Optimism returns to Napa Valley, after a long, dark recession
I was chatting with Bill Harlan yesterday and he made two comments (among many others) I thought were particularly interesting:
1. Napa Valley is basically all planted out. Remaining land is too steep or otherwise geologically inappropriate for grapes, or else the local laws prohibit it from development.
2. The slump in demand for high-end Napa wine has pretty near bottomed out. Within a year, demand will begin to soar again. This is being helped by interest in export markets, particularly Asian.
Concerning #1, it had never occurred to me to ask anyone if Napa is all planted out, until Bill said so (and if anyone should know, it’s this man, whose eye constantly ranges over the Napa landscape, looking for things no one else sees). Strange; it’s such a basic question. I guess I took one look at all that empty space (well, not really “empty,” as it’s filled with forests) in the Mayacamas, and those less-forested slopes of the Vacas, and figured anyone with enough moolah could move in and plant it.
But no. Bill disabused me of that notion. So let’s accept the fact that what we see in Napa Valley, in terms of vineyard acreage, is pretty much what we’re going to see 10, 20, 50 years from now.
What’s the implication for prices? Right off the bat, even a layman (which is what I am when it comes to economics) can see that, if demand increases and supply is static, then price must rise.
And demand is rising–not just because, as Bill pointed out, China now has skin in the game, but because the evil Recession is petering out (actually, it was officially declared over last October), and people once again are starting to spend. Granted, the beleaguered middle class (that’s me) continues to stuggle, but then again, we were never the ones that bought Harlan and all the other cult wines in the first place. That was rich people, and they’re the first ones to recover as the economy improves. From everything I can see, the wealthy are spending again on all manner of toys, and that includes super-expensive wine.
So that touches on Bill’s #2 prediction, that the slump in Napa high-end wine (which we knew occurred after 2007, through anecdotes and confessions) is over. We’d have to see the actual sales figures for all the cults–Harlan, Screaming Eagle, Colgin, Bryant, Araujo, you know the list as well as I do–to know for sure. But I keep my pulse on the industry pretty tightly, and I can tell you that confidence is back at the top houses. Prices are once again inching up, which would have been unthinkable three years ago. There’s optimism in the air.
And this optimism isn’t based on simple faith, it’s based on something more fundamental: the knowledge of proprietors that they possess the most valuable commodity in American wine: “Napa Valley Cabernet Sauvignon.” No four words have the same cachet. None ever will. Pinot Noir (from California and Burgundy) may be the sizzle of the moment (and deservedly so), the contrarian wine even some Cabernet winemakers in Napa collect in their cellars, and that critics love to praise. But Pinot cannot rival Cabernet for sheer seriousness, and besides, for a wine to be famous it must be irrevocably connected to a place. Where is the place in California for Pinot Noir? You cannot name just one. Yet “Cabernet Sauvignon” is as yoked to “Napa Valley” as “Queen Elizabeth” is to “England.”
And this just in:
Not only more alcohol, but better, I would hope, if they can afford it. And lest you think tattooes are only for prisoners and skateboard kids, I would remind you to check out the arms of players in the NBA, NFL and MLB. Tatts have gone upscale. I always said that people with tattoos had greater discernment about the finer things in life than the skin art-challenged (as we call the non-tattooed), and now we have proof. Now (speaking of cult Cabernet), if I can only lure Jayson Woodbridge down to my Oakland tattoo artist to get that chest art he says he wants…