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How Long Before Napa Cabs Top $1000 A Bottle?

What does a record total for Premiere Napa Valley mean for the rest of the market?
© Fotolia/iStock/Wine-Searcher | What does a record total for Premiere Napa Valley mean for the rest of the market?
With 12 Napa wines selling for at least $1000 a bottle wholesale at Premiere Napa Valley, can the same price for regular releases be far behind?

Will top Napa wines soon cross the $1000 barrier? That's a question worth asking after the phenomenal prices paid for 2012 Napa wines last weekend at Premiere Napa Valley.

"The Premiere Napa Valley auction has always been a good indicator of the wine market," says Stonebridge CEO Barbara Insel, a wine market analyst.

More than 30 years ago, Al Brounstein made history when he charged $100 for the 1978 Diamond Creek Lake Cabernet Sauvignon. The $100 line was a powerful psychological barrier to cross.

Today, $1000 is a line that no Napa winery has yet traversed. Harlan Estate, near the top, currently costs $800 on release. Even Screaming Eagle does not currently release its wine for $1000 a bottle. Its mailing list customers were offered the 2011 wine for $850 a bottle, and direct-to-consumer manager Patrick Chapman adds: "We're not going to be going over $1000 anytime soon."

Napa wines at more than $1000 a bottle have also been rare in the secondary market. Screaming Eagle fetches those prices, but few other wines do.

But last weekend, a dozen different 60-bottle lots of Napa wines sold for more than $1000 a bottle, most of them to retailers and restaurateurs that plan to mark them up and sell them for more.

Pritchard Hill seems to be the hot spot, with three of the wines hailing from its volanic soils.

Winemakers Thomas Brown and Philippe Melka had two wines each crossing the $1000 line, and several that came close. A few of the wines had some special emotional selling point, such as a solera-style wine of 21 vintages from ZD Wines at $1667 a bottle. But some were relatively new on the scene and their high prices were more stunning for it.

Insel says that while the Premiere results are significant, it's important to understand that they show only the sentiment of the very high end of the wine market, and will have little to no trickle-down effect on most wines.

"The people who have money are spending again," Insel reports. "There's just fewer of them. The 1 percent (of wealthiest Americans) is happy to pay $1000 or $2000 to show off a trophy. It's either business entertainment or to show off to my friends, 'Look, I was able to afford this wine that you can't have.' And it's always the guys. The trophy buyers are always men."

Keeping track of prices at the 2014 Premiere Napa Valley auction
© Bob McClenahan/Napa Valley Vintners | Keeping track of prices at the 2014 Premiere Napa Valley auction

The fact that most of the wine on offer was from the warm 2012 vintage also played a role, as one can expect ratings from Robert Parker to be higher on what should be riper wines than 2011.

Large national retailer Total Wine & More walked away with 27 auction lots. None approached $1000 a bottle, although Total did put in the last losing bid for the highest-priced Scarecrow lot that ultimately sold for $4333 a bottle. Total was prepared to pay $4000 a bottle for it.

But Total did fork out $833 a bottle, wholesale, for 60 bottles of 2012 Tor Kenward Beckstoffer To Kalon, a blend of Cabernet Sauvignon and Cabernet Franc. Even with a below-average markup, that wine might end up selling for $1000 in the store. The 2011 Tor Kenward Cabernet from the same vineyard has an average bottle price under $150 on Wine-Searcher.

Total also paid $567 a bottle for 60 bottles of 2012 Cliff Lede Satisfaction Sultans Stags Leap District Cabernet Sauvignon.

"Some of these wines can be hand sells," said Cristina Pearce, Total Wine's senior manager of domestic wine buying. "But our staff is educated. They can explain to customers what they're worth."

Marc Sauter from Zoës Restaurant in Virginia Beach, who paid $1667 a bottle for 2012 Shafer Sunspot Vineyard Cabernet Sauvignon, said unequivocally, "We're still going to make money on this."

The headline-getting $4333 a bottle paid for 60 bottles of 2012 Scarecrow Toto's Opium Dream: Scene III Cabernet Sauvignon makes it probably the most expensive current-release wine ever sold  in the U.S. And while Glen Knight, domestic wine buyer for The Wine House in Los Angeles, acknowledge that some of it might end up in his father's cellar, he also said: "I'll sell it to my customers."

In fact, the wine is currently listed on Wine-Searcher with a pre-arrival price of $5400.

Insel said that an ongoing battle in Los Angeles to be the high-end wine purveyor to Hollywood's wealthiest drinkers might have motivated Knight, but added that the Knight family is "not usually that extravagant. They must know that they have people that will buy it. People are spending a lot of money for wine in Hollywood right now."

The Wine House in L.A. made the highest bid while Total Wine & More bought 27 lots
© The Wine House/Total Wine & More | The Wine House in L.A. made the highest bid while Total Wine & More bought 27 lots

While buyers from five foreign countries walked away with some auction lots, all of the big money was spent by Americans.

"The market for Napa Cab is a different market from Bordeaux," Insel says. "Bordeaux jumped the shark on some of its pricing. Now it's back to a normal astronomical level."

In Bordeaux, high prices in the secondary market had much to do with wineries pushing up their own release prices, as they assumed they could get more of the money that was being spent anyway. In Napa, where most of the big cult players didn't take part in last weekend's auction, one wonders if seeing the $1000 barrier passed so casually will encourage some vintners to up their own release prices.

Insel says: "I don't think Premiere would drive that. When you're producing 3000 or 4000 cases of wine, you know who your customers are. They're very close to their market. Bill Harlan is very smart about his pricing. He's not going to take it up because of one event. It will just kind of creep up."

Of course, from where Harlan and Screaming Eagle are sitting right now, there's not much more creeping up to go. Many $1000 bottles of Napa wine will be in stores as soon as the Premiere lots are released. Heck, there will even be a $4500 bottle (at least) of Napa wine in Los Angeles. Wines in France breached the $1000 barrier long ago, both in Bordeaux (several first growths; Petrus) and Burgundy (Domaine de la Romanée-Conti).

When Brounstein burst the $100 barrier in the 1980s, people gasped. How could any wine be worth $100? But soon his neighbors praised his boldness, and it became a part of his legacy. Now $100 Napa Cabernets are thick on the ground. America might not be ready for a boatload of $1000 Napa Cabs yet, but surely the cult wineries will be watching the resales of last week's top Premiere wines with interest.

The $1000+ bottles
2012 Brand Double Horseshoes Napa Valley Cabernet Sauvignon, from Pritchard Hill from winemaker Philippe Melka, $1167 a bottle
2012 Fairchild Stones No. 1 St. Helena Cabernet Sauvignon, from winemaker Philippe Melka, $1000 a bottle
2012 Joseph Phelps Backus Vineyard Oakville Cabernet Sauvignon, the final vintage from a block of vines planted in 1975 that are scheduled to be replanted, $1250 a bottle
2012 Odette Estate Stags Leap District Cabernet Sauvignon, the first vintage of the top-end wine to be released from the latest PlumpJack Group venture, $1000 a bottle
2012 Ovid Napa Valley Cabernet Sauvignon, from Pritchard Hill, $1000 a bottle
2012 Pulido-Walker The Possible Napa Valley Cabernet Sauvignon, from Pritchard Hill and made by Thomas Brown, $1083 a bottle
2012 Scarecrow Toto's Opium Dream: Scene III Rutherford Cabernet Sauvignon, the big star at $4333 per bottle
2012 Schrader Double Diamond Cabernet Sauvignon, made by Thomas Brown, $1667 a bottle
2012 Shafer Sunspot Vineyard Cabernet Sauvignon, from a block in the middle of the Hillside Select vineyard, $1667 a bottle
2012 Vine Hill Ranch Assessment Oakville Cabernet Sauvignon, $1333 a bottle
2013 Vineyard 29 St. Helena Special Cabernet Sauvignon, one of the very few '13s on offer, $1333 a bottle
NV ZD Wines Petit Abacus, the outlier of the group because it's a solera-system wine including 21 different vintages of ZD Reserve Cabernet Sauvignon, $1667 a bottle

Related story:

Scarecrow Comes Alive at Napa Auction

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  • Comments

    Italian Wine-O wrote:
    02-Mar-2014 at 19:01:52 (GMT)

    As a native Californian I am disgusted by the Napa cult wine prices. They go up every year regardless of vintage and over all quality. At least our European counter parts recognize vintage as a reflection in price point. Most are of a cookie cutter type with little reflection of terroir. High alcohol and chewy concentrated fruit which we can all thank Parker for.

  • Bill Haydon wrote:
    01-Mar-2014 at 20:03:54 (GMT)

    Wineries using shill bidding combined with a narrow sliver of wine shops seeing the publicity value in buying these lots at hyper-inflated prices is not reflective of the overall market trending. High end Napa Valley Cabernet has never been a harder sell in the market. It's virtually dead in the water in the NYC, Chicago, DC and Boston markets and the multi-year downward demand curve in those markets is now beginning to broaden out to secondary markets such as Ohio and Colorado. Joke making the industry rounds: "Having a portfolio full of Napa Valley cult wine is like having a closet full of leisure suits."

  • Insider wrote:
    28-Feb-2014 at 16:13:45 (GMT)

    These pricesdo not indicate quality or demand. Many auctions have shills, reimbursed directly by the winery, to drive up the price, thus creating hype. Articles such as this only encourage this bad behavior.

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