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Starting at just $9, Cotes du Rhone reds deliver deep fruit and spice flavors without a ton of clumsy oak. They have the complexity that comes from blending a few grape varieties together. They even have genuine regionality, a sense of place that you'll never taste in a similarly priced California Merlot. They're as versatile, dependable and comfortable as an old pair of Levi's.

Value-priced regional wines from Spain and Portugal that likewise deliver terroir at a low price have been making inroads in the American market.

Why can't California deliver the same kind of terroir for $10?

Most American wines that sell for less than $12 a bottle are made from bulk grapes. They're either simple varietal wines with no sense of place or generic red blends with unpredictable ingredients and trendy labels.

One of California's most affordable Rhone-inspired blends is Fess Parker Winery's non-vintage Frontier red, a $10 blend that includes Rhone varieties like Syrah and Grenache but is rounded out with bulk juice made from cheaper grapes like Valdiguie or Zinfandel. The grapes come partly from Fess Parker's own Santa Barbara County vineyards and partly from less expensive inland wine regions like the San Joaquin Valley or Lodi.

Frontier Red delivers much of the easy-drinking charm of a good Cotes du Rhone, but it's not exactly a straight Rhone blend, and it can't really claim to have the same regional personality.

"I describe it as the quintessential Tuesday-night wine," says Fess Parker's marketing director, Tim Snider. "It's a wine that goes with simple food whether it's pizza or hamburgers or takeout that you're going to have with your significant other."

If you're looking for a true regional Rhone blend from California, you're likely to pay $15 and up. The best examples include Beckmen Vineyards' Cuvee le Bec, Joseph Phelps' Le Mistral, Jade Mountain's La Provencale, Morgan Winery's Cotes du Crow's, Curtis' Heritage Cuvee, Robert Hall Winery's Rhone de Robles and Tablas Creek's Cotes de Tablas, some of which are arguably more ambitious wines than typical Cotes du Rhones. They're often heavier, oakier and more expensive, making them more Saturday-night wines than Tuesday-night wines.

Grape price costs between California's and Rhone appellations won't help explain the difference in price between California and French Rhones!

Greg Livengood, president of Joseph W. Ciatti Co., an international bulk wine brokerage, says bulk grape prices in the Rhone and California are fairly similar.

Syrah and Grenache grapes sell for $1,000 to $1,200 a ton in France, Livengood says. That's in the same ballpark as the U.S. Department of Agriculture's estimate of prices for Central Coast appellation grapes -- $1,212 for Syrah and $1,450 for Grenache.

Vineyard prices in the Cotes du Rhone appellation and in the California regions well suited to Rhone grapes, like the Santa Ynez Valley and Paso Robles, are not that different.

Steve Beckmen, head winemaker of Beckmen Vineyards in Santa Ynez Valley, estimates the cost of raw, undeveloped vineyard land in his area at $5,000 to $7,000 per acre and the price of developed, productive vineyards at $10,000 to $21,000 per acre.

That's not terribly different from the $16,000 to $20,000 price of developed, up-to-date vineyards planted with Syrah or Grenache in the Cotes du Rhone. Plus, many French producers have owned their land for generations and do not have the payments associated with recently purchased vineyards.

Packaging costs, however, are cheaper in France. Lower-priced French wines usually use inexpensive bottles and simple labels, while American wineries often use heavy or custom-designed bottles and distinctive labels that stand out on store shelves, add perceived value and bring a higher price.

Of course, savings in packaging may be offset by higher shipping and distribution costs. Livengood estimates that French wineries pay about $2.50 per case in shipping costs and 55 cents per case in import duties to send their wines to the United States. American importers mark up the wines by roughly 30 percent.

French wineries may be keeping Rhone blend prices unsustainably low in order to keep wine flowing into the expanding American market. Wine consumption is on the rise in the United States at the same time it is declining in France, and the French wine industry is looking ever more longingly at foreign markets.

Another factor that contributes some downward pressure on the price of Cotes du Rhone wines is the rigid regional classification system in France, where price is mainly dictated by an established hierarchy of appellations, the geographic area where its grapes were grown.

"A Chateauneuf du Pape will be more expensive than a Gigondas," says Berkeley-based importer Kermit Lynch. "A Gigondas is more expensive than a Cotes du Rhone Villages, which is more expensive than a Cotes du Rhone, which is more expensive than a Vin de Pays, which is more expensive than a Vin de Table. ...

"The trouble in France is that if you're a genius winemaker but you're in an unpopular appellation, your prices remain stuck in the muck."

American wineries are largely getting the prices that they ask based on their actual production costs. Monterey-based Morgan Winery owner Dan Lee says he just isn't very interested in making a $10 wine because that would put him up against large companies like Constellation Brands and E. & J. Gallo Winery that dominate that price range. "We can't compete at that level," says Lee.

French wineries also may be willing to accept less profit per bottle than American winemakers. Large Rhone producers like Jaboulet and Perrin can hope to make up for lower per-bottle profits with greater volume sales.

Morgan doesn't have any trouble selling the $18 Grenache-Syrah blend he does make -- Cotes du Crow's is a hotter seller than his winery's varietal Syrah.

"Not too many people know about Grenache as a single variety, but I think that when people try something that has Grenache in it, they like it. It has Pinot Noir-like softness and lushness," Lee says.

Beckmen, who makes some of California's best Rhone-style wines, says differences in climate and soil mean that American Rhone blends tend to be more fruit-driven and a little less earthy and spicy than French Rhone wines. American tastes generally favor this style, which means consumers may be willing to go with the higher-priced domestic blends.

"You get a wine where the fruit is sweeter and riper than you do typically with Rhone wines," says Beckmen.

"I was at a wine tasting in Los Angeles and heard some comments from French producers who were visiting. They were just blown away by the number of young people there. They said in France, it's the exact opposite. The younger generation isn't into wine at all, and the older generation that's been into wine... they're getting old. Their eyes lit up. They said, 'We need to sell more wine in America.' "

Thanks Tim, for your insightful Views...

Source & Complete Article: “Why doesn't California make more $10 Rhone-style wines?,” Tim Teichgraeber, San Francisco Chronicle, July 13, 2007

Updated (7-19-07) as per Editor's request...