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Napa Valley Cabernet: an endangered species?

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For many years I’ve watched as the price of Napa Valley wine has gone up—and up—and up—until it reached the stratosphere. And then it continued to go up.

Even twenty years ago, I wondered who was buying all that expensive Cabernet Sauvignon. I can’t remember when prices first hit triple digits—I think it was in the 1980s. But once they did, no respectable Napa winery wanted to be the last to retail for at least $100.

At the height of my working career as a critic, when I was paid to keep track of such things, I’d note every new, expensive brand that came on the market. I soon concluded that most were vanity projects: their owners were very rich, and they wanted “in” on the Napa Valley lifestyle that was so highly touted by aspirational magazines. You, too, could have the big mansion, set in a picturesque vineyard, surrounded by blooming gardens, with an azure-blue swimming pool, a grand deck complete with gigantic outdoor grilling station, and Napa’s beautiful mountains soaring in the distance. And all you needed was maybe $10 million to get started.

At one point (I think it was in the early 2000s) I did a count of all the $100-plus wines in Napa Valley, and the total was well into the hundreds. I began to wonder, “Who’s buying all that Cab?” It was easy to understand that the critically-acclaimed cult Cabs (Screaming Eagle, Harlan, Bryant, Colgin, Dalla Valle, and so on) were desired by many wealthy collectors, but what about the hundreds of lesser-known brands? Every week seemed to bring a new family winery with a fill-in-the-blank back story:

Pete, together with his lovely wife Maggie, made a fortune in (computers, engineering, construction, oil, stocks) but there was something missing in their comfortable life. In (date), they bought a small property in (Rutherford, Pritchard Hill, Oakville, Spring Mountain, Atlas Peak) and planted some Cabernet. Now, they produce some of Napa Valley’s most coveted wines, assisted by their consulting winemaker (Michel Rolland, Heidi Barrett, Andy Erickson, Mark Aubert, Phillippe Melka)…

The stories all ran together; so did the wines. They were functionally interchangeable, 95-pointers that all tasted the same. It was impossible to answer the question, “Who’s buying all that wine?” just as it was impossible to answer the question, “Is the winery actually making money?” I suspected, even by 2000, that many, if not most, of these vanity wineries were not profitable, but were kept alive by their owners’ personal fortunes.

The other day, a friend emailed asking my opinion about reports that sales of California wines are weak, with a troubling future. Was it tariffs? Younger consumers wanting something “natural” and eccentric? The greater popularity of craft beer and spirits? I replied, “All the above—plus the fact that California wine, driven by Napa prices, is just too damned expensive!”

And now comes this report, via Wine-Searcher, that “California’s top producers might be pricing themselves out of the market,” with the top culprit being Napa Valley wine.

The article was based on a new report whose startling conclusion was this: “The demand for Napa Valley wines is flat and heading toward a decline. Last year, this report speculated that price increases at Napa wineries may have finally priced out enough buyers to curtail growth. It now seems this is likely the case.”

Will 2020 be the year that Napa Valley Cabernet Sauvignon experiences a price crash? It’s in the self-interest of the producers to prevent this, so I expect they’ll do everything in their power to hold on. But if this represents a permanent trend, how long can they keep on? Will their heirs be content to underwrite a losing proposition, just so they can sit around the pool watching the sun set over the Mayacamas?

One interesting development was the purchase earlier this week of Flora Springs by the Bordeaux winery, Chateau Smith Haut Lafitte. Flora Springs was, back in the day, a highly respected winery. (One of the first articles I ever wrote for Wine Spectator was a profile of them.) They had exquisite vineyards on the Rutherford Bench, and produced various Cabernets and Bordeaux blends that were very good. But Flora Springs, like so many other wineries, gradually saw competition arising all around them: no longer a darling boutique winery, but one of hundreds to choose from. The ownership was quite wealthy (of course), but Flora Springs was precisely the kind of winery I wondered about. “How are they doing? How long can they hold on?”

Well, now they’ve sold. The question isn’t whether the ownership was or wasn’t making money, it’s “Why does Smith Haut Lafitte think Flora Springs is a good investment?” (Their purchase doesn’t include the brand or “Napa Valley vineyard sources,” according to the article.) One thinks of the Bordelais as very astute businessmen—after all, they’ve managed to stay at the top of the heap for multiple centuries. So there must be something Smith Haut Lafitte sees in Napa Valley.

At the same time, I remember when the Woltner family, heirs of Chateau La Mission Haut-Brion, started a winery back in the late 1980s. Chateau Woltner was in the Vacas, on the east side of the Silverado Trail, on lower Howell Mountain. They put out a Chardonnay that was then the most expensive ever in California. It was pretty impressive: Bordeaux Second Growth invests in Napa Valley! What could go wrong?

Well, everything. The brand didn’t last for very long. It was sold for $20 million in 2000.

I don’t know what eventually happened to the Chardonnay vineyards, nor do I care. The point is, just because a French Bordeaux family buys a Napa Valley winery doesn’t guarantee its success. The eventual outcome of Flora Springs will depend on the continuing popularity of Napa Valley Cabernet and Bordeaux blends; and if this category is pricing itself out of existence, there’s little anyone can do to save it. Of course, as we know from Eddie Penning-Rowsell’s classic The Wines of Bordeaux, prices of Bordeaux have been a roller-coaster ride for centuries: sometimes way up, sometimes way down. But Bordeaux persists. Maybe Napa’s future will be as tumultuous.

  1. California (napa and vicinity) and Bordeaux are two regions i’m done with. I’ve been saying for years (apparently no one cares about what i say) those two regions are hugely overrated and over expensive, regardless of the quality they may produce. Pf course some wines are rather good…but i like to find my bargains elsewhere.

    Spain, italy, portugal, greece (so underrated and unknown greece), france… they all have fantastic wines for fraction of the napas and bordeauxs.

    Good riddance to ‘cult wines’, ‘sacred soil’, ‘ego project wines’.

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