Napa hunkers down in recession mode; Premier Napa Valley takes hit
I was up in Napa Valley for a couple days to check out the Rutherford area for an upcoming article in Wine Enthusiast, and then on to Premier Napa Valley on Saturday. Napa was very beautiful and warm between winter storms. The skies were clear, Mount St. Helena’s peaks were dusted with snowy white, the flowering plum trees were pink, and every vineyard and hillside was splashed with cheery yellow mustard blossom. But people seemed to have the blues.
The view from Rubicon, looking north
Everywhere I went, I asked winery folks how business was going, and the answer invariably was a shrug of the shoulders or a roll heavenward of the eyes. Winery owners large and small told me things are tough; they’re hanging in there, hoping for better times. A friend, a wealthy grower, cracked that even the multi-millionaires are scared: they used to be worth $20 million and now it’s only $10 million. I went to Dean & DeLuca’s wine store, filled with dozens of tiny-production Cabs priced from $75 to $100 and up. “How’s high-end Cab doing?” I asked the guy working the floor. He shook his head. “Terrible.” People just aren’t buying anymore.
I stopped by the Oakville Grocery for lunch. There were two beefy guys, contractor-types, grabbing coffee and danish. I overheard one tell the other, “I told him I have to cut his salary if he wants to stay employed. Hell, I cut my own salary 25 percent.” As I handed my credit card to the lady at the register, the guy said to me, “You wouldn’t be needin’ any work, would ya?” I laughed and said, “Only if you let me pay on credit.” He laughed back. There’s a kind of grim, gallow’s humor these days, even in Oakville.
Went to a famous cult winery and asked the winemaker how sales are doing. Pretty good direct, he said, meaning through the tasting room and wine club, “but New York is dead.” The head of another cult winery said he’s seeing a big drop in off-premise sales, which is a mainstay of cult Cabs. “A lot of this is anecdotal,” he shared, “but we hear about restaurants closing all over the country, and customers shifting from going out to dinner to buying more of their wines at stores.” No way will 2009 repeat the sales of 2008, he fretted.
On the other hand, the parking lot at Auberge du Soleil was jammed, while limo drivers waited out along the curb on winding Rutherford Hill Road, to whisk sated guests back to whence they came.
But of course it was Premier Napa Valley weekend, second in importance only to the Napa Wine Auction itself, and an important gauge as to how the economy is doing; and in Napa, topic number one was the collapse of the Naples [Florida] Winter Wine Auction. Held Feb. 7, it saw the take plunge to $5 million from 2008’s $14 million, a shocking fall of 65 percent. Everybody was wondering if it could happen here. During the barrel tasting at the Culinary Institute of America, a winery owner confided, “I’ll be amazed if PNV does half of last year,” when the auction fetched $2.2 million.
Well, in the end, PNV did better than that: nearly $1.5 million, or about 68 percent of last year’s haul. In his article in the Napa Register, my old friend, the writer Pierce Carson, called that “exceeding expectations” because the fears of a fall off the cliff had been so widespread. I guess that’s true, but still, when you’re down 32 percent from a year ago, it’s not really good news.
Interesting to hear about the wine biz.
I guess if you’re down to $10 mil you could drink two buck chuck when you’re alone in your mansion and nobody else would know. But, if you missed a big event in the valley EVERYBODY would know about that. You’d just have to be careful that nobody saw you head in and out of trader joe’s.
Meow.
So you had to go and mention Oakville Grocery… and now I’m really hungry….!
killer crab cakes.
It’s an interesting recession when retailers and restaurateurs from around the U.S. and overseas pay an average of $94 a bottle for 15,780 bottles of wine while they fill up Auberge du Soleil and clog local restaurants for four days. Particularly interesting since these wines will surely be marked up further before getting to the customer some six months to three years from today.
I’m not sure what this means on the day the stock market hit a 10 year low, but in 2000 the average Premiere price was $101 a bottle and you could get a case for an average price of $1220. Seems like we just stepped back 10 years.
Another observation is that Napa Valley Premiere which is not a charity was down 34% in revenues while the Naples event which is a charity was off 65%. I wonder how many Naples bidders had Bernie for an investment banker?
Morton, even in the Depression there were rich people buying stuff. I expect that no matter how bad things get — and they look bad — Napa Valley will have limos, designer gowns, and jewels. I don’t know what to make of your other observations, except to tell you that anyone who had Bernie for their “banker” is not buying expensive wines. Believe me, I know whereof I speak.
Good post, Steve. Living in flyover country, anything selling over $40 retail is done, for now.