NAPA -- Bruce Phillips is a grapegrower, two-decade veteran of food and consumer-products industries, and a leader in agriculture.
He will be a panelist at the Business Journal's Impact Napa: Wine conference Thursday in Napa.
Since 2003, Mr. Phillips has been managing partner of Phillips Family Farming, LLC, which grows grapes on 72-acre cabernet sauvignon-focused Vine Hill Ranch in the Mayacamas Mountains and in the southwest reach of the Oakville appellation. The company also produces the VHR wine label, released in 2011.
For nearly a decade before that, he was director of information technology strategy for Constellation Brands. In the 1990s, he was director of expansion for natural juice company Odwalla. He has served on the boards of Napa Valley Grapegrowers and the California Association of Winegrape Growers.
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He spoke with the Business Journal about the tension between wine industry growth and the rural agriculture heritage of Napa Valley.What's the wine business outlook?
While there is a long history of winegrape growing at Vine Hill Ranch, extending over 150 years, the Phillips family began cultivating winegrapes in the Napa Valley in 1959. As a third-generation winegrape grower in the Napa Valley, my perspective of the outlook for the business in Napa County is extremely bright:Demand for luxury Napa Valley wines of singular character and quality continues to strengthen.The Napa Valley has never before produced so many wonderful-quality wines.Napa Valley winegrape growers continue to reinvest in their vineyard plantings, replanting postphyloxera plantings -- now 25 to 30 years old -- when interest rates are historically low and access to credit is very favorable.What's top of mind for Napa Valley wine businesses?
Given the continued growth in demand for exceptional Napa Valley wines, and the limited amount of quality Napa Valley appellated winegrapes available, sourcing is a significant concern for Napa Valley wine business.
Assuming that the available acreage suitable for the production of Napa County premium winegrapes has been developed, the supply of Napa Valley appellated winegrapes has been largely defined. With the continued development of exceptional wines and the resultant growth of demand for Napa Valley wines, the price of quality Napa Valley winegrapes continues to escalate.
This, in turn, has prompted vintners to dedicate significant resources to the acquisition of estate vineyards to shield themselves from heightening production and winegrape sourcing costs.
Napa Valley cabernet sauvignon, in particular, has continued to escalate in the past decade. It's really a supply-demand function. We have a defined amount of planted acreage in Napa County and varying levels of quality. Quality vineyard land in the county has been developed.
One form of growth is by volume, which is constrained, and others is by appellation, and that gets better pricing and more recognition. The latter is the path forward for Napa Valley, and it gets to the integrity of Napa County wine. That is happening in Napa County with the talk about the Winery Definition Ordinance and the percent-content restrictions from the [Alcohol & Tobacco Tax & Trade Bureau]. These conversations have been going on in this valley for decades. It's unique that Napa County is so focused on the quality and integrity of those wines and entering in new phase of that conversation. It’s all very healthy.