Why owning a vineyard is so passé
I love the Charles Schwab TV commercial that’s been airing lately. You’ve probably seen it. It shows an older Baby Boomer guy, digitalized in a weird, hallucinatory way (what’s up with that?), talking about his experiences planning for retirement. It’s obviously a slap at all other investment advice companies except for Charles Schwab. He’s putting down “these financial services companies” that presumably mislead their customers and rip them off, when their advisors talk about “beach homes, or starting a vineyard.” The guy says, “Come on. Just help me figure this out…a vineyard? Gimme a break.” And then it ends.
To understand why Schwab’s creative advertising team decided to mock the “starting a vineyard” concept, you have only to go back to pre-Recession times. Throughout the 1990s and well into the 2000s, there was a well-known phenomenon of ultra-rich people who bought themselves a lifestyle. Usually it was in Napa Valley, but not always. Usually it was Cabernet Sauvignon, but not always. These [almost exclusively white] men would hire the best consultants money could buy: someone for viticulture; someone for flying winemaker; someone for official winemaker. If they had any money left over, they’d build a shrine to their own ego and call it a winery. Then they would craft a wine made solidly in the modern cult style, send it off to Parker, get a predictably high score, and voila! Demand (by collector-lemmings) exceeded supply, a three-digit price was no problem, and another “cult Cabernet” was born.
It all worked very well, so why did Schwab’s geniuses decide the poster child for failed investments now is “starting a vineyard”? Aha, now we’re getting into the tall grass of semiotics.
Now, this is in no way a knock against consulting viticulturalists or winemakers, so let’s not go there. What it is is an attempt to figure out why owning a vineyard has become a symbol for a barren, futile investment.
First of all, this obviously is about the Great Recession. Schwab’s unstated message to investors is, “We know your dreams have been utterly destroyed. You no longer have the means to do the things you dreamed of when you retire. That’s really sad, so come talk to us, good old ‘Chuck,’ and we’ll help you.” I seriously doubt that Chuck is any more able to help someone whose life savings have been wiped out than any other investment advisor, but that’s not the point. The point is that the era of rich people buying in to a cult wine lifestyle is over…at least for the time being. Schwab knows that, and that’s why we’re seeing this commercial.
Until the Recession hit, and even today to some extent, I was getting super-expensive Napa Cabernets almost everyday. It was silly, the quantity of $100-plus Cabs with no provenance whatsoever. I’m still getting them in dribs and drabs because the vintages are 2007 and 2008, in other words, before the Recession hit. I think a lot of these brands are going to disappear with the 2009 and 2010 vintages. Probably the Schwab people have figured out that now there’s a window of opportunity when bashing vineyard investment will work on some crude emotional level. The window will close in a little while, by which time the creatives on Madison Avenue will have figured out another way to appeal to investors’ insecurity.
Meanwhile, there’s good news in this for average consumers. There’s a ton of wine out there that proprietors can’t sell at the prices they expected. Many of them are willing to dump their wines off to negociants or third-parties, for a dime on the dollar. That means there are Napa Cabs that, for $25, $30 or a little more, would have cost $80 or more, had the Recession not hit. We don’t know the details of these secretive deals; a “vinted and bottled by” Cabernet for $30 that I give 92 points may well have come from a famous-name brand that ordinarily would have charged an arm and a leg. My blind tastings nearly every day show that the relationship between price and quality is less consistent than ever. The good old days are over, “Chuck” knows it and is attempting to capitalize on it, but life goes on, we continue to seek and drink good wine, and another vintage is about to begin in eternally hopeful California.