California produces 90 per cent of all US-grown wine with peak years in volume delivering more than 550million gallons, making the Golden State one of the largest wine producing regions in the world. There are only a few investment-grade wines produced in California, but they are highly prized and some of the most sought after wine brands.
California’s wine industry is very young compared to Europe, with the first vines being planted by Spanish missionaries at La Paz in Baja in the 18th Century. California’s first commercial wine was produced in 1824, with J.J. Warner’s vineyard in Los Angeles being the first of any size recorded in 1831. The 1849 Gold Rush led to a growth in the industry with vineyards being established in the Sierra foothills, close to consumers.
A number of European grape varieties were imported into the region by Hungarian, Agoston Haraszthy, from 1851 and these are thought to be the foundation of the modern Californian wine industry. Wine became increasingly economically important to the state and significant investment was made into the industry. A board of State Viticultural Commissioners laid down foundations in 1880 to 1895 and at the same time wine research and education commenced at the University of California, which continues today.
Wine production in California is governed by the system of American Viticultural Areas (AVAs) established under Federal Law in 1978 and is still evolving to this date. An AVA requires that at least 85 per cent of the wine must be from grapes grown in the area. State Law also sets out some requirements, in the case of California, this requires 75 per cent of the wine to be constituted from local grapes.
The effects of Prohibition in the 1920s and WWII followed by further problems with phylloxera all created challenges for the young Californian wine industry, with the more established regions of Napa and Sonoma coping better.
Since the 1960s a significant volume of Californian wine has been sold around the world however fine wine production is still in its infancy. This is being addressed by collaborations between the top chateaux in Bordeaux and enterprises in the Napa Valley, developing the knowledge and processes to establish this sector of the market.
Mouton Rothschild, for example formed a joint venture with Robert Mondavi in 1979 to develop Opus One, now recognized as one of the region’s few investment-grade wines. Mondavi has been one of the most important architects of the modern day Napa Valley wine industry, having established his reputation with his Oakville winery, opened in 1966. Napa produces less than 5 per cent of all the wine made in California but it is home to the most heavily capitalized wineries in the state and produces the most highly-prized investment wines.
Climate and Geography
The state of California extends for approximately 1000km in length and 200km width with vineyards planted throughout. The climate is similar to that of the Mediterranean; summers are hot generally and drought can occur, hence the wide application of irrigation. Winters are mild and there can be spring frosts. Coastline fogbanks are a differentiating feature, and whilst they do not penetrate far inland, are an important influencing factor on temperature and grape ripening. All vineyards in California have been classified into five climate zones, each zone having preferred grape varietals most suited to the natural conditions.
The coastal counties were identified relatively early on as providing the optimum conditions for production of finer wines, climatic features such as the Pacific fogs being an important influence. Napa is one of the warmer, drier regions on the coast with temperature fluctuations determined by hills and mountain barriers and openings to the sea. This region is the most important for Californian investment-grade wines.
California’s location on the San Andreas faultline has resulted in intrusions of several different soil types also an influencing feature.
The most planted varieties alongside the Californian varietals are Chardonnay, Cabernet Sauvignon which is particularly well settled in Napa, Merlot, Zinfandel, French Colombard, Sauvignon Blanc, Chenin Blanc and Cabernet Franc. Italian varietals Sangiovese, Barbera and Pinot Grigio are also grown and Rhone varietals Syrah, Grenache, Petite Sirah and Viognier.
The key wines have also benefited from diversification into regions beyond Bordeaux in recent years. The ‘Cult Californian’ Wines are made in miniscule volumes and are highly scored, consistently being rated by Parker in the high 90’s to perfect ‘100’ point scores. As a consequence these wines rarely come onto the open market and are highly sought after particularly in the US domestic market.
Examples of the record prices achieved by these wines includes a 6-litre bottle of Screaming Eagle Cabernet Sauvignon 1992 sold for US$500,000 in 2000 and technically the highest price paid for a bottle of wine.
Investment Wines & Producers
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