barton, but less than superseconds such as Montrose, Ducru and Pichon Lalande. My best equivalent was Pichon Baron, and having tasted both recently, I am not there is much quality difference as much as stylistic preference.

3 Likes

The crazy thing is that out of the “mainstream” wine regions, Champagne and Bordeaux seem to be quite the bargains these days.

The 2016 Montelena is widely available in the $115 range on the secondary market…so I’d say it has been priced appropriately. As for the Bordeaux comparison, please give me two bottles of Grand Puy Lacoste for $150 and have a nice day!

Great wines. I quit buying years ago after a similar experience in their tasting room.

1 Like

Got the same letter. Have been on their futures program for years as its not readily available near us. And our state has shut down many distributors from shipping to us.
Not sure what I’m going to do yet. Not excited about the big price increase, but the increase does put it inline with similar wines.

I was buying futures starting with the 2004, but I quit after 2015 just because I was getting too old. I have to say, I am continually surprised at how poorly this wine does in the after market.

Tyler Rico where did you get that the price increase was to $150? I got the same letter as you but the price increase wasn’t listed. Also Montelena hasn’t increased the futures price in four or five years (it has been $105 for a few years) so a larger price increase isn’t a suprise, although one that large might be. As Ken V notes the secondary market for Montelena isn’t very robust in most years so not sure if the futures are going to be worth it to nearly as many folks when you may well be able to pick up the wine around the futures price upon release.

Yes, but Napa wine prices are so wildly disconnected from COG, and how the increased material and labor impacts the pricing is not going to be very linear. Specific to Montelena, they should at least be insulated from real estate costs, since they are long-time land owners as far as I know.

If hypothetically it cost $30 to produce a bottle of wine, and the costs increase by 50% to $45 per bottle, does that mean a $100 bottle should now be $150, $115 or something in between? Any one of those options preserves a significant profit margin, so I suspect it comes down to choosing pricing such that the Veblen good aura is preserved yet unsold stock doesn’t linger so long that the ROI becomes poor.

1 Like

Take a look at the anticipated cost section of their futures club page, $900/6 and $1.8k/12

https://montelena.com/membership/futures/

I plan to participate for the 2019 vintage as it’s my youngest son’s birth year. I’ll likely drop after that given no 2020 and will evaluate the 2021 via retail.