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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.


A wine from my cellar, plus Bordeaux at a Basque restaurant

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A few nights ago I pulled the Charles Krug 2008 Vintage Selection Cabernet Sauvignon (Napa Valley), which cost $75 on release. The color was still as inky dark as a young Cabernet, but after almost precisely ten years, the aromatics and flavors had turned the corner, picking up secondary (although far from tertiary) notes. The fresh blackberries and black currants I found when I initially reviewed the wine, in the Autumn of 2011 when it was three years old, were still there, but “growing grey hairs,” as they say, becoming more fragile, and showing leathery notes and, perhaps, a little porty, due to high alcohol, namely 15.7%.

In my early review, I wrote that the wine was “certainly higher in alcohol than in the old days, but still maintains balance.” In those olden days (never to come again, alas), Krug’s Vintage Selection, always 100% Cabernet Sauvignon, hovered in the 12-1/2% range. Gerald Asher, writing in the early 1980s, credited Krug’s “influential legacy” (along with Beaulieu, Martini and Inglenook) as having contributed to “the seeds of all [stylistic Cabernet] options available to winemakers today,” a statement that remains true. His fellow Englishman, the enormously influential Michael Broadbent, in The Great Vintage Wine Book, went him one better. He gave the 1959 Krug Cabernet his highest rating, five stars, calling it “most perfect” and “a lovely rich wine,” and added, amazingly, that his friend, Edward Penning-Rowsell, who wrote the best book on Bordeaux ever (The Wines of Bordeaux), “could not fault it,” rare praise indeed from an oenophile who opined about his specialty, Bordeaux, for decades in the Financial Times. James Laube, the most important American wine critic after Robert Parker, was of more ambivalent opinion. While he called Krug’s Cabernets (first produced in 1944) “grand, distinctive [and] long-lived,” his scores on the 100-point scale were less impressive. In his 1989 California’s Great Cabernets he managed only two 90-plus scores over more than four decades of vintages of the Vintage Select (as it was then called).

I scored the 2008 Vintage Selection 93 points in 2011, and would do the same now. Admittedly, that wine took an enormous departure from the Krug Cabernets Asher and Broadbent loved. The high alcohol is a conceptual problem, and perhaps makes pairing it with food more challenging, but these are matters for our imaginations, not our palates. Organoleptically, the wine still provides good drinking. Even on release the $75 price was a bargain, when, for example, Grgich Hills already was $150, and Jarvis was a sky-high $315. Charles Krug had by then long lost its luster among the label chasers, a fickle bunch, and it must have been hard for Krug, used to being at the top, to be so overlooked, or maybe disrespected is the better word.

It’s always risky to predict the future of such wines, but I would not be surprised if the ’08 Vintage Selection is still purring away contentedly in 2028.

Tasting Légende Bordeaux at Piperade

In France “piperade” (pronounced something like “pip-rod”) is a Basque stew of onions, green peppers and tomatoes, spicy and garlicky. In San Francisco, it’s the name of Gerald Hirigoyen’s restaurant, which opened in 2002 and has long been a fixture on the San Francisco Chronicle’s Top 100 Restaurants list. It’s situated on Battery Street, an old-timely San Francisco neighborhood at the junction of North Beach, Chinatown and the Financial District, just below the cliff of Telegraph Hill: old brick buildings, lovingly restored, that now house tech hubs and architectural firms.

Piperade was where an interesting tasting of Bordeaux took place on Monday. I was invited despite my status as a retiree and had the privilege of being seated to the right of Diane Flamand, the winemaker for Légende, the Bordeaux brand that sponsored the luncheon. (I think this honor was because I was the eldest person in the room!)

Légende is owned by Domaines Barons de Rothschild (DBR), which also owns Lafite-Rothschild. It produces five what might be called “entry-level” Bordeaux: a basic red and white Bordeaux, a Médoc, a Pauillac, and a Saint-Emilion. (This latter is, of course, not within DBR’s traditional wheelhouse, but was developed in response to the market.)

I have to say how impressed I was by all five wines. The white, which was served as a conversation starter before we sat down for the meal, was fine, clean and savory, a blend of 70% Sauvignon Blanc and 30% Semillon. The red Bordeaux was equally satisfactory, being dry and somewhat austere, although elegant. The official retail price of both–$17.99, although I’ve seen them for less—made me inquire where in the Bay Area I could find them.

As we progressed through the lineup, the red wines all showed true to form: the Médoc more full-bodied than the Bordeaux, the St. Emilion wonderfully delicate and silky, and the Pauillac the darkest and sturdiest of all, as you might expect. The flight was capped off with 2010 Carruades de Lafite, the “second wine” of Lafite-Rothschild, just for the sake of comparison. As good as it was–and it was!–the other wines had nothing to be ashamed of.

During the meal, where most of the other guests (about 15 in all) seemed to be bloggers, the topic arose concerning Bordeaux’s status and popularity in the California market. I weighed in, as is my wont : ) I mentioned that younger people are looking for unusual, often eccentric wines—the kind their parents never drank—which means they’re not drinking Bordeaux. But, I added, there’s a reason why Bordeaux has been the classic red wine in the world for centuries; and that, as they get on with life, I was sure these drinkers would eventually discover Bordeaux—especially reasonably-priced Bordeaux that shows the classic hallmarks of the genre.

At any rate, if you can find these Légende wines, they’re worth checking out!


A comment on marketing, after receiving the latest Bordeaux hype from a press release

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You know, I understanding marketing. When a winery or wine region touts itself as the “best ever,” or “greatest vintage,” or simply uses self-reverential language that makes it sound like it’s sitting at the right hand of God, it’s merely putting its best foot forward in a formal situation—as most of us do.

Say you’re at a job interview, or maybe meeting your new boyfriend’s family for the first time. Of course you’re going to be charming and try to impress these people with what a special fellow you are. You might even do a little discrete bragging…nothing too over-the-top, just enough to let them know you’re better than the average bear. After all, as Rabbi Hillel said two thousand years ago, “If I am not for myself, who will be for me?”

But really, there has to be a limit. Bordeaux (echoed by its various supportive critics) has proclaimed vintages of the century so often, we might have to reinvent the concept of “century” in order to accommodate all those special years. Its image, conjuring up marble palaces and royalty, is the nearest thing in winedom to the regality of the British royal house, itself a product of the greatest marketing the world has ever seen. And certainly, the proprietors of Bordeaux chateaux know a thing or two about pulling off the elite act! On the other hand, certain Napa proprietors who try to mimic the glamor, fashion and mansions of Bordeaux–and they’re out there–are plus royaliste que le roi, more royal than the King. Which makes them tres amusant, although they don’t intend to be.

* * *

A word about the commotion over Justin cutting down those oak trees. I have a long admiration for Justin, one of the icons of Westside Paso Robles. I always liked their wines, and when Justin Baldwin himself owned it, I thought he was a great guy who brought a lot of savvy to a region that needed it.

Now, Justin appears to be experiencing a rather serious backlash because of the tree cutting: restaurants are canceling their accounts and longtime customers say they won’t buy the brand anymore. As one of them noted, in the Paso Robles Daily News, Paso Robles itself is Spanish for “Pass of the Oaks.” Cutting down a bunch of old, beautiful oak trees must hit locals doubly-hard in that lovely part of Central California.

I couldn’t say if Justin’s ownership was right or wrong. There may be mitigating circumstances. Unlike many people, I’ve learned not to take fast positions on topics I haven’t studied. But I can say that the owners, The Wonderful Wine Company, showed surprisingly little foresight into how such a thing would be perceived. This is the age of the Internet, of social media; cutting down those trees provided perfect fodder to the nimbyism that often runs throughout wine country, where people understandably like the rural, scenic ambience and don’t want anybody or anything to mess with it. Surely, the Justin brouhaha testifies to the need to have a public relations consciousness within an enterprise—not necessarily a department, but somebody savvy who can anticipate public reaction and warn management of the potential risks. That does not seem to have been the case at Justin. There are lessons to be learned here for all wineries.


Wednesday Wraparound: Bordeaux and Asti

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The Drinks Business magazine is reporting huge unsold stocks of Bordeaux from the 2010, 2011 and 2012 vintages–the latter two decent, with 2010 exceptional according to most critics. Things are so dire, apparently, that the chairman of Justerini & Brooks, one of London’s top wine merchants, called the dust-gathering stocks “the last chance saloon for the Bordelais.” Distribution chains are “struggling to cope”; supplies “didn’t even get to the market as the merchants and negociants didn’t buy any. In fact, it didn’t get out of the chateau door.”

This chart shows how bad things are. It’s hard to read, but basically, all those lines on the right represent unsold inventory.

 

Livex-chart

This raises interesting questions, beginning with the obvious: Has the Bordeaux car run out of gas? One hesitates profoundly to reach that conclusion concerning the most famous wine region in the world. Bordeaux has survived every catastrophe you can name, from wars and invasions to phylloxera, human plagues and financial Depressions. It would be imprudent to the highest degree to even hint that such a long run at the top is over.

Prices of the most famous wines are, of course, ridiculous, but there are plenty of good red Bordeaux in the $40-$60 range, not just Medocs and Haut-Medocs but from prestigious communes like St.-Julien and St. Estephe. So it’s puzzling to me why more people aren’t buying them. I like a good, dry Bordeaux as an alternative to the big California Cabs and Merlots I also enjoy. I’ll peer into my crystal ball and make this prediction: Don’t count Bordeaux out. Ever.

* * *

Have you ever been to the Asti winery? Probably not, unless you had business there, because it’s not open to the public (at least, it hasn’t been whenever I’ve gone). But it really should be, for it’s an interesting blast from the past in the history of California wine.

As I wrote in my first book, A Wine Journey along the Russian River, the settlement of “Asti” was founded by a man as colorful as Count Haraszthy, Andrea Sbarbaro, who established the original Italian Swiss Colony winery there in 1880, on the banks of the Russian River just south of Cloverdale. In the 1960s, ISC went into a period of decline; the Asti facility deteriorated into a producer of jug wines. Treasury Wine Estates acquired the 536-acre property some time ago, but has now put it on the market, as part of its cost-cutting practices. I hope that whoever buys Asti will love it and restore it as a tourist destination, in addition to whatever winemaking they do there. It’s a lovely place to wander about, with old stone structures, and is frankly perhaps the greatest vantage point from which to learn about and appreciate the history of Alexander Valley, especially its Zinfandels.


How wine can be as cool as beer and cocktails

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It’s certainly true, as Robert Parker pointed out in his recent interview in The Drinks Business, that high wine prices are “a problem and a concern” and that they are creating “a caste system” in which “the younger generation” cannot afford top wines from regions such as “Burgundy, or Bordeaux, or from California.”

But there’s nothing really new about this situation. It’s been so forever. In fact prices for Bordeaux today, adjusted for inflation, are no higher than they were 100 years ago. What is interesting, to me, is the complex psychological contortions by which consumers (and some critics as well) arrive at the conclusion that price is a determinant of quality.

Long ago, vintners understood that the public suffers from this misapprehension. According to Edmund Penning-Rowell, who wrote what is still, to my mind, the most authoritative book on Bordeaux (“The Wines of Bordeaux,” 1969), Baron Phillippe’s [de Rothschild] intense conviction [was] that Mouton-Rothschild was as good as any first growth, and for his money better than most. The only way that this [i.e. rise in its perception by the market] could be achieved was by asking a price as high as any first growth and if possible higher than all.” As Penning-Rowsell later makes clear, the Baron “was able to do this successfully.”

Baron Rothschild, of course, also was the partner of Robert Mondavi in establishing Opus One, which, at the time of its launch (the first vintage was 1979), was the most expensive Californian wine.”

This strongly suggest that Mondavi learned his lesson in pricing from his friend. And we know, from personal experience, how many wineries, faced with tough sales, raised their prices, only to find demand radically increased.

Nowadays, the price of Opus One (about $240 for the 2011) pales in comparison to that of Screaming Eagle ($2,400 for the 2012 in the aftermarket). If your mind works the way most peoples’ minds work (including mine), it can be hard not to be impressed by that kind of price. A rational part of you thinks, “If it costs that much, and knowledgeable people are willing to buy it, then it must be one of the most fabulous wines in the world.” And, of course, these very famous and rare wines always are fabulous. But their prices bear no relationship to their quality, with respect to similar wines from similar appellations. This is why seasoned wine critics taste blind.

Back to Parker. He knows as well as anyone that the Bordeaux, Burgundies and Californians he helped push to astronomical heights can be very difficult to suss out in blind tastings. Why some people continue to buy them is, in fact, a matter for behavioral and cognitive scientists, not wine critics. As for the “younger generation,” I’m not so worried about them. They couldn’t afford Bordeaux First Growths in 1929, when Latour et. al cost nearly three times the price of Gruaud-Larose and Langoa, and they can’t afford it now.

Is price, as Bob speculates, “one reason why such people are turning to drinks other than wine.” ? It could well be, although good craft beer cannot be described as cheap. As I, and many other, observers have noted lately, beer and spirits seem to have the wind at their sails in a way wine at the moment does not, at least in our urban centers. Another question: Has this trend been created and fostered by the media, or did the media simply pick up on something that was already occurring on the street? As usual, it’s a little of both. What craft beer and cocktails have done—which wine has not—is to rise to the level of being cool. All those tattooed young mixologists, those hip brewmeisters, the trendy bars that have popped up from the Mission to Soho—they are the modern face of beer and spirits. What is wine’s modern face? As far as I can tell, it’s a young woman who opts for Pinot Gris on a date, your grandfather, or a somm.

I don’t overly fret about wine’s future because these trends come and go. Wine has been the most successful alcoholic beverage of all time for a very good reason; and what has worked for humans for thousands of years is likely to work for them for thousands more. Nor is wine in any particular financial trouble in the U.S. But it has lost a certain frisson of coolness, or at least the perception, the optics of frisson. In reality, wine is as cool as anything: winemakers themselves are as cool as any dashing mixologist, if not as visible.

But beer, in particular, is on a roll. In Britain, the brew industry is sponsoring a “There’s a beer for that” advertising campaign, crafted by the wildly successful filmmaker Michael Winterbottom (nominated for the Palme d’Or at Cannes), that was launched on Downton Abbey, and also is huge on Twitter and other social media.

If the industry is to lure the under-35 crowd away from beer and spirits to wine, it has to find ways to speak to them in their own language, on their own turf. This involves an accurate and fearless study of how beer and spirits are actually succeeding. One could do worse, as an academic enterprise, to hang out in a Valencia Street bar and study who’s drinking what. I volunteer for this vital work in the field, as the Margaret Mead of the cocktail lounge.


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