Far Niente winery bought a 133-acre vineyard in Carneros last week for $14.75 million. Though I live in San Francisco, I was surprised to see this on my morning TV news because it's a Chardonnay vineyard, and Napa Chardonnay isn't the media star that Napa Cabernet is.
The price, about $110,000 per acre, is about a third of what vineyards in the warmer parts of Napa Valley go for; that reflects the difference in value for Cab and Chard.
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It's an interesting move because there are two bets here. One is short-term on Chardonnay and it seems a little ambitious. But the other long-term bet is on climate change.
In the short term, it's a little surprising to see even a winery as successful as Far Niente put resources into selling more Napa Chardonnay. Napa Chardonnay seems to have a different audience than Napa Cabernet, which is broadly popular across a range of people from those with more money than sense to serious collectors and enophiles. Even most East Coast sommeliers admit a grudging respect for Napa Cabernet.
But Napa Chardonnay doesn't attract the enophile crowd at all. People who like a nice Chardonnay – I'm in that group – look for cooler climates. Even in Napa Valley if you have lunch with a vintner and they bring a Chardonnay, it's probably from the Sonoma Coast. And the high-end Napa Cab producers have mostly switched to using Sauvignon Blanc to make their white wines, following the example of Bordeaux.
Napa Chardonnay isn't cheap enough, or exciting enough, to bring in new consumers. It is the poster child for wine that is seeing its fan base age out of drinking alcohol. It's still a big fan base, but it's not one I would invest in.
If anyone can capitalize on selling more Napa Chardonnay at $70 a bottle, it's Far Niente, which has a beautiful property, beautiful labels and all the other ephemera that help convince people that a wine is twice as good as wines priced half as much. Far Niente CEO Steve Spadaratto told the San Francisco Chronicle that the winery always sells out of its 160,000 cases of wine per year, and thus it wanted more vineyards. He also said the company is looking for more Cab vineyards in Napa Valley.
In 25 years, these cooler Carneros vineyards where Chardonnay is planted might be those Cab vineyards. Already Carneros produces some of the best Merlot in Napa Valley, a little-known fact because varietal Merlot is out of favor. But Carneros Merlot finds its way into plenty of high-end wines for a number of reasons, not least that it doesn't develop alcohol quite as high as Merlot in warmer sites like Oakville. If you add Carneros Merlot to a blend, you don't have to add something lighter (or water) to bring down the resulting ABV.
Merlot is a harbinger of climate-change trouble. It's the most-planted grape in Bordeaux because it ripens early, which was a huge blessing when vignerons struggled to get their grapes ripe seven years out of 10. Now that excess ripeness is a problem, Bordeaux vintners are rethinking their variety mixes, even shockingly approving heat-resistant Touriga Nacional in 2019.
In Napa Valley, Merlot has been quietly disappearing. There were 6687 acres of Merlot in 2010, and 4319 acres of Merlot in 2020 – 35 percent less Merlot in just 10 years. I chose 2010 as a starting point to get past the post-Sideways effect. Napa Merlot grape prices have actually remained decent: $4047 per ton in 2019 (a non-fire year). It's not the $7943 per ton average of Napa Cabernet Sauvignon, but it's significantly better than the $3031 per ton average of Napa Chardonnay. The reason Merlot is being grafted over has as much to do with its reaction to heat as anything else. It's still a great blending grape, but it's getting harder to grow good Merlot in large swathes of the valley. But you can still do so in Carneros.
Cabernet Sauvignon has proven, so far, to be more heat-resistant than the Bordelais ever imagined. But this is not news: when temperatures start hitting 110 degrees (43 Celsius) nearly every summer, a Napa grower has to wonder how long the Cab gravy train is going to last. Nobody is going to graft over to Zinfandel before they absolutely must. Napa viticulturists have access to more funds and know-how than any other grape region in history, and every year more attention is paid to slowing down ripening rather than speeding it up.
In that context, it's not hard to look at the slightly cooler southern part of Napa Valley – Carneros and Oak Knoll District in particular – and say, that's the next generation's Cabernet spot. Maybe Napa Cab will be out of fashion by then. But if not, Far Niente's move last week could prove farsighted.