California’s iconic fine wines are ‘on-trend’ for investors and in a recent blog we commented on the USA fine wine market having shown outstanding growth within the last year, more than doubling its share of trade value on Liv-ex compared to 2019 and accounting for 6.1% of the overall regional market share on the exchange at the end of Q3 2020. For fine wine investors, this level of growth is significant and suggests there are rewarding opportunities for the future.
Napa remains the dominant region for USA wines, and today makes up roughly 70% of US trade with an active secondary market. With that in mind, we look at one of Napa Valley’s rising stars; Bond, a venture backed by the California super-brand, Harlan Estate.
What’s the background of Bond?
In a project conceived by the brilliant minds behind California’s cult Harlan Estate, Bill Harlan and Bob Levy, Bond was created in 1997 to develop a portfolio of wines sourced from small vineyard plots which provide geographic representation of the “Grand Cru” quality that vividly demonstrates the range of Napa Valley’s finest terroirs.
The winery focuses exclusively on single-vineyard bottlings from 5 (whittled down from 80) of the best and most unique sites in the Napa Valley. The approach is essentially a replica of Burgundy’s wine production and each of the carefully selected vineyards is labelled as a “Grand Cru” Cabernet Sauvignon, produced in very small volume.
Bond’s wines include Melbury and Vecina, both were first released in 1999, followed by St Eden in 2001, Pluribus in 2003, and Quella in 2006. Annual production of each of these wines is usually limited to 450 to 600 cases.
Additionally, Bond’s Matriarch wine, is labelled as a distinct brand and every year is blended to give the best expression of the ‘hillside Crus’ which they farm. Matriarch also debuted with the inaugural 1999 vintage and is made from a blend of Cabernet Sauvignon grapes from all five sites.
Investing in Bond’s wines:
Bond has received considerable critical recognition with multiple vintages having been rated 100 points by key ‘market influencing critics’ such as Robert Parker Jnr. This is a label now firmly on the ‘watch list’ and priced to offer value.
The US fine wine market is on an upward trajectory right now, in part this could be due to US domestic investors seeing more value in their ‘home-grown’ fine wines as European equivalents have had the tariffs imposed by the Trump administration incur a 25% price hike in the US over the last 11 months. Or simply California’s top wines are finally getting greater global appreciation as more volume becomes available outside of the US market.
With very limited production levels of the top wines, similar to Burgundy, there simply has not been enough made to satisfy growing global demand. The eye-watering prices of the iconic brands, such as Screaming Eagle, where you can expect to pay approximately £35,000 for 12 x 75cl of the 2016 vintage currently, to six figure sums for older and rarer years reflect the great quality and scarcity of the best of Napa.
California has seen wine-making partnerships with some of Bordeaux’s greatest producers in recent decades, who saw the potential of the vinous gold ‘in them there hills’. Not unlike the pioneering prospectors who first ‘rushed’ to California, dynasties such as Chateau Mouton Rothschild’s Baron Philippe de Rothschild saw the vision and founded Opus One with Robert Mondavi, who went on to influence a number of the great US estates. Similarly, Christian Moueix, owner of the iconic Chateau Petrus, founded Dominus, another highly prized US investment wine.
Increasing knowledge and investment in wine-growing on the West Coast is now finally being recognised in the secondary market. US investment wines are enjoying the limelight right now and offer the opportunity to further diversify and strengthen a fine wine collection.