I do wonder if this holds less true with certain elite, old-line producers in Napa, and perhaps even some newer ones. Pure speculation but I’d be curious if Bryant is the “canary in the coal mine”, with what is alleged to be massive back-inventory. How many others aren’t selling through? Harlan jumps out at me.
Maybe they can all weather it. Not to go all “Nathyn” but I do think there’s an awful lot of elite pricing in Napa propped up by a lot of easy money / artificial wealth. What happens when the music ends?
I think we will see a lot of “elite” wineries, or certainly those that price elitely, get blown-up. Especially those that are relying on leverage. Will it be some sort of paradigm shift/ permanent awakening? No. But I doo think there will be a correction at some point, and likely in the not to distant future.
James, I don’t want to speak for GregP but I think he was responding to the generalization. If you ask whether anyone makes a dry wine in the entire state, then you’re setting yourself up. Nathan is no dummy - he knew what he was doing. Just got the response in kind.
GregP is a valuable contributor.
I do think there’s an awful lot of elite pricing in Napa propped up by a lot of easy money / artificial wealth. What happens when the music ends?
Garagiste just offered a “mystery” wine at $400+. Any guesses as to what it was?
Search Nathan’s posts for some… interesting… reading. Or don’t. Common theme of his: decry sweetness in, i.e. Chablis, then recommend Prosecco and Alsatian Riesling as alternatives. . You can only cry wolf so many times before people stop politely asking for details regarding its appearance and location.
Sounds like he’s confusing wines that smell sweet with wines that are sweet. Since one cannot actually smell sweet, it is an association of the mind. The real generalization is California wines have more fruity esters than European wines. Ambient fermentation, allowing the local yeasts that happen to not produce as much esters would be one of the culprits.
One specific example that somewhat contradicts this. In one particular, smaller, high-end AVA in California, the largest vineyard in the area was under contract to Constellation. Constellation dumped the contract - simply said they weren’t going to pay for the grapes. The owners of the vineyard ended up leasing the vineyard to someone for the cost of farming from July 1 through harvest (guessing around $1000 per acre). At 4ish tons per acre (fairly closely spaced) the fruit that is sold is down to $250 a ton cost. The new person leasing the vineyard is going to sell what he can at between $500-$1000 a ton and then drop any fruit he can’t sell on the ground. That means that approximately 19 percent of the fruit in this AVA is now doing to be sold at $500-$1000 a ton (where the going average price has been around $3000 a ton previously).
Just a touch of clarification, which isn’t to counter your point of there being dry CA (or US for that matter) wine. I have seen and heard of wineries that will press off at around 0 brix and finish fermentation (getting to -2 brix or so) in barrel or tank. It is hard to get every last bit of sugar out of the grapes in a fermenter of whole cluster without pressing, so if you think you’re fully dry in that scenario and then press, you’ll have a little RS in your barrels (which will then likely ferment if the barrel room is warm enough).
I do wonder, though, why anyone ever tries to reason with Nathan or get him to make sense. There is no point. Everyone can see his posts for what they are.
I have been quietly offered fruit I’ve not seen available in a long time. Two years ago there was nothing available. Now even some great vineyards are. And at prices below what I would have guessed. But I am standing pat at my current size for at least another year or so. I don’t know many taking advantage of the availability. Any grower that raises prices right now will lose clients. Have not seen this dynamic since about 2010.
The answer to the OP question is simple. My farm does corn and soybeans. Swine flu knocked out a lot of hogs in China and there went demand! Prices are cratering because the American farmer doesn’t want to cut production to meet demand. The general expectation is for farm values to fall along with multiple bankruptcies forcing a drop in production.
Look at all the dairy farmers from 10-20 Tagore no longer in the business. Overproduction lead to dirt cheap prices for milk which eventually thinned the herds. Ten to Fifteen years ago most everyone was asking where were all those grapes being brought online in newly planted vineyards in the Willamette going to go.
Except that corn, soybeans, and pigs are considered commodities, whereas not all grapes are. But apparently even special grapes are commodity-like these days based on what Roy and Alan have said.
Adam - they did have some kind of written contract though, didn’t they? Seems like Constellation would owe them something, no? That seems pretty outrageous.
I talked to an industry heavyweight yesterday. He said there is 5,000 tons of Mendocino Chardonnay unsold, there is 5,000 tons of Napa cabernet unsold AND 10,000 tons of Paso cabernet unsold. If we ever needed a smaller-than-normal crop this would have been the year.
Saw an article in Sonoma Valley paper last week claiming roughly 2,000 tons of unsold fruit there, no breakdown of varietals. Though what was left unsaid is the quality level of fruit in question, something tells me all the high end grapes were under contract and sold. To be honest, I see people asking prices that have no real reflection of the (lack of) quality/AVA, maybe its time some have an attitude adjustment (had an interesting discussion this past weekend with vineyard owner in Santa Cruz, simply mind blowing in retrospect, I walked away). Some base their prices on “Well, my neighbor is getting $$$$, therefore I am also entitled”, never mind better mix of clones planted across the fence and way better vineyard management, to boot. Been long overdue.
Another issue that will eventually come to a head, is larger wineries “locking” entire vineyards under contract, long term, without actually having ability/capacity/distribution/sales to use all of the fruit, but simply making it unavailable to others, mostly small guys. Basically, artificial price control. If/when prices come down, consumers will win with lower bottle price. Win/win in my book.
Just got back from a pick in Lodi. Farmer had 10 acres of Zin he can’t sell for $700/ton, good fruit. Across the street Gallo machine picks a big Zin field and pays $180/ton.
I think that a lot of fruit out there is due to the big merger delay and cancelled contracts because of it, that is a lot of brands and wine being held up. We look at the listings weekly to see if there is anything that fits what we are looking for. Those vineyards don’t seem to be on the market at seriously reduced prices, even behind the scenes. So far only one top quality block that had a cancelled contract looking for a buyer that I’ve talked to. Several high altitude Chardonnay blocks but the prices are still as high as the mountain. So far nothing that has caught my eye other than a tiny plot on the very edge as an experiment. I think in other years the supply would be sucked up but wineries are taking cautious approach and trying to not get drawn into the lure of good cheap fruit. Old adage - easy to make, hard to sell. Best plan is to get into excellent vineyards and stay there or grow great fruit. I can imagine soon having years like 15 and 16 again and then we will be back to the situation where if you don’t have dirt you get whipsawed by the pricing.
I am seeing lots of small growers in less than desirable locations really struggling to sell. There will be a lot of hurt there, but wine will still be made and there will still be people willing to pay a premium, particularly in the bay area. I heard one client say that they were in Napa and found a new iPhone11 outside a tasting room. They contacted the owner but found out the that owner didn’t care and had already bought and activated new one. I can’t see any reason to get worked up over pricing as there is wine at all price points for all types of drinkers. Is it too expensive or not as good as another wine less expensive? I don’t think it is as simple as that since there is all kinds of psychology that goes into judging wine. And saying “I can get this great fruit from X location that is amazing at half the price because it is from a lesser area but will make better wine” seems to discount all the investment in marketing effort and history of great wine from that place that the better locations have done to drive the price of said fruit, not to mention the psychology attached to named SVDs. Often times the 1% rule is what it is though there is plenty of greed out there (maybe that is what Adam is really reacting to). Grapocalypse? Perhaps for some and I don’t doubt that there is a lot of people hoping for a comeuppance for those that are greedy but I think that is bad for the industry and you will end up being disappointed as there is plenty of cash sloshing around to keep those people in business. I don’t see Gaps Crown PN becoming any more available nor getting less expensive. Don’t have the dough to make Gaps? Fine, but I don’t see a point in railing against winemakers that need to charge a high price based on fruit costs and seem to be selling all their wine. According to the article today, whatever isn’t sold will be sold by Cameron Hughs at Costco anyway, and he will still be pissed that he doesn’t get the same score using the same wine. Hmmm, Hermes iWatch vs. iWatch?
AFA Rob -
He gave his millennial and oversupply presentation to the Petaluma Gap earlier this year and it seemed all doom and gloom. He did have some optimistic suggestions and thoughts, though (Craft beer declining for one). But, mainly what I took away from the presentation was that the wine industry is not taking the neo-prohibitionist movement that is scaring the younger drinkers dry seriously enough (he particularly railed on the poorly researched Lancet article). There needs to be a greater, more concerted effort in marketing and advertising to rebuke the false claims circulation recently.
I see your point. I see the new Napa model for growth of raiding Sonoma for PN that they can sell for a lot more in Napa or in their newly minted Sonoma vineyards/wineries/tasting rooms. This is driving up costs significantly for the Sonoma side, but that is business. I can get wound up about it or I can see it as a possibility for better times going forward for tourism. I doubt that those coming over are underfunded or have not thought out the sales/dist side of things, though. One of the interesting things I have heard of and experienced personally is Constellation buying up or locking up properties for Meomi. There seems to be no slow-down there.
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