It's the end of an era. Stags Leap, the winery that grew to fame during the 1976 Paris Tasting (see my posting re. competing movies about this event here), has been sold. This sale brings to three the number of Napa wineries sold this week. And it's only Wednesday. The other two were William Hill and Duckhorn.
These sales mark an interesting shift in the U.S. wine industry, where profitable producers of premium wines are being sold at a, well, premium.
So, What Is A "Premium Wine"?
First, let me explain that I find our industry rather short sighted. We allow the likes of A.C. Nielsen to define a "Premium Wine" as any wine above $15/bottle, legitimately (from their perspective) defined because such wines account for no more than 1/10th of a percent of the wine sold. But that is BY VOLUME, such wines also account for 45% of revenue, and boast an enviable annual growth rate of 10%.
A rosy picure? Sure. But one that would bloom into full unabashed optimism if Nielsen could accurately count every sale, including those made through boutique wine merchants like us, winery tasting rooms and wine clubs, and through restaurants. Such places rarely provide sales data to A.C. Nielsen, who relies on statistics from check-out scanners and large product distribution facilities.
So, if Nielsen UNDER-estimates the flow of these premium wines, you can see why these producers are currently more attractive as acquisition targets than a 49 year-old is to AARP (more on this later).
Will the new corporate owners produce the same high-quality wines these labels came to be known for? Some corporations succeed at this, but most don't. I hope we are witnessing a new generation of enlightened coroporations. But in my experience, corporate accountants like to descend on winery production facilities like fruit flies at harvest. It's just that fruit flies don't bring all sorts of brilliant cost-cutting ideas with them. No disrespect meant to bean counters, the darling little buggers.
But while we wait to see what sort of quality these wineries produce in the future, you may find it's a good time to buy up existing vintages. As well as to discover some new boutique producers, such as these:
Barrack, 2004 "Brand", Bordeaux Blend $42 - a best-seller at Tastes of the Valleys wine bar, where you taste before you buy!
Labyrinth 2004 Pinot Noir, Bien Nacido Vineyard $27 - Still below the radar. I am most enthusiastic about this producer, Ariki Hill.
Costa De Oro - 2005 Sauvignon Blanc was $17, now just $14.50
Toucan Wines, 2005 Zinfandel, Arroyo Grande Valley $31 - This wine has earned three gold medals since we first discovered it, back in January. Also a top seller at Tastes of the Valleys
And many more! See all our boutique producers here! And happy summer sipping.
Cheers,
Dave Chambers, Wine Merchant
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