Yet another important, historic Napa Valley winery changed hands from its founding family to a large corporation this week.
Joseph Phelps Vineyards, whose Insignia blend is largely responsible for the success of proprietary Bordeaux-style blends in California, announced on Wednesday that it had been acquired by Moet Hennessy Louis Vuitton, which also controls Napa’s Newton Vineyards, Colgin Cellars and Domaine Chandon. Here’s my full story on the sale.
It’s the latest in a recent string of Napa estate grabs: The Disney family sold Silverado Vineyards to the fast-expanding empire of mogul Bill Foley; a South Korean retail chain bought Shafer Vineyards; Treasury Wine Estates purchased Frank Family Vineyards.
This moment isn’t an anomaly; California wineries are always selling to new owners. Still, every once in a while it’s worth pausing to consider the cumulative effect of these ownership changes. In Napa Valley, the impact of every brand sale is especially profound, given the valley’s relatively small size — it’s got less than half the grape acreage of Lodi — and the fact that it’s essentially “planted out,” with very little room for new vineyards.
So the footprint of Napa’s wine industry is more or less fixed. Now, the power players who want a share of it must move their pawns around. It’s an expensive game: Silverado went for an estimated $150 million, Shafer reportedly for $250 million, Frank Family for $315 million. (And you thought buying a single-family house in the Bay Area was expensive.) At these prices, there’s a limited pool of viable buyers. That’s why, much of the time, it’s the same roster of players who make moves.
With more than 500 wineries in Napa County, it might seem far-fetched that any single purchase could matter very much. Yet it does: Over time, with each corporate takeover of a family-run estate, especially those as important to Napa’s identity and history as Phelps, the character of Napa Valley changes a little bit.
But we have to ask: Is corporate winery ownership necessarily a bad thing? Leaving aside general arguments about the concentration of corporate interests, I believe there is something unique about wine that makes it, at its core, a business suited to families — to multi-generational families.
There’s a simple reason for this. Wine requires land, which requires environmental stewardship. A vintner has the strongest incentive to care well for their land if they know it will be where their children and grandchildren live, and how their descendants make their living. Responsible farming makes better wine; it’s also essential to incentivize it as climate change progresses. Of course, corporations can farm responsibly, and many do, but the motivations are different when families are in charge.
The modern wine industry in Napa is basically half a century old, depending on how you define it. (One common marker for the beginning of this modern era is 1966, the year that Robert Mondavi Winery was founded.) Given the speed of M&A activity in the last decade alone, it’s not difficult to imagine that within another 50 years Napa Valley’s winery ownership may have shifted starkly and permanently away from families.
Maybe then we’ll look back on the 20th and early 21th centuries as a transitory, innocent age in Napa Valley, before the corporations took over.
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