Stateways

StateWays - November/December 2016

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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StateWays | www.stateways.com | November/December 2016 8 BUSINESS w i n e 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 sur- prisingly 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 confi dent 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 Winemak- ing, 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 Stage- coach 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 sen- timent that, "if there's a downturn in the economy, how will you sell these Cabs at somewhat ridiculous prices? It's be- coming like luxury jewelry." • JONATHAN NEWMAN is widely rec- ognized as a leader in the wine indus- try. As chairman of the Pennsylvania Liquor Control Board, he was the na- tion's largest wine buyer and brought a number of popular innovations to bear, including the Chairman's Selec- tion program and opening of local stores for Sunday sales. Jonathan has received significant industry acco- lades during his career. Follow him on Twitter at @NewmanWine and visit his website: www.newmanwine.com. A s I pen this column, the 2016 Napa Valley Cabernet Sauvignon harvest is half com- pleted, 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 ex- tremely 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 sacrifi cing 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 Cab- ernets are now beginning to hit the shelves at signifi cantly higher prices, with value labels now hard to fi nd. 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, pric- ing would have increased due to a lack of Napa Cab to fi ll 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 High Expectations for the 2016 Napa Valley Cabernet Harvest BY JONATHAN H. NEWMAN

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