This blows my mind. I had no idea Daou had gained anything close to this much traction. … although the comparison may be entirely bad (e.g.: craft beer isn’t fine wine (I think, in this context, we have to concede Daou as Fine Wine, right?)), I can’t ignore that this reminds me of the big Ballast Point sale years ago.
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What would someone say is the hook that Daou has in terms of its popularity?
I get why Rombauer chardonnay/zin are popular, same for Meiomi, Caymus, Prisoner, Kim Crawford. I also understand that Silver Oak has cornered a certain place in the wine universe (not so much because of what is in the glass, but kind of a cultural spot).
How would you summarize “this is why Daou has become such a huge deal?”
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I believe it’s the psychology of luxury, Daou feels European yet the wine styles are decidedly New World and you can pronounce it. The packaging is somewhat timeless and recognizable at the entry level, and not to mention what they do with Soul of a Lion. Wrap that in the cloak of a beautiful tasting room and ambiance and you have luxury.
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Daou became a 1 Billion Dollar Deal because of their hallowed hill and 400 acres in Paso which is an area that has massive growth potential land value wise but also a brand that already has recognition and can likely grow in production/distribution. A lot of chips were thrown at this hand. Hope Treasury handles this venture wisely. Hats off to the Daou family. Cha-Ching!!!
I had to look into this further because the numbers made no sense. I heard from a good source that they produced over a million cases last year. If true, it starts to explain the valuation. That’s about double Rombauer.
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@Roy_Piper Rombauer is only 350K, still a huge number but certainly far from 500k.
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I tried to look up the case production for Daou, and have found numbers that vary widely, some high enough that the purchase price (and some other quoted metrics) would make more sense.
-Al
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Isn’t it strange what takes off and what doesn’t? In the case of The Prisoner I totally see it - it was a fresh label, fresh blended take etc. I get it. Meiomi? Label is generic, but it was the right grape at the right time with Sideways aftermath. Duckhorn I can totally see - nobody had done the nostalgic hunter/species/drawings-of-animals then (and look how many followed).
Bottom line is you never know. Look at La Croix sparkling water. To me that’s the most atrocious, busy, no-point-of-view mess of a graphic design ever and to me it would have zero chance of success in the market if you came to me and I had some money to invest (I’ma winemaker, so I obviously don’t). Yet here we are with it being the biggest domestic sparkling water on the US market, beating rivals that are ten times better marketed and designed.
Speaking of water, when Coca-Cola bought Topo-Chico for (I think) $220 million, they really got the bargain of a century. That brand is so strong in history and design, it’s an absolute steal - easily worth a billion bucks just that design. I can see Coca-Cola is making the most of it by positioning it as a luxury sparkler. They will succeed, too - the brand is impassable in profile.
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One million+ cases is crazy. I didn’t know production was so high, or that they have so much vineyard land. Is Paso becoming a more popular destination with Napa now being such an expensive place to visit?
there’s a lot of grapes east of 46. and daou doesn’t in and of itself represent paso. their marketing may say otherwise.
No one in the industry understands it either… a lot of family members work at the winery, but the brothers are still going to run the winery.
(We shall see for how long tho) The deal looks like it includes everything other than a plot of property in Italy…
Sounds like they want to have a Villa in Italia.
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Sure, I realize the image of the region might not fit with such a large producer. I’m just trying to get a sense of where values might be going, in terms of vineyard land and wineries. Can you explain “east of 46”?
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I think he meant along 46 East, really east of 101.
-Al
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At one of the Daou presentations someone told me Daou was really trying to get other Paso producers to produce “higher quality” wines to elevate the region’s status.
It had me thinking they were trying to be “new Napa” but it could’ve also been used as a marketing tool to sell the winery.
When I met him like a decade ago, Daniel was saying that then.
Too bad you can’t work with CalTrans to get a big sign installed on 154 just before the turnoff to Los Olivos. “Welcome to the World Famous Santa Ynez Valley” with a big picture of Larry Schaffer next to it. 
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Paso’s relative price tag of tasting room fees, hotels, restaurants and bottle price is a real thing when factoring appeal. A 3 day trip to some fantastic wineries would be half the cost compared to Napa. Big potential for growth in Paso.
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I think Paso has evolved since the last time I was there, but it used to be a lot more approachable. It’s also much closer to Southern California (as is SBC).
-Al
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We much prefer the wines in/around Santa Barbara but visit Paso (and, as a result, purchase wines) much more often because it is so difficult/expensive to stay in Santa Barbara. In Paso we prefer to stay in an Airbnb to make a weekend of it with friends. This option doesn’t exist in Santa Barbara. If staying in a hotel, while Paso isn’t cheap it is still 40% cheaper than Santa Barbara (we find entry level rooms in Paso are typically about $350/night vs $500-$600 in Santa Barbara. This is obviously unfortunate for the wine producers in the area. I’m sure that we would have much more established relationships with wineries in the area if it were easier to visit and we can’t be the only ones with this outcome.
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You clearly stay in nicer places when wine touring than I do.
When I’ve visited the SBC wine regions, generally stayed in Buellton or Lompoc, unless enough events in Sata Barbara. But, would stay in cheaper places even then.
-Al
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