Has expensive Napa Cab reached the tipping point? And how will we know when it has?
I’ve suggested repeatedly on this blog over the years, and especially since the extent of the Great Recession became apparent in 2009-2010, that Napa Cabernet Sauvignon was in danger of pricing itself out of the market.
This was due, not only to the effects of the Recession itself, when even the Rich were trending down their spending habits, but to the simultaneous rise in this country of a new demographic: MIllennials, now hitting their 30s, whose tastes in wine (and in much else) are radically different from those of their predecessors.
For one thing, Millennials are much less interested in what “everybody else is drinking” or in what “historically has been regarded as famous” than in finding things that are unique, different, unexpected, surprising, edgy, story-driven, bold, undiscovered, hip and (let us not forget) affordable. That certainly does not bode well for triple-digit Napa Cabernet, which is none of the above.
The people who do like the cult wines are the kind that collect and store wine in large cellars, who dine at Michelin-starred restaurants with wine lists the size of phone directories, and whose selection of these wines may be inspired as much by the desire to show off than by actual interest in them. Don’t believe me? Talk to any [honest] sommelier who works in such a restaurant. They’ll tell you [off the record] exactly what they deal with, night after night.
But these customers—these sorts of wine harlots—are an endangered species. It’s so clear: it couldn’t be more apparent if the Finger of God appeared out of the sky and wrote it on a vast wall. Even in Bordeaux, the top Chateaux are struggling: Decanter yesterday reported that “American merchants bought less high-end and high-priced Bordeaux 2010 en primeur than they had for the 2009 vintage,” with buyers gravitating toward crus bourgeois and balking at the likes of Angelus, Palmer and Leoville-Las-Cases. A buyer for Sherry-Lehmann said anything above $25-$40 U.S. was just “far too high” for his clientele.
I doubt if the Bordelais care. They’ve been through the ups and downs of the economic cycle for centuries, through wars, peace, phylloxera, revolutions, depressions, recoveries, and they know that, no matter how long the market stays down, it always come back up again. This may still be true with regard to Bordeaux.
But Napa isn’t Bordeaux. It’s become so crowded in $100-plus wines that they seem to be more the rule than the exception. For every expensive Cabernet with a true pedigree–Phelps Insignia, Harlan, Stag’s Leap Cask 23, Diamond Creek, Mondavi Reserve–there are 3,4,5 newcomers with no provenance, no history behind them, manufactured ersatz out of thin air by hiring an expensive viticulturalist and consulting winemaker, slapping something together in the bottle and then hoping enough gullible snobs will buy it.
Unfortunately, this is all too often the case. But how long can they get away with it? I suspect there remain enough white-tablecloth restaurants with big spenders who want wine lists containing verticals of big names, and that isn’t going to go away anytime soon. But it cannot last; its days are numbered; that game is going to be over, whether in five years, ten or fifteen, I cannot say.
Yet there has to be a tipping point at which Napa no longer can sustain so many overpriced wines. I don’t expect Napa itself to understand where the tipping point is, or will even recognize it when it comes: Napa is very, well, Napa-centric, as perhaps it should be; but it does tend to see the world from within its own rarified bubble.
No, the tipping point will be installed upon Napa by that outside force, the free market. We’ll know it has happened only when we begin to see prices start to plummet on the most expensive wines. I myself believe I’m already seeing that, but to accurately track it, one would need the services of a staff, utilizing databases able to track real-time information in individual markets, across hundreds of individual brands, including their clubs, mailing lists and favored accounts. This forensic accounting is obviously beyond my capabilities. The tipping point therefore already could be happening, but be invisible.