Terroir is a scary word for Americans. First off, it’s a French word and there isn’t an exact English translation for the term. Terroir, loosely translated, refers to the soil, climate and the type of agriculture planted to a particular place. I feel there are other important factors that should be included such as the culture of the particular wine region and, within that, the cuisine and the winemaking traditions. The use of American Oak to age Rioja and the choice of grape and stirring of lees in Muscadet are two great examples of adjustments made to the wine to suit each region’s cuisine. Rioja is suited to the tapas cuisine of Northern Spain while Muscadet matches the seafood of the area. The bottom line is terroir matters. And the proof is in the pricing of wines from certain regions.

A Chardonnay from the Maipo Valley in Chile does not command the price of a Chardonnay from Le Montrachet in Burgundy. An avid wine consumer or professional may understand the pricing difference between a Chardonnay from Pouilly-Fuissé versus one from the Leyda Valley in Chile, but the average consumer may need a little help. So I am trying to design a system to help.

The system involves codifying the wine industry, which has been a dream of mine for more than a decade. My focus right now involves determining the average price or most common denominator (mcd) for every wine category in the world. The mcd for a Cabernet Sauvignon from Napa Valley is $52, while a Cabernet Sauvignon from Mendoza, Argentina has an mcd price closer to $16. While doing this massive exercise, I found some very interesting trends—all pretty much confirm the concept of terroir.

The mcd for Cabernet Sauvignon is $38, while the mcd for Chardonnay is $48. These prices reflect the fact that we can find good (to great) Chardonnay priced anywhere from $7.50 to $292 and good (to great) Cabernet Sauvignon priced from $6 to $155 (I have eliminated the so-called cult or collectable wines from the algorithm). So what does all this information tell us? Price and place have a relationship. There are some places that offer great value and some places that offer great wine—the Holy Grail is when great wine is also a great value. The next time you buy wine, check out the pricing of the category, whether it is from a region like Bordeaux or Burgundy, and use that information to determine if the wine you buy is good, very good, great or none of the above for the price you paid. Using the Napa Valley Cabernet Sauvignon $52 mdc (median price), if you have a Napa Cab that costs closer to $20 and it is very good, then go back and buy a case. While a Napa Cabernet priced at $75 or more better be great to make me want to buy more of it.