Coyote Blog

I am a bourbon and cocktail guy, not a wine guy.  When folks are tasting wine and saying they can taste grass and strawberries and chocolate, I am saying "I think that's a red one."  Never-the-less some new friends who know a lot about wine hosted us a while back on a trip to Napa to do some wine-tasting.  I will say that I left somewhat confused.

The incident that set me to thinking started at a gorgeous winery called Bond, part of the Harlan family series of vineyards.  I had never heard of Bond or Harlan, which generated approximately the same reaction from wine-lovers as, say, telling my daughter I can't name any Taylor Swift songs.  Anyway, we had a tasting there, which I understand was something of a coup in in itself.  At the tasting we tried 5 different cabernets from 5 different parts of the valley.  It was actually cool, they had a jar of the soil each wine's grape was grown in next to the bottles and there were very dramatic differences.  I found this infinitely more enlightening than being told the word "terroir" over and over.

They did a couple of things that I have come to learn make for the best high-end vineyard tasting experience.  First, the whole thing was quiet and private for just our group.  And secondly, in addition to opening up all their current vintage wines (all cabernet sauvignon) for tasting, they pulled a few 2013 versions of the same wine from the library -- "library" being wine-speak for inventory of older stuff.  2013 was apparently a very good year for them and this was by far the oldest stuff we had been offered anywhere.

I had always been told that you can't drink cabs right away.  They have to age in the bottle for 10 or 15 or more years to really be their best.  I had never experienced that for myself but drinking the 2013 version next to the 2023 version was eye-opening to me.  TL;DR it makes a big difference that even I could readily taste.

By the way, if you have any scientific bent, good luck asking any of these tasting room types what -- chemically -- happens in the aging process once in the bottle.  I am more used to bourbons that really do not continue to age once they are out of the barrel and into glass bottles (aging for bourbons requires molecular exchange with the wood in addition to evaporation from porous barrels and even changes to the weather).  So I was curious how wines age in the bottle.  But I asked wine folks about what happens in the bottle -- do long chain molecules break down, do molecules combine, do some chemicals vaporize and leave solution -- and all I could ever get was new-agey stuff about ... something or other.  Something happens to the tannins -- I could probably look it up.

But this is where I hit my conceptual wall I am still struggling with.  To understand this you need to know that the current vintage bottles of cab at this winery go for $800 a bottle -- that is for the 2023 version.  The problem is that I don't really buy $800 bottles of wine.  I don't actually buy $800 bottles of bourbon (see footnote below).  But I knew that people fight to get even a few bottles on allocation from this winery at this price.  So I thought about buying something because a) it was really a lovely tasting and buying a bottle or two seemed good manners and b) it might be fun to have a special bottle tucked away for a special occasion, maybe for the birth of our first grandchild or the night before I get put up against the wall come the revolution.

Outside the tasting, though, I searched on my phone for the 2013 Bond Pluribus we had tried.  I learned that this was considered a very good wine and scored a 100 from wine critic Robert Parker, which is apparently a good thing.  This very highly regarded and more fully aged 2013 vintage was going for $600 in several places. $600 aged 10 years vs $800 new -- I was confused.

My wine friends did not even blink when I said this.  Their reaction was "well, that wine was probably originally sold for $200 and $600 is a pretty big markup."  But that makes zero sense to me -- the original sales price should be irrelevant.  The 2013 is known to be one of their very best years and likely a better year than 2023.  But more importantly it had already been aged for 10 years in the bottle.  By any possible wine drinker metric, the 2013 had way more value than the 2023.  We all agreed the 2013 tasted way better, at least today, than the 2023.  But it was $200 cheaper.  Another way to think about that is that if I have to store the 2023 for at least 10 years for it to really be drinkable, that means the future value at 8% discount rate of my $800 I pay today is $1,727 in 10 years.  Why buy a young bottle today if I can buy an aged bottle from a really good vintage for cheaper?

I had a professor at HBS who taught investing -- I am sorry, I have forgotten his name but he was quasi-famous.  He would put crazy arbitrage opportunities on the board, and we would all argue about why they existed and how money could be made from them.  He would end all such discussions with the same phrase, "either this is a real opportunity or there is something you don't understand."  I am willing to believe there is something I don't understand and am open to commenters educating me.  I can think of a few possible explanations:

1. The online offer is counterfeit, like a fake Hermes bag  (I don't think so, I ended up ordering a bottle from a very reputable store and it appears quite real).
2. People don't trust the provenance of wine sold by third parties -- what if it has not been stored well?  Maybe they left it in a hot car trunk for a month?
3. People are buying lottery tickets -- just as a Pokémon card collector might buy a huge box of unopened card packs hoping to score a super-rare card, perhaps people are willing to pay more for wines at great vineyards in hopes that one will be that wine or vintage people talk about for decades.
4. With bourbon, people pay a premium to put together collections of all the different runs of a particular brand.  Do people do this in wine, try to collect all the years of a certain label?
5. Perhaps wine people are the ultimate marshmallow test kings, actually expressing a preference for 10-years deferred gratification.
6. Maybe it gives wine people an excuse to keep buying wine because none of what they already own is ready to drink yet

Footnote on Bourbon:

I have various types of bourbon tucked away all around my house, but I don't think I have ever paid $800 for anything.  And it is certainly possible to do so.  The most famous, the 23-year Pappy Van Winkle usually goes for $4000-$5000 a bottle on the secondary market. I saw a special bottle of Eagle Rare going for $10,000 a 2-ounce pour in a Nashville bar.  Woof.

I have been lucky enough to try Pappy and other very rare bourbons on someone else's dime.  And my general conclusion is that they are not worth it.  My wife and I did a very special trip to Buffalo Trace several years ago and somehow scored a tour and tasting from the CEO of Sazerac.  So even my wife, who hates bourbon, knows that Pappy and Weller start out in the same barrel.   I signed a Pappy/Weller barrel that my wife hammered the cork into -- it should be available for my funeral.  Anyway, the main difference is Pappy stays in the barrel longer -- which is NOT always a good thing in bourbon IMO -- and it has a higher proof, about 20 points higher on ABV.

So my wife ran a blind test last weekend with a friend and I between Weller 12 and Pappy (18?)  Anyway, my friend could not tell the difference and I could tell only because I knew Pappy had a higher ABV and I could taste the burn from the greater alcohol content.  Had we diluted the Pappy down to Weller level, not sure I could tell the difference.

I find almost any bourbon quite drinkable.  If you like your Angel's Envy or Woodford or Knob Creek or Makers Mark -- great, and I am more than happy to share them with you.  If you want a recommendation, however, here are my go-to's:

• Everyday bourbon, $55 at Total Wine -- Colonel EH Taylor Small Batch.  Seriously if you told me that this was the only one I could drink the rest of my life, I would be fine
• Pricier bourbon, $150-ish on secondary market -- Weller 12.  Probably my favorite of all bourbons and much more affordable recently (several years ago it was going for $400)

Special variations of these, like the EH Taylor Single Barrel and the Weller CYPB are great and fun to compare to the base models.  If you like these, you will probably like the other Buffalo Trace offerings like Eagle Rare and Blanton's as well.  Blanton's definitely has the best bottle, looks great on the shelf, and everyone loves the little horse.  If you are in a bar and see a nearly empty bottle of Blanton's, finishing it off in any good bar should score you the horse.

From these selections you can guess I hang out a lot in the upper left of this map but I still enjoy things all over the spectrum.

Note:  Watch for a podcast coming out soon.  I am working on an outline I have tentatively called "the birth and death of a small business" covering issues across the range of small business life.