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Possible
Good News for Lovers of California Whites The January 7,
2002 issue of Forbes Magazine has an article entitled “Fine Whine”.
This article profiles all of the money that has been invested in
vineyards in California over the past few years.
The result of all the investment is that there is a current glut of wine
from Napa. Evidently, most
of the investors who spent money to acquire or build vineyards put their money
into the high-end grapes, figuring that wine sold for $26/bottle retail would
provide a quicker return than cheaper wine.
However, the additional high end vineyards had to compete with higher
than normal yields in 2000 and 2001. The
timing of additional acreage plus higher yields matched up perfectly with the
recession of this year. Restaurants
and convention centers, normally buyers of expensive wines, have consumed
inventories rather than purchase additional wine. At this time,
few vintners have lowered the prices of their expensive chardonnays.
Meanwhile the wine keeps piling up in their distribution centers. Forbes expects that bankruptcy lawyers in the Valley will
pick up a few new clients. This
sounds like a buying opportunity for someone (WinoJohn, WinoBob, a new line of
business for us?). Interestingly,
one of the new vineyard owners profiled by Forbes, Patrick Kuleto, has graced
the pages of WinoStuff for a while. He’s
the owner of Kuleto’s Restaurants in San Francisco and Burlingame, California.
Pat, if you had only invited us to chat, two of my partners could have
told you that BIG REDS were the way to go. January 8, 2002 WinoWally
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