Napa Valley is California’s wine barometer, an expensive one

Is Napa Valley quantitatively important to California wine? Absolutely not. The volume of wine it produces is just four per cent of the total. But in terms of image and prestige, it is vital. In fact, since 85 per cent of US wine is grown in California, Napa Valley is emblematic of all American wine.

I spent a week there earlier this month, at perhaps the most beautiful time of the year. After a rainy start to the year, the hillsides were, unusually, brilliant green. Bright orange poppies, California’s protected state flower, dotted the verges. Blossom was everywhere, and the ubiquitous cover crops between the vines were also in full bloom, knee-high and above, ready to be mown down by the sheep that many growers hire or raise themselves.

It’s hardly surprising that Napa Valley, an hour north of San Francisco, is a magnet for tourists. Napa wine producers have responded by turning tourism into a serious profit centre. No longer can you wander into a tasting room and see whether you like the wines. Slots are booked and paid for in advance, and you have to choose your “experience”.

According to the 2023 Direct to Consumer Wine Survey by the Silicon Valley Bank, the average cost of a “reserve tasting” in Napa Valley was $128. Even a tasting of a winery’s basic range costs $81 on average and, if visitors want a tour too, they could end up paying far more.

For the wineries, being able to sell direct to a consumer who has just tasted their wine is bliss, especially in a country where the alcohol distribution system is still strangled by post-Prohibition regulations. In 2022, the average spend in a Napa Valley tasting room was almost $500, again according to the SVB report. It’s no wonder that, in the 2024 version of SVB’s annual scorecard, Rob McMillan’s State of the US Wine Industry Report, by far the most important sales channel for premium wineries was the tasting room, accounting for 31 per cent of the total revenue.

“Wine clubs”, which are basically subscription programmes whereby members commit to buying a certain quantity of wines, comprised the second most important source of revenue with 25 per cent. Traditional sales via distributors and other wholesalers were just 17 per cent. (Exports represented a mere two per cent.)

These profitable direct-to-consumer channels are presumably one lure for the many French wine producers who are investing in Napa Valley. They are even allowed to sell their French wines direct to American consumers.

The Rouzaud family of Champagne Roederer recently added Diamond Creek winery and its hallowed Napa vineyards to their portfolio, alongside Merry Edwards in Sonoma and their early investment in Roederer Estate in Anderson Valley. The Cathiards of Ch Smith Haut Lafitte in Bordeaux have established Cathiard Vineyard in the lauded Rutherford foothills of the Mayacamas range on the west side of the valley. They followed the Pinault family of Ch Latour et al, who, in 2013, bought what is now called The Eisele Vineyard from the Araujos, and were so confident of their savoir-faire that they didn’t even impose a non-compete clause on the previous owners.

Domaine Chandon, Opus One and Dominus are long-standing Napa wineries with French owners or co-owners, respectively Moët-Hennessy, Baron Philippe de Rothschild and Christian Moueix. Carneros, at the cooler southern end, saw a rash of French investment at the end of the last century, with Taittinger and GH Mumm from Champagne and HdV, which is a joint project between Carneros grower Larry Hyde and Aubert de Villaine of Domaine de la Romanée-Conti.

The ebullient Jean-Charles Boisset of Burgundy arrived at Raymond in 2009, Chanel Inc bought St Supéry in 2015 and the next year the Tesserons of Ch Pontet Canet in Bordeaux bought Robin Williams’ winery Pym Rae.

Families are one thing but the locals are not thrilled by the arrival of large corporations. In 2022, the family winery Joseph Phelps was swallowed up by the luxury group LVMH, which had already acquired a substantial stake in Colgin on prized Pritchard Hill from Ann Colgin and Joe Wender. AXA Millésimes, the insurance company’s wine division, is far lower-key than Bernard Arnault’s vast LVMH empire, but has its own investment in Outpost on Howell Mountain, east of the valley.

Two massive conglomerates with substantial interests in Napa Valley are Constellation Brands, based in New York State, and Australia’s wine giant Treasury Wine Estates. Constellation’s flagship Robert Mondavi Winery, once the jewel in Napa’s crown and global pioneer of smart wine tourism, is currently a messy building site while being redesigned. Very un-Napa. Ditto Treasury’s field full of storage tanks opposite its Beringer winery, which is so capacious that it is difficult to believe all those tanks hold nothing but Napa Valley wine. These two companies are accused by more fastidious growers of planting vineyards designed for machines rather than skilled humans. Labour can cost $25,000 an acre a year at a top-notch vineyard.

One major new player in the valley is an individual, and a newcomer to wine production. Over the past few years, Tennessee agro-billionaire Gaylon Lawrence Jr has bought up a slew of famous wineries, including Heitz Cellar, Stony Hill and Burgess in Napa Valley (as well as second growth Ch Lascombes in Bordeaux).

It’s too early for any consensus on the wines produced by the new empire — and I was assured that rumours that they will no longer be producing Stony Hill’s iconic Chardonnay and Riesling are false. But I heard approval by the Napa community for their apparent determination to operate each winery separately, and I can vouch for the stylish nature of the Ink Grade Pavilion, a tasting room constructed last year on the main Highway 29. It is presumably designed to sell the wines of the extensive Ink Grade Howell Mountain vineyard that came with the Heitz acquisition.

But how easy will it be to sell these wines? Both in San Francisco and in the valley itself I heard the cry, “Napa Valley wines are too expensive” alongside enthusiasm for imports, which many wine lovers feel offer better value and variety. Cabernet dominates Napa Valley but is a pretty  heterogeneous category and can be hundreds of dollars a bottle. The valley’s most expensive Cabernet blend, Harlan Estate, costs about twice as much as its counterpart from Bordeaux.

The 2024 SVB report is clear that imports are becoming an increasingly attractive alternative, in a shrinking US wine market. And a real worry for California grape growers in regions less exalted than Napa Valley, such as Lodi, is that the big brand owners in the US have started to substitute wine imported in bulk from cheaper sources than California, such as Chile, without necessarily changing the label other than adding a discreet country name.

Caveat emptor, however much you pay.

Tasting notes, scores and suggested drink dates on Purple Pages of JancisRobinson.com. International stockists on Wine-searcher.com

Follow @FTMag to find out about our latest stories first and subscribe to our podcast Life and Art wherever you listen