The most significant trend in the North Coast wine business this year and continuing into 2014 is the ongoing, pressing need for more vineyards.
Related to that, a large number of serious buyers are chasing a small number of coveted wine properties, and that activity is putting pressure on values. Rising values can make wine on the shelf a more expensive proposition, opening the way for even more imported wine.
Demand for vineyards is "illustrated particularly by what is happening with wine companies looking outside California for vineyards," Robert Nicholson, president of Healdsburg-based wine industry mergers and acquisitions specialists International Wine Associates.
In the first half of this year Santa Rosa-based Jackson Family Wines purchased about 1,100 acres of plantable land and vineyards in the 150-mile-long Willamette Valley appellation of western Oregon. The company bought the 250-acre Zena Crown vineyard in the Eola-Amity Hills subappellation, 200-acre Gran Moraine hillside vineyard in the Yamhill-Carlton subappellation and 350 plantable acres in the 655-acre Maple Grove Vineyard property at the southern end of the valley.
In late summer, Jackson Family Wines purchased the 15,000-case-a-year Solena Estate winery also in Yamhill-Carlton.
Earlier this month, St. Helena-based Duckhorn Wine Co. said it purchased a 20-acre vineyard site in the Red Mountain appellation in Washington state. Once developed, it will provide estate fruit for Canvasback, a new Red Mountain cabernet sauvignon. Planting is set to begin in spring. The 2012 vintage Canvasback is set for release in 2014 at a retail price of $40.
"While our roots are in Napa Valley, our vision has always been the idea that certain varieties find their best expressions in particular regions," said Alex Ryan, president and chief executive officer. “Cabernet sauvignon from Red Mountain in Washington state is one of these amazing combinations. This acquisition is a testament to how fully committed we are to Washington state and the Red Mountain AVA."
"As wineries increase the percentage of supply of their own vineyards vs. vineyards under contract, it is putting upward pressure on vineyard values," Mr. Nicholson said.
Factors reining in development of vineyards in the North Coast and in other California coastal areas include increasing difficulty and cost in securing government approval of the projects and restricted or limited access to water.Number of 'viable' buyers increases
There is a significant increase in the number of "viable" buyers of vineyards and wineries and a relative lack of available "viable" opportunities, according to Mr. Nicholson.