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Crowdfunding your Napa Valley Cab: is it tacky, or smart?

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Nothing illustrates the entrepreneurial challenge of a cult Napa Cab staying relevant than Yao Ming’s turning to crowdfunding for his winery’s financial needs.

When his wines hit the market, I was as excited as anyone. I gave the 2009 Family Reserve 97 points—the highest of any critic I’ve yet seen (although only by a hair). It was a big, big score for stingy old me—and the next year, I was even more generous, with 98 points for the 2010. The wines were glorious examples of modern Napa Valley Cabernet, but the prices were absurd: $625 the bottle for both vintages. I figured Yao Ming figured he had a lock on the wealthy Chinese market, at a time when it was seemingly willing to spend anything on great wine, so why not go for the gold? After all, he was one of the biggest Chinese-American superstars of the decade, maybe ever.

Now here we are five years later, when the Wall Street Journal is reporting that “As China’s luxury wine market cools,” Mr. Yao is being forced to change his business model. With Beijing’s anti-corruption campaign sapping demand for expensive wines,” the paper says, “Yao Family Wines is shifting its focus from Chinese banquet tables to US steak houses.”

Wow. That’s quite a radical change in business model. Do you think that $625 retail bottle price can survive the transition to steak houses? I don’t. Who’s going to pay $1,000 for a bottle of Napa Valley Cabernet Sauvignon to drink with the rib eye and baked potato? Perhaps the wine Yao Ming is aiming at American steakhouses is their second-label Napa Crest brand that retails for $48. It’s a solid wine: I gave the 2010 91 points, and my successor in Napa Valley reviewing, Virginie Boone, gave the 2011 90 points. But I think they’re talking about the Yao Family Cab. Whatever the case, the crowdfunding suggests that Mr. Yao is having some difficulties earning enough money to keep his business going through sales alone and is turning to this new, promising but largely unexplored area of crowdfunding to raise money from the masses.

Is there any shame about crowdfunding? I’m undecided. It may well be a wave of the future type thing. After all, we think nothing of a startup Silicon Valley firm taking venture capital from wealthy angels; in fact, it’s a source of pride that a smart, rich investor would think highly enough of a company’s prospects to put her money into it. I suppose that crowdfunding, of the sort Mr. Yao is engaging in (“as little as $US5,000 per person,” the Wall Street Journal says), is simply venture capital for the hoi polloi.

Still, it does make one wonder. What would we think if, say, Screaming Eagle, Araujo, Harlan, Bryant Family or Colgin announced they were crowdfunding? I think there would be a lot of raised eyebrows, and even, perhaps, some upset people on their mailing lists, who might feel that turning the reins over to “the crowd” was impinging on their notion of exclusivity.

Perhaps this is the way to expand an empire that’s already flourishing and can flourish even more. Yao Ming says he wants the money to (in the Wall Street Journal’s reporting) “build a visitor center in Napa Valley and a tasting room in Shanghai.” Given the current blowback from wine country residents against new tourist facilities, Mr. Yao may have some ‘splainin’ to do in Napa Valley. But I suspect that hundreds, if not thousands, of people will want to send him their money, to be connected with his brand, to get whatever perks or discounts they’re entitled to on the wines, and to just have the feeling that you don’t need to be a multi-gazillionaire to have a little bit of ownership in a Napa Valley winery.


Tastemakers are ready for a return to classicism

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You can’t really blame the famous Napa Valley wineries that came of age in the 1970s for running out of steam a little bit by now. The problem, to the extent there is one and I think there obviously has been, is that American wine writers and sommeliers (a group included in the larger group of “tastemakers”) tend to be a fickle bunch. Writers, especially, suffer from “what’s new?” syndrome: Witness the obsession verging on mania of all those “rising stars” and “wineries to watch” articles in the wine press. As a former member of that establishment, I can tell you that the pressure on “what’s new?”– from editors and publishers and your fellow writers–is tremendous. There’s little in it for the hard-working wine writer to remind the public that a forty-year old Napa Valley winery is producing fantastic wines. Nobody wants to hear it. They want to hear about the sexy newcomer who just got 100 points from [fill in the blank].

This is the truth, but it isn’t entirely the fault of the people who are paid to market and promote these wineries. They’re fighting an uphill battle. Our throwaway culture wants youth, not longevity—ask any Hollywood actress over 40 (except Meryl Streep). One day, you’re 22-year old Winona Ryder, garnering wows for The Age of Innocence and Little Women. The next, you’re in your forties and doing Frankenweenie.

It’s sad and pathetic—tragic, even—but, like Tony Soprano always said, What you gonna do? There are two important take-homes here: One concerns how those 40-something year-old Napa wineries stay relevant in the second decade of the 21st century. The other is, How does a young modern winery plan to stay relevant in 2050?

To stay relevant, the older wineries have to be smart. Just as people of a certain age (me included) understand that, to keep the weight off and stay trim, you have to burn more calories than ever (because your metabolism slows down), so too the older winery needs to step up the pace. But that doesn’t necessarily mean working harder: It means being more intelligent and efficient. To continue my analogy, it doesn’t mean the older person has to stay on the treadmill twice as long (although it could), it also means she has to be more careful about the food she eats. When you’re twenty you burn off that double bacon cheeseburger in five seconds; when you’re older, it’s “from the lips to the hips.”

In the same way, the older winery has to work smarter. If that means learning about social media, even if they think it’s stupid, so be it. But it could also mean taking a long, hard, honest look at your wines and asking yourself if they’re really what people want to drink these days. If you’re convinced they are, then say so! Loud and proud.

The younger winery that’s planning to be around in 30 years also needs a game plan. Staying lean, limber and quick isn’t all that hard if you’re already lean, limber and quick. But it’s really hard when you’ve become bloated and lazy. If I was 28 and running my own winery, I like to think I’d know how to keep the ball rolling. Work on DTC. Be out there on the road, meeting consumers, accounts and tastemakers. Do social media. Connect, connect, connect. Taste widely and often. And please, understand history!!!

So what do I mean by the headline, “A return to classicism”? I truly think that in our world of wine the OCD of “new new new” is shifting as people realize that what’s “new” isn’t necessarily better. Not that there’s anything wrong with a new winery—not saying that! But we mustn’t get so mesmerized by these new cult wineries that we throw the baby out with the bathwater and relegate older wineries to some kind of netherworld populated only by your grandfather’s ghost. The truth is—and it bears repeating again and again—what has long been great is worth everybody’s attention. Wine has been the greatest beverage in history because it is the only one (beer and spirits included) that can follow the arc of greatness over centuries down to the individual winery level. Indeed, this is why Europe has Grand Crus. Well, guess what? So does California, albeit in a shrunken time span. If you’re a younger wine drinker, a younger somm or blogger, whatever, you owe it to yourself to understand the classic wines of California—and you owe it, not just to yourself, but to your customers and clients and, indeed, to the history and soul of wine itself.


Are consultants “killing” wine?

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They’re easy to pick on, those flying winemakers, like Michel Rolland, who travel the world getting big bucks for advising wineries on how to get 95 points from Parker.

And they do get picked on! Mondovino, the 2004 movie, famously took on Rolland, showing a small vigneron who declared that “Wine is dead” due to people like Rolland, who it was said bring an “internationalization” of wine flavors; and the director even brought Michael Mondavi in to talk about “the globalization of wine.” It didn’t help to show Rolland, in the back of his car being driven somewhere, on a phone laughing about “These journalists, if you don’t hit them on the head, they can’t remember a thing.”

As a journalist, I resemble that remark (as Groucho said), even though I totally understand it. There are some “journalists” who will repeat anything they’re told, without the slightest effort at fact-checking.

It would take a telephone book to list all the Bordeaux chateaux associated with Rolland. In California, the list is smaller, but impressive, and includes or has included Harlan, Dalla Valle, Sloan, Staglin, Araujo, BOND, Bryant. These are wines I’m more familiar with. Are they all the same? Are they marked by an “international” character? Has Michel Rolland, and people like him, in fact “killed” wine?

Affirmative on that, according to a Saumur winemaker, Thierry Germain, whom the drinks business wrote about yesterday. They quoted him as saying, “Wine consultants are like plastic surgeons trying to make ugly wines beautiful. There’s a trend at the moment for trying to create beautiful wines over authentic wines. The result is that they end up tasting fake and artificial.”

Wow, tough words. This is, of course, the territory of “authenticity” that critics like Matt Kramer and Jon Bonné have been exploring for years. I never fully subscribed to their black-and-white notion that some wines are authentic while others are fake, for the simple reason that too many consultant-driven wines–Harlan, Staglin, Araujo etc.– are so stupendously delicious that you wonder how much better red table wine ever can be.

Still, I have to say there’s a certain sameness to these Napa Valley cult wines that reminds me of the contestants in a beauty pageant.

 

MissUniverse

While you have to admit these women are stellar examples of what we (or some people) think of as traditional female beauty, there is a certain, uhh, sameness to them, as well as an implication that women who do not conform to that particular template of “beauty” are, by definition, unbeautiful. I know a lot of women—men, too—who are utterly turned off by this exclusionary attitude. Men, too (including me), suffer from these stereotypes: if you’re not tall, buffed and handsome, you have far less of a chance of getting a top job, or even of being respected. (I’ve done research on this and I know what I’m talking about.)

Well, the gender wars are tricky, so I’m getting out now, but the fact remains that it’s not surprising that wines “advised” or “consulted on” by the same consultant should bear a certain similarity to each other. It’s like a guy who impregnates multiple women who then have his children. While all the kids will possess certain inherited traits from their moms, they’ll also all have things they got from dad, and in that sense, they’ll be alike. Whether this is good, bad, or angels-dancing-on-pinheads navel-gazing (to mix metaphors) is, I suppose, in the eye of the beholder.

I, myself, have always wondered why a winery would hire a famous consultant. Don’t they trust their everyday winemaker? Don’t they trust their growers? How would you feel if you got a great job as a winemaker and the next thing you know, your employer tells you he’s bringing in Michel Rolland as a consultant? What does a consulting winemaker bring to the table, anyway, except bragging rights for ownership? It’s never been clear to me. I guess if a winery is just starting out, and their winemaker doesn’t have much experience, then sure, bring in an expert, to be the training wheels for a vintage or two. But the top winemakers I’ve known for the last 30 years—and I’ve known most of them in California–neither want nor need outside help. They just ask to be given good grapes, and then enough of a budget to make good wine, and some time to figure out how to express the vineyard’s potential. If you can tell me why these consultants are necessary (rather than just bling), please do.


Why do people buy wine?

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There’s a million reasons, of course, but one that’s interested me for years is why they’re willing to pay a premium for some wines and not for others. And in some cases, a huge premium.

The plain and simple fact is that a $1,000 wine isn’t ten times better than a $100 wine or 20 times better than a $50 wine. In fact, you could make a strong argument (which I guess I’m making now) that, once you get above a certain price, there’s less and less difference between wines. That $500 bottle of Napa Valley Cabernet Sauvignon isn’t necessarily better than a $50 Napa Cab.

We have to define what “better” means, though, before we can proceed. By “better” I mean the wine’s hedonistic or organoleptic or purely sensory qualities: the flavors, the way it feels in the mouth, the finish. In a great winemaking region such as Napa Valley, where the overall quality is as high as anywhere on earth, the consumer can rightfully expect a certain standard of excellence once the wine gets to, say, $40. This is why you can make a blind tasting and often a more modestly priced Cab will win.

Which returns us to the question: If the $500 Cab and the $50 Cab are so alike in objective quality, then why would anyone in their right mind buy the former?

Well, you have divined the answer, haven’t you, dear reader? It’s because, when it comes to paying these astronomical prices, there’s nothing objective whatever going on in the buyer’s mind. It’s all subjectivity.

How does this subjectivity work? We get a hint of the mechanism by reading this description of a tasting set up by a crafty Frenchman, Frédéric Brochet, who fooled a bunch of so-called connossieurs. “[He] decanted the same ordinary bordeaux into a bottle with a budget label and one with that of a grand cru. When the connoisseurs tasted the ‘grand cru’ they rhapsodised its excellence while decrying the ‘table’ version as flat.”

If you’re a regular reader of this blog, and of wine news in general, you’ve no doubt heard enough of these kinds of experiments to know that they demonstrate the point I’m trying to make: Your experience of the wine all depends on what you think you’re drinking.

My goal today, though, isn’t to reiterate this point, but to try and rehabilitate the reputations of people who routinely get fooled in these tastings, and to show that they’re not total idiots, and you shouldn’t condemn them as such. Instead, their very failure to perceive reality illustrates one of the best reasons to drink fine wine: because it satisfies, not just the senses, but the intellect.

When I taste Lafite Rothschild, for example, and I know what it is (nobody tastes Lafite blind), I have to admit my soul lights up. I get excited. I pay very careful attention, because this is, after all, Lafite. I know the back-story: First Growth of Bordeaux. Ancient history. One of the greatest red wines in the world. Thomas friggin’ Jefferson loved it. My reaction similarly would be the same as, say, being given the Koh-i-Noor diamond, as opposed to costume jewelry. If you gave me the Koh-i-Noor (you’d have to wrestle it away from Queen Elizabeth first), you just know I’d stare at it and bring it up to the light and look through it and ogle it and go ooh and ahh and remember that moment forever. Now, on my own, I’m sure I couldn’t tell the difference between the Koh-i-Noor and a cubic zirconium from QVC, but that’s precisely the point: in our little thought experiment, I do know the difference. And that makes all the difference.

This subjectivity explains why wines of equal or almost equal quality may vary so widely in price. The pleasure of drinking Lafite consists of far more than merely what the wine tastes like. This is something that’s hard for outsiders to understand, but which is easy for a wine geek. To think that you’re in a limited circle of people privileged to taste something as exclusive and expensive as Lafite boosts your love and appreciation of the wine. This may sound snobbish to some people, but it’s perfectly understandable. It’s occurring in the brain, the seat of thinking and understanding; and pleasuring that part of the cerebral cortex is as important as pleasuring the senses, maybe even more so.

So I’m arguing for some understanding for these poor schlemiels who get caught in these wine tasting entrapments. It could happen to you, it could happen to me, and in fact, it has. What it says about wine isn’t that it cheapens the experience or levels the playing field, but that it elevates wine tasting to a fine art whose appreciation requires knowledge and understanding. As the physicist/mathematician, Freeman Dyson, observed, “Mind and intelligence are woven into the fabric of our universe in a way that altogether surpasses our understanding.” What we think is, for each of us, reality; it’s our collective thinking that elevates Lafite to Grand Cru-ness.


On “flying winemakers”: Are they good or bad for wine?

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One of the most interesting and controversial topics of the modern wine industry is the phenomenon of the “flying winemaker.” This is the term, which I first heard in the 1990s, that refers to a class of men and women who hire themselves out to wineries as consultants; they are “flying” because their preferred mode of transportation is of course the jet plane.

But they are much more than mere consultants. Their name, attached to a wine on a press release, automatically confers prestige, the way, say, Steven Spielberg’s name as producer of a movie is a sort of guarantee of the film’s pedigree.

The name most often conjured up by “flying winemaker” is that of Michel Rolland. I knew he consults for a lot of wineries around the world, but I never knew that the number was up to two hundred, according to this article in Harpers. Among his Napa Valley clients, current and/or previous, I’m aware of are Harlan, Screaming Eagle, Alpha Omega, Dancing Hares, Staglin, Dalla Valle and Sloan—in other words, absolutely the peak of Napa Valley (if not the New World) in terms of price and quality (at least, as judged by the top critics). These are the famous “cult wines” that define a region’s reputation and in fact establish its upper or outer limits of quality and perception by the wine world’s cognoscenti.

This would be all well and good, except that over the last fifteen years or so—let’s say, roughly from the start of the new century—a certain drumbeat of criticism has arisen among some critics, to the effect that an increase in the activities of these flying winemakers has resulted in a standardization or sameness in all the wines with which the consultant is associated. In fact, this critique goes even further: it says that all flying winemakers bring a similar approach to all their client wines, making these wines all taste similarly to each other, regardless of who made them or whether they are from Napa Valley or Pomerol or Chile. This sameness has been referred to as the “globalization of wine” or “the international style,” terms meant to suggest that all wines of the same varietal type—most usually, Cabernet Sauvignon and its allied varieties—smell and taste alike. In the eyes of the critics of such globalization, this is tantamount to a crime, since it obliterates the notion of terroir.

This is a serious debate and a good one to have. I’ve never been one to take an extremist position one way or the other, as some American critics and newspaper columnists do in utterly condemning these “international” wines. Their criticisms usually also have to do with what they perceive as excessive ripeness, over-oakiness and an alcohol level (often approaching if not exceeding 15%) which, they claim, elevates technique over terroir.

My reluctance to join these reporters has been based on the simple fact that many of the Cabernets associated with Michel Rolland and other flying winemakers are, in fact, gorgeous. They are among the richest, most sumptuous wines ever produced in the history of the world, and it is churlish, if not somewhat childish, to object to them based on some philosophical or ideological notion. This deliciousness seems to be what Rolland himself referred to when he told Harpers that all he strives to do is to produce wines that are “intense, full bodied, balanced, harmonious, with delicate tannins and a long finish.” This description certainly fits the Napa Valley wines I’m familiar with that Rolland consults for, but the problem, which you see is obvious by now, is that the same description fits all of them, which seems to hoist Rolland on his own petard. He has provided us with the template for an international style of Cabernet Sauvignon. And here, I must say that, in California at least, there is an ersatz style that mimics the international style on the surface, but that on closer examination results in lazy, flamboyant but eventually tiring wines. One has to be very careful in approaching the international style, lest he throw the baby out with the bathwater!

Harpers headlines their article “Michel Rolland defends his ability to manage wines on up to 200 wineries around the world,” and while the word “defends” is perhaps hyperbolic on Harper’s part, Rolland no doubt feels a little beleaguered. He must be aware of the criticism (although one suspects he cries all the way to the bank). Supporting the critics is the commonsense notion that one can only be in one place at a time, and even in this age of the jet plane, to have to be in so many places all over the world, having to apply one’s conscientious attention to so many properties, especially at the harvest, must be challenging to say the least. Heidi Barrett, herself one of California’s most famous flying winemakers (although she more properly might be called a “driving winemaker,” for she only accepts clients that are “within a half hour” drive of her Calistoga home), notes that she limits her number of clients for the most pragmatic of reasons. “Realistically, when things are fermenting I must taste every tank, every day, and so I’m going to four locations, and that maxes me out. Some days I barely get everywhere.” (These quotes are from my 2008 book, New Classic Winemakers of California: Conversations with Steve Heimoff.”)

Historically, we are at a point now where there is more or less an equilibrium between the international or global style, which admittedly is a ripe, expressive one, and a more restrained (one could almost say timid) approach, encouraged if not caused by the critics of the international style, who tend to have big platforms and the egos to fill them. I said we’re at “a point,” not “a tipping point.” I don’t think the balance will alter anytime soon, one way or the other. The wine market is simply too big and fractured for any large-scale revolutions to happen, despite alleged claims from some quarters that one is underway now. In the midst of such a complex market, winemakers hedge their bets; better to stick with a style that’s worked for you up to now, than to throw the dice and risk unnecessary changes that might alienate your customers. Finally, we come to the cases of new entrants to the production game, a younger generation that’s decided to live the wine life. They have, it seems to me, two choices, in the widest sense: to appeal to the international style, or to make wines more severe and that will, they hope, win the praises of the newspaper columnists who like that streamlined approach. They might as well flip a coin, given the standoff, and follow their hearts—always the best thing to do.


Millennials and Napa Cabernet: An uneasy relationship

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The most interesting part of Silicon Valley Bank’s new report on the future of the wine industry concerns its predictions about Millennials. As Baby Boomers age and die off, Millennials will become the U.S.’s dominant wine purchasers, but “The big issue with millennials is they’re the largest buyers of international wines. They’re also really good with buying the discounted bottles,” said the bank’s founder, Rob McMillan.

International wines and discounted bottles. Hmm. That’s good news for South America, Australia and old Europe, and also good news for California companies like Cameron Hughes, Gallo, Bronco, The Wine Group and others who sell inexpensive wines. But what are the implications for high-end wine, particularly Napa Valley Cabernet Sauvignon?

They can’t be good. Millennials didn’t grow up worshiping at the shrine of Bordeaux, which is the model that Napa Valley mimics, and so far they [Millennials] haven’t given any indication they’re in the thrall of the cults. And why should they be? Millennials pride themselves on their independence. They’re not as hidebound as their parents, and they’re a lot more open to new experiences. Nor are they as hung up with matters of prestige and conspicuous consumption, which are two phenomena that–like it or not–are associated with the allure of cult Cabernet Sauvignon.

There are so many anecdotes about high-end Napa wineries having difficulty unloading product. Like the old saying goes, where there’s smoke, there’s fire. Triple-digit Cabs took a real hit during the Recession, and there’s no evidence that they’re recovering now. What I hear through the grapevine is remarkably consistent: retailers who traditionally dealt with expensive Napa wine tell me they can’t even give it away anymore.

Here’s a bullet quote from the Silicon Valley Bank report: “Today we find ourselves at a crossroads, one in which the younger consumer is being trained to believe luxury purchases should come with a discount, and wine is as good or even better coming from foreign sources. With Boomers hitting retirement age, we have a real question about the ability to increase wine sales when older generations who are willing to pay for a good bottle simply can’t consume the volumes they used to, and younger generations can’t afford a good bottle but could consume more.”

That’s an uh-oh moment for the cults. But there is a potential bright spot: “But as Millennials age if they develop the capacity (income) to buy wine, and if their appreciation for wine is strong as reported in the press, they will be the long-term growth opportunity we can anticipate in the business out past 2020,” McMillan writes.

That’s a big “if.” Actually, two big “ifs.” It means that a generation that grew up on Madonna, Pixar movies, Friends and the Internet is suddenly going to turn 40 (starting around 2022) and then develop an infatuation with Screaming Eagle, Colgin and Bryant. Exactly how is that supposed to happen? Why? Isn’t it easier to think it won’t? Besides, even if their income rises so high that they can afford triple digits for wine, why should Millennals restrict their appetites to Napa Valley? McMillan repeatedly stresses the “international” orientation of Millennials. They would look abroad for prestige wines, further eroding the market for high-end domestic wine.

Ever since I started visiting Napa Valley, in the late 1970s, it’s been clear to me that the vintners up there, who are a smart bunch, looked to Bordeaux as their model and inspiration. They wanted their wines to have the worldwide prestige of Bordeaux–and they also wanted Bordeaux prices. That tendency only grew more pronounced in the 1980s and 1990s. Today, it’s the prevailing model in Napa Valley.

But could it be based on a false assumption? That assumption was, if Bordeaux could do it, Napa can, too. However, history (and markets) are replete with singularities. Bordeaux came of age when good wine was scarce. Because the Bordelaise, and the Englishmen who drank their wines, were masters of the export trade, which was then a virtual monopoly of the English by the 18th and 19th centuries, Bordeaux became the lingua franca of great wine, for the wealthy white landowners who could afford it,

Do any of those conditions exist today? There is no monopoly of trade. Instead, we have free trade across the world, making it much more difficult for any one product or region to dominate the market. A few gatekeepers can no longer influence whatt everybody else drinks. And good wine is no longer scarce. It’s ubiquitous. You can’t swing a dead chicken without hitting a bottle of something tasty. Nor are most consumers any longer wealthy, white, or landed gentry. There also is the problem, in Napa Valley (to which I alluded the other day in this post) that Napa is not proving to be adept at new forms of communication. There’s a growing hideboundness affecting the culture up there. Of course, we do hear from the “Next Gen” of Napa winery families that they’re concerned about this or that, and intend to craft a message that relates better to average people. But this article, which appeared last week in the San Francisco Chronicle (and has been widely ridiculed, even in Napa Valley), suggests that the Napans may have an uphill battle in their quest for Millennial credibility

Have a great weekend!


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