Napa Cabernet prices at worryingly high levels
The price of Cabernet grapes in Napa is at an all-time high, with experts warning that some appellations in the region are “in jeopardy of becoming mono-varietal”.
As reported by Wines & Vines, prices and demand for Cabernet grapes shrunk during the 2008 recession but have been on the rise since 2010 with Napa fruit now selling for up to $7,000 a tonne.
“Any land in the Napa Valley that can be planted to Cabernet and produce a good crop of Cabernet is being planted today, and they can make a call and sell the fruit for $7,000,” Tony Correia, president of consultancy firm The Correia Co., said during the Vineyard Economics Seminar held in Napa last month.
Correia warned during the conference that if too much Cabernet is planted in areas not well suited to the grape, it could damage the image of Napa Valley Cabernet, which at the moment appears bulletproof.
In response to growing demand and the high prices Cabernet can command, grape growers in Napa are uprooting other varieties like Sauvignon Blanc in order to plant more Cabernet.
It’s a similar story for Pinot Noir in Sonoma, which, according to Correia, now sells for “silly” prices, with the average price of an acre approaching $200,000. “The demand is very strong, and there’s a limited supply of high-quality Pinot Noir vineyards,” he said.
During the conference, Nat DiBuduo, president of the Allied Grape Growers spoke of a bubble and voiced concerns about the sustainability of the Napa Cabernet grape market at the top end.
“I haven’t seen prices like this. There’s got to be a point here where we have to have balance for both the winery and the grower,” he said.
According to Wines & Vines, Gallo’s recent acquisition of the 600-acre Stagecoach Vineyard – the largest contiguous vineyard in the Napa Valley whose fruit is used by over 90 wineries including Alpha Omega, Caymus and Duckhorn – could potentially take 2,000 tonnes of high quality Cabernet off the market.
California added 15,000 acres of vines in 2017, the majority of which were in coastal areas and in Lodi. Wine consumption in America is set to outpace vineyard development in the long-term.
Reassuringly for producers and consumers, the majority of grapes being grown in California are for the production of wine priced at $10 and above.