In focus: California Cabernet

Page 1 of 2

From Screaming Eagle to Ridge Monte Bello, global demand for the top drops from the Golden State is at an all-time high, but can their rising prices be sustained, asks Lucy Shaw.

Bill Harlan has created a California first growth in cult Napa Cabernet Harlan. Photo credit: Olaf Beckman

When property developer Bill Harlan founded Harlan Estate in 1984 in the western hills of Oakville, clearing 16 hectares of forest on his prized plot of land to plant vines, he had an audacious ambition – to create a California first growth. Many may have laughed in his face at the time, but 35 years on, his wine now sells for US$900 (£695) a bottle on release, and significantly more on the secondary market.

“It felt cheeky saying we wanted to create a California first growth back then, but people have been saying it back to us, so on some level it must have worked,” says estate director Don Weaver. “We’re not trying to be the Latour of the Golden State, but we do make very serious wine. The inspiration came more from wanting to mirror the first growth’s model of success and longevity.”

Having proved themselves over time, California’s equivalent of the five first growths are blossoming at the top of the fine wine tree, and stand apart in terms of their investment value. So much so that last year fine wine trading platform Liv-ex created the California 50 Index to follow the price performance of the past 10 physical vintages of Harlan, Screaming Eagle, Dominus, Opus One and Ridge Monte Bello – the Golden State’s most traded wines on the secondary market.

In the past year alone, the prices of the last five vintages of these wines have risen by an average of 25%, and over the past five years the California 50 Index has outperformed industry benchmark the Liv-ex 100 and the Liv-ex 1,000, rising by a staggering 76%, with Screaming Eagle alone posting gains of 89%. Justin Gibbs, director and co-founder of Liv-ex, puts this stellar performance down to a number of factors. “Bordeaux sales have been running flat for two years, and many collectors have cellars full of claret but very little from California.

With small production, high scores and the ‘shock of the new’ factor, prices of California’s big five have been pushed up with each release,” he says. Scarcity is key Scarcity is a key driver in pushing the price of these five wines to unprecedented levels – their volumes being more akin to top Burgundy than prized claret.

“A Bordeaux first growth produces around 20,000 cases a year, while Harlan makes 2,000 and Screaming Eagle only produced four barrels in 2017, so there is a massive level of rarity, which, when combined with their quality, results in high prices that are only going to go up,” says California specialist James Hocking, who imports the likes of Corra and Scarecrow into the UK through his eponymous agency, James Hocking Wine, and has found a niche among wealthy London-based Americans in their 30s and 40s who are thirsty for a taste of home.

While the big five continue to enjoy the lion’s share of secondary market sales, the audience for these wines has broadened, and the number of California wines trading on Liv-ex has doubled in the past two years, with both the UK and Asia becoming increasingly interested in what the Golden State has to offer at the top end.

However, the ongoing trade war between the US and China is stalling sales in Asia. While the US will always remain the number one market for these wines, the majority of which are sold direct to consumers via coveted mailing lists, many of California’s top producers are keen to increase their global presence, and are making their wines available in the UK for the first time, though the allocations are often miniscule.

Cult California Cabernet Ovid from Pritchard Hill will soon make its UK debut through The Wine Treasury, but don’t get too excited – account manager Christian Manthei told db during the recent Collectible California tasting at the American Embassy in London that the UK will be allotted between 18 and 24 bottles per year. The UK’s allocation of Harlan is slightly higher, ranging from 20 to 200 bottles, depending on availability, many of which are ‘flipped’ on the secondary market soon after being snapped up – a trend Weaver admits he has no control over.

“If you’re blatantly buying the wine to sell on then you’re not my favourite customer, but what people do with the wine once they buy it is their own business,” he says. One venue keen to make the most of its Harlan allocation is celebrity chef Jason Atherton’s new Mayfair restaurant, The Betterment, where a 125ml glass of Harlan 2012 will set you back £495.

Keen to expand his international reach, last summer movie mogul Francis Ford Coppola started distributing the Rutherford jewel in his California crown, Inglenook, through La Place de Bordeaux via three négociants – CVBG, Duclot and Maison Joanne. Jackson Family Wines does the same with Vérité, its revered range of three Bordeaux blends from Sonoma County. “We want the wines to compete on the same stage as top Bordeaux, and being available through La Place has helped us to expand our reach to France and other parts of the world,” says Christopher Jackson. “Selling through La Place is a major point of pride for us.”

The likes of Jackson and Inglenook aren’t the only ones benefiting from this new route to market. “As the world shifts away from en primeur, Bordeaux négociants need to change their business model accordingly, and working with California’s top producers is a great way to do that,” believes Dave Allen of California wine importer, The Vineyard Cellars. While the Jacksons like to benchmark Vérité against the likes of Margaux and Petrus, wine writer Francis Percival believes California’s top Bordeaux blends “exist in their own lane, and have no direct competition, except perhaps the Super Tuscans, as they’re both warm climate wines loved by Baby Boomers”. The jury is out as to whether the likes of Screaming Eagle and Dominus are made with the American palate in mind. “Definitely not,” insists Alistair Viner of Mayfair fine wine Mecca, Hedonism.

“These wines appeal to such a wide and varied group. We have over 1,400 California wines in stock and they account for a considerable percentage of our overall business,” he says. Oliver Bartle of Roberson thinks that while a number of the big five were initially crafted to appeal to sweet-toothed Americans, with their ripe fruit, high alcohol levels and lashings of new oak, he has noticed a stylistic shift in recent years. “They have become more food friendly and European in style, and display structure and balance,” he says. California-focused wine writer Stephen Brook has noticed “more polish, better handled oak and more refined tannins” in top California Cabernet of late. For Don Weaver, the abundance of sunshine in California is intrinsic to the character of Harlan, leading to “dense and profound wines with luscious texture”.

Article continues on the next page…

  • 1
  • 2

Business, Entrepreneur, Estate, Family, Next Generation, Startup, Succession, Wealth