Napa Winegrowers Aim 'Ahead of the Curve'

Vineyard owners urged to partner with winery clients

by Paul Franson
nick goldschmidt
Nick Goldschmidt speaks about the global market and its impact on Napa Valley growers.
Napa Valley, Calif.—Napa Valley’s wine industry has for decades set the pace for New World winegrowing regions, but the well-organized grapegrowers and winemakers there never rest on their laurels. Each year, the Napa Valley Grapegrowers holds its “Ahead of the Curve” seminar to address the issues growers will soon face—or are already experiencing.

This year, the seminar focused on a trend that’s becoming more important for high-end growers, as the worldwide wine market increasingly places high value on smaller and smaller geographic areas. The role of the grapegrower in promoting wines made from his property becomes ever more paramount.

More and more wineries identify specific vineyards—independently owned and managed, or part of their own portfolios—on labels for their better wines. This is a big benefit to growers, and likely helps raise price and demand for grapes from those special vineyards.

The practice can also benefit less-known wineries that leverage a well-known vineyard name like Bien Nacido, Hudson or To-Kalon.

Wineries may be of mixed minds about promoting vineyards, however. While vineyard designation can add distinction to the label, particularly if it’s from a respected vineyard, names from well-known independent growers may appear on other bottles as well. In effect, the winery is promoting the vineyard.

Cultivate loyalty
The partnership between grower and winery brings another benefit: loyalty. Dave Yewell, chair of the grapegrowers’ program group who moderated the conference, said, “We know growers have lost contracts and seen volumes and prices drop in recent times. We want you to make the cut, to be the first grower a winery thinks of.”

The first speaker was Randy Snowden, who’s grown grapes for 20 years with his brother Scott. He spoke of “Napa baiting,” which results from the valley’s prestige—and high grape and wine prices. He emphasized all the things that are good about the valley, while encouraging his sold-out audience to address quality concerns and continue to excel.

Nick Goldschmidt spoke about the global market and its impact on Napa Valley growers. Goldschmidt, a native of New Zealand educated in Australia, has made wine in the United States since 1990, first with Simi, then Allied Domecq and Jim Beam (Fortune Brands) and now for himself and as a consultant in six (soon to be seven) countries. He owns vineyards in four countries and consults with 15 wineries.

Goldschmidt noted that in the past, the difficulty and expense of transport meant we drank mostly domestic wines. Now, lower costs for travel and shipping have expanded our horizons.

And lest we forget how much things have changed, and how quickly, he noted that he worked at a winery in Chile in 1988 that had no paved roads, electric utility or piped-in water. “I had the first car in the town,” he recalled. Now Chile is very modern. When traveling to vineyards in the ‘90s, Goldschmidt found the U.S. industry preoccupied with clones, field selections and viruses, while improved politics brought fast development in Chile.

Strengths of Different Winegrowing Countries
  Advantage Disadvantage
Labor South America, USA NZ, Australia, Spain
Water NZ, Chile USA, Argentina, Spain, Australia
Technology USA, Australia NA, Chile, Argentina, Spain
and Market Interest
USA, Europe NZ, Australia, Chile, Argentina
Grape Pricing Argentina,
Chile, Australia
USA, NZ, Spain
Source: Nick Goldschmidt

In the 2000s, traditional vineyards and winemaking rule in Spain, while arid conditions and high salt are realities in Mexico. Here in the U.S., we’re  seeing pests and disease as never before, including skeletonizers, sharpshooters and mites. “People are talking about organic, Biodynamic and sustainable–perhaps too much,” Goldschmidt suggested.

What’s next for Napa after 2010, the third largest harvest in California? “Volumes are in balance but at $20 per bottle, which results in less consumption of imports. There’s an excess of grapes, but a shortage of bulk wine,” Goldschmidt said.

No one seems sure about the impact of climate changes in Napa, but he predicted that it will be short of water, whether it’s warm or cool.
Fortunately for Napa, “God just isn’t making any more land,” which will allow the valley to stay on top—if it plays its cards right.

“Napa growers must engage our buyers and support our customers,” he said, emphasizing the importance of blogs, Twitter and Facebook vs. websites.

In the future, Goldschmidt believes growers will become highly mechanized due to issues with water, salt, labor and technology. “The labor force will become more westernized (Americanized) and less available. This will lead to more mechanization. We’ll need to evolve to accommodate more use of technology. Land and grapes will be over-priced for the market, so vineyards will be smaller and vertically integrated.”

He also predicted that megastores will decimate the current domination of the three-tier system: There will be fewer distributors with clout. “New small ones will open,” he said.

Goldschmidt said that wineries and growers with history, culture and good stories will survive, but warned, “Be inclusive in appellations, and promote the whole Napa Valley. Limit promotion of AVAs. Napa overall is more powerful and important.”

Help out winery clients
A reseller panel advised growers to participate in promoting their customers’ wines, too. “Consumers are anxious to know everything about produce and meat served in restaurants. Why not wine, too?” asked Jimmy Hayes, VP of sales and marketing for Araujo Estate Wines and a former sommelier.

Chris Blanchard, managing partner of distributor Kimberly Jones Selections and also a former sommelier, said, “Grower Mike Wolf attended all the meetings we had with Vine Hill Ranch brand. Grower Lee Hudson wanted to call on accounts. In hard times, everyone has to be out there telling stories.” But he warned that the last things customers want to hear about is trellises, Brix and clones. “They want to hear how you lost your shoe in the mud last February, and how beautiful it is when the fog comes in.”

John Lancaster, sommelier at Boulevard Restaurant in San Francisco, noted, “There’s a lot of wine out there. The grower is another arrow in your quiver.”

The panel discussed the trend toward more “elegant” wines, but retailer Dan Dawson of Back Room Wines in Napa, another former sommelier, noted, “Bigger is better at Back Room Wines. A lot of people like big, bold, brawny wines. You can enjoy them now or hold them.”

Lancaster added, “They aren’t looking for subtle from Napa. If they want subtle, they’ll order Burgundy.” He added, however, that Pinot Noir had displaced Cabernet as Boulevard’s top wine this year. But Cabs average $106, while Pinot comes in at $86. “That sounds expensive, but we don’t get any resistance,” he said.

Before final speaker Dan Duckhorn summarized the recent history of Napa Valley wines, wine educator and marketing consultant Paul Wagner gave some hints to “Making the Cut.” Many suggestions dealt with maintaining visibility with potential customers, even if you don’t need them right now.

He emphasized developing and telling  a great story: “People care more about your dog than the kind of dirt in your vineyard.” Force yourself to sell, he told the assembled grapegrowers. He also recommended Facebook, calling it “vital” in this day and time.

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