As I pen this column, the 2016 Napa Valley Cabernet Sauvignon harvest is half completed, creating much more optimism than the previous harvest.
The 2015 California North Coast harvest was devastating as the fruit sets never developed and it was an extremely tiny crop. This caused a huge price hike in the spot market for Cabernet, with many producers unable to keep their programs going and large producers sacrificing margin for continuity.
In 2012, more than 71,000 tons of Napa Cabernet were crushed, which is fairly consistent with 65,919 tons in 2013 and 69,530 tons in 2014 (the bottom dropped out with 53,195 tons in 2015). Of that amount, only 30,944 tons were available for purchase and there simply was just not enough Cabernet to go around. Napa Cabernets are now beginning to hit the shelves at significantly higher prices, with value labels now hard to find.
In 2010, Cabernet growers were paid $4,456 per ton. Last year it increased to $6,285 per ton, with fewer grapes making it to the spot market.
So will the 2016 Napa Valley Cabernet harvest save the day with an average crop and make Cabernet more affordable?
Unfortunately, the answer is probably not, but it looks like pricing will stabilize. Had there been another tiny crop, pricing would have increased due to a lack of Napa Cab to fill the pipelines of winery label programs.
Reed Renaudin, Winemaker and President of Amicus wine holdings, follows the market carefully and says, “Napa Cab is now a play on scarcity. There’s no problem selling it in the $50-100 retail range, but if the economy sinks for the wealthy guy, Napa Valley could be in trouble.”
Renaudin notes that Napa wineries that don’t have adequate estate fruit are moving toward longer-term contracts to protect themselves.
After 2015’s surprisingly tiny harvest, the community learned a valuable lesson: that you have to lock in availability as pricing keeps going up. Halfway through this harvest, he loves the quality of the fruit, thinks the grapes are less dehydrated than previous vintages, and says the wines should be particularly complex. He’s confident that the vintage will be good and perhaps has the potential to be even better, comparing it to the 2008 vintage.
I also spoke with Kerry Damskey, known as the Indiana Jones of Winemaking, because in addition to his marquee Palmeri wines (known for his signature Dark and Brooding label) in Sonoma, he also makes wine in Israel, Costa Rica and India. I caught up with Kerry just as he was beginning to harvest from the famed Stagecoach Vineyard in Napa’s Valley’s Atlas Peak appellation.
He’s excited about the quality of the vintage and feels it would be an average or slightly below average crop.
“The price of Cabernet keeps going up and I’m not sure prices will drop anytime soon,” he says. He also echoes the sentiment that, “if there’s a downturn in the economy, how will you sell these Cabs at somewhat ridiculous prices? It’s becoming like luxury jewelry.”
Jonathan Newman is widely recognized as a leader in the wine industry. As chairman of the Pennsylvania Liquor Control Board, he was the nation’s largest wine buyer and brought a number of popular innovations to bear, including the Chairman’s Selection program and opening of local stores for Sunday sales. Jonathan has received significant industry accolades during his career. Follow him on Twitter at @NewmanWine and visit his website: newmanwine.com.