A recent article in The New York Times featured a brief history of the Napa Valley and one of its major vineyard owners Andy Beckstoffer. Mr. Beckstoffer is 80 years old and has been around Napa Valley since 1967. At that time he worked for Heublein, an East Coast-based liquor conglomerate. He helped them buy Inglenook and Beaulieu, two of the oldest and best wineries in Napa Valley. Mr. Beckstoffer says in the article that “We bought the two best wineries in the valley and screwed it up.” And that is an understatement! Under Heublein, the labels were mostly used to sell really awful jug wines and mostly mediocre wines that in no way resembled the great wines that these two labels used to represent. The Inglenook wines were especially bad and represented a real tragedy considering the great wines made there from the 30s after prohibition up until 1962. But out of this carnage Mr. Beckstoffer began to buy up some of the Napa Valley vineyards that Heublein sold. And over the years this led to his becoming a Napa Valley land baron owning a large amount of Napa Valley’s best vineyards. This is described in the article as follows:
Mr. Beckstoffer’s holdings here total only about 1,000 acres or roughly 2 percent of the valley’s planted area. But thanks to his near-stranglehold on prime vineyards like To Kalon and Dr. Crane, he can demand almost whatever price he wants for his product. Decades ago, he settled on a formula borrowed from Burgundy: For a ton of grapes, he would charge 100 times the price of a bottle made with them. In other words, if a bottle made from cabernet sauvignon grown at Dr. Crane retails for $150, the cost of buying the fruit equals $15,000 per ton. He also requires winemakers to put his name on their labels — in effect, making them do his marketing for him. The article goes on to say: For the privilege of squeezing Beckstoffer grapes, winemakers behind labels like Stag’s Leap, Schrader, and Realm pay up to $25,000 per ton — more than five times the Napa average. The price of Napa bottles has risen year after year to ever-more incomprehensible heights — $1,000 for cult brands such as Screaming Eagle and Colgin — creating a seemingly invincible aura of prestige. As Mr. Beckstoffer likes to say: “You put ‘Napa Valley’ on toothpaste, you can sell it as a luxury product.” And today Mr. Beckstoffer values his empire at $500 million. This sort of makes me wonder what he would be worth if he branched out into other Napa Valley “luxury products” like toothpaste?
But there is something lurking under the surface. One of the conclusions of the article is that Napa Valley is facing its worst outlook in generations – and that was before the coronavirus struck. Last year Mr. Beckstoffer, the largest private wine grower in California, set a sales record with the sale of $55 million of Napa Valley Cabernet Sauvignon grapes. Yet he is concerned about the sales of the high-end wines that use the very expensive grapes. According to the article a large part of the problem is that the millennials (the generation born between 1981 and 1996) are not interested in expensive high-end Napa Valley wine. And this, combined with too many grapes and too many new wineries in Napa, is having a negative impact on demand and pricing. There is also the mention of the recent publication of Silicon Valley Bank’s very influential annual report which concluded that “The issue of greatest concern for the wine business today is the lack of participation in the premium wine category by the large millennial generation.” (To read the entire New York Times article click here ).
For me, the article was a very interesting read. But there were no real surprises in terms of the outlook. However, I do think that there are other factors involved that are not in the article and I encourage you to read my article from 2014 called Where Has Napa Valley Gone?  And I would also recommend that you read James Conaway’s book NAPA AT LAST LIGHT, America’s Eden In An Age Of Calamity. It was published in 2018 and speaks to what has recently happened to Napa Valley and why this might also be part of the problem as described in this New York Times article.
The following is a brief synopsis and presents my Underground view of Napa Valley as to where it was, where it is now, how it got there, and the future outlook:
My friends and I became interested in wine in the early 1970s. When I met my long time friend Edward Lazarus, he introduced me and others to old wines. We regularly drank old Bordeaux from the 1870 vintage. It was truly the vintage of that century and, in fact, maybe the best Bordeaux vintage ever. We also drank the great old Bordeaux wines from the 20s, 30s,40s, and 50s right up to 1961. We also drank old Burgundies back to really old vintages like 1919 and many Burgundies from the legendary vintages of 1945, 1947, and 1949. We also discovered old California wines. Most notably the old Inglenook Cabernet Sauvignons back to 1934, BV Private Reserve Cabernet Sauvignons back to 1954, and the precious few other old California Cabernet Sauvignons such as La Questa from Woodside back into the 30s, Hallcrest from Felton back into the 40s and Gemello’s from Mountain View back into the 1960s. These latter wines were made in very small quantities. The old California wines are simply remarkable. And, we not only drank these old wines but we also cellared them and have been drinking them for the last 50 years. And, as a group, the old wines mentioned here are unquestionably some of the greatest red wines ever made. Fortunately, I still have a few in my cellar that I drink from time to time and I have yet to be disappointed. And, in the 1960s and 1970s new wineries such as Diamond Creek and Stag’s Leap as well as many others were established and making traditional Cabernet Sauvignons that were also balanced with alcohol levels in the 12-13% range. And in 1976, the now-famous Steven Spurrier tasting came along which matched California wines with French wines. In a tasting that became known as “The Judgment of Paris” California wines excelled. All of a sudden, the world knew what we already knew and that was that some California wines were indeed world-class including some Napa Valley Cabernet Sauvignons.
And in the late 1970s, about the time we launched The Underground Wineletter, Robert Parker with The Wine Advocate and the 100 point scoring system came along. The concept of scoring many wines as perfect on release was something that made no sense to any of us. The greatest wines that I have ever tasted are nearly all wines that evolved and developed after considerable time in bottle. These would include the old Inglenook Cabernet Sauvignons from the 30s into the early 60s as well as wines from old Bordeaux vintages like 1870, 1928, 1929, 1945, 1947, 1959, and 1961. And, I certainly have had my share and more of great wines. Nonetheless, the perfect wine is still elusive. And when the proclamation was made that 1982 Bordeaux was “the vintage of the century” none of us who had been drinking old Bordeaux for many years felt that this was even close to being true. But, because of the lack of great Bordeaux vintages in mid-60s through the 70s, the 1982 vintage was an improvement and suddenly became “the vintage of the century’ for American consumers who did not have first-hand experience and did not know better. However, we knew that the proclamation was just hype as were perfect 100 point scores for so many young Bordeaux, Cabernet Sauvignons, and other wines.
Nonetheless, as time went on, novice US consumers really gravitated to any wines that got the perfect 100 scores. So guess what? The number of 100 point perfect wines began to appear on a regular basis. And, led by the new 100 point mania that ensued from novice US wine drinkers, things began to change. At first it was gradual. But over time it turned into a tsunami. The 100 point criteria were bigger is better. And, in Napa Valley the style of the Cabernet Sauvignons became riper, thicker, and more alcoholic with accompanying flavor profiles that did not fit with the historic concept of “varietal character.” The old Napa Cabernets like Inglenook and BV from the 1930s into the 1960s were balanced with very pure fruit, good intensity, and alcohol in a 12% range. In the 1960s and 1970s the newer wines that came along like Diamond Creek, Stag’s Leap, Mondavi, and many others were also balanced with alcohol levels in the 12-13% range. We felt that the best of these wines were certainly at the level of really good Bordeaux. But by the time we were in the 1980s, the number of new style high alcohol, extracted, very ripe style Napa Valley Cabernet Sauvignons were getting 100 points and other more traditional Cabernets languished. This rise in popularity of the big style Napa Valley Cabernets also resulted in higher and higher prices for the 100 point wines. This, in turn, attracted new people with lots of money to Napa Valley to buy vineyards, open wineries, and make the expensive new style Cabs. So the trend with more people, more money, and more big styled 100 point Cabernets was firmly established. But my friends and I never liked these new-style wines. And, over time, they got even more extracted, heavy and dense. They were instant gratification wines for the American wine drinkers who were from the “Bigger is better” school.
However, beneath the surface the naysayers included me, The Underground, my friends and others who were accustomed to the older balanced style. These older styled wines were not only balanced but aged beautifully rounding out and gaining complexity over a long period of time. Nonetheless, new “collectors” also gravitated to the 100 point style. And, soon this attracted “investors” who began building cellars based on points. I did not think then, and do not think now, that the big style wines would age gracefully. Balance is the key to longevity, and these new-style wines were never balanced. So time will tell how the big style cult wines age over time. Some people buy them to drink right away. No problem. An Underground motto is “Drink what you like and like what you drink.” As for the “investors” buying the wines for their future value, good luck!
So by the 1990s the wine-drinking community was divided into two styles for Napa Valley Cabernet Sauvignon – the old style and the new style. And over time some of the wines made in the old style from designated vineyards became the new style from the same vineyards. And the wines did not taste the same. When very ripe and more alcoholic, the flavor profile of wine changes. And over time, it can become difficult to tell the identity of wine by tasting. I remember the first time I tasted one of the new style wines which was poured for me by a long time grower and producer of lovely Napa Valley Cabernet. He asked me what I thought of it. My first question was, is it 100% Cabernet Sauvignon? He said “yes.” I then asked where did the blueberry fruit flavor come from? He said he did not know and went on to say that the grapes for the wine came from a vineyard next to his and the taste was completely different. This was something that he did not understand.
And as the cult Cabernets proliferated I went to a Cabernet tasting presented by a winemaker from one of the new cult Cabernet producers. He presented several wines blind. I tasted them but found them all in the same style that I do not like. When the identities were revealed they were from different barrels of wine from the same vintage that were selected to be bottled separately. I asked why they were bottled separately and was told he did not know. When I pressed him he said he was only the winemaker and the owner decided what to bottle and that he wanted to keep each bottling small. Bingo! The light went on in my head – a smaller quantity higher price!!
Also, later I had a friend who was a vineyard manager in Napa Valley. He knew my general dislike for the new style wines but asked if I would do a blind tasting of Napa Cabernets if he set it up. I said yes, and he arranged it through the wine buyer at the Napa Valley Dean & Deluca store which carried an extensive range of Napa Valley wines. There were a dozen or so Napa Valley Cabernets that were presented to me in a blind tasting. I smelled and tasted each wine several times. And when I was finished the wine buyer came into the room and asked me which wines I preferred. My answer was none of them. When she asked why I said that I did not the style of any of the wines because they were heavy and overpowering without varietal character and a sense of place. That lack of sense of place meant that all the wines tasted pretty much the same. But when the identity of the wines was revealed, they mostly came from different areas within Napa Valley such as St. Helena, Stag’s Leap, Calistoga, Howell Mountain, etc. So the entire concept of different appellations within Napa Valley that the Underground long advocated and was eventually put into place thanks to many Napa Valley vintners such as Warren Winiarski of Stag’s Leap, was gone with the proliferation of large-scaled cult wines where the differences in wines from different areas were melded together. That has lead to a lot of unanswered questions. As for me, you can find the questions I have raised in Underground articles that I have published such as Caution! What’s In Your Wine? which has links to other articles on ingredients in wine.
So with all this history how can anyone blame the millennials? Not me! In fact, I would like to congratulate the millennials! Why? It’s very simple. They are following another Underground mantra – “Buy what you like and like what you drink.” And for me personally I have never bought a bottle of 100 point Napa Valley cult Cabernet. I have only tasted them at tastings or when someone else poured them. Then I would, smell, and taste. I never drank much of any of them. In fact, for my taste, the majority of the 100 point cult wines that I have tasted are simply undrinkable. So why would I buy something I do not like much less pay an extravagant price for it? There are a lot of great wines available for a fraction of the price of the Napa Valley cult Cabernet Sauvignons. And, as for the “investment” aspect of most of the Napa Valley cult Cabernet Sauvignons, I have many other places where I can invest my money with a future value that looks much better to me.
In Vino Veritas,