Interview: Caymus Vineyards’ Bold Bet On Pinot Noir Pays OffMay 20, 2013
When the economic downturn of 2008-2010 sent U.S. wine consumers scurrying downmarket, Napa-based Caymus Vineyards was among the first California luxury players to make the bold and controversial decision to lower prices. It turned out to be the right call, as the company’s Caymus Cabernet, Conundrum, Mer Soleil, Belle Glos and Meiomi labels all kept growing through the downturn—and have since returned to their pre-recession prices. Around the same time, Caymus made another shrewd play, investing in high-quality Pinot Noir for Belle Glos/Meiomi in 2009 and 2010 and locking in contracts for future years before 2012’s California grape shortage—and subsequent price hikes—took their toll. As a result, Belle Glos/Meiomi has more than tripled in size, to over a quarter of a million cases, in the past two years. Shanken News Daily’s Dan Marsteller recently caught up with Caymus owner Chuck Wagner to discuss these developments and progress across the business. Here is Part 1 of that interview:
SND: How did the decision to move aggressively into Pinot come about, especially given the softness in luxury wines during the recession?
Wagner: Coming out of the Sideways phenomenon Pinot was on a ramp, but then the financial crisis occurred and everything stopped. In the interim, a lot of Pinot vineyards had been planted along the California coast—thousands of acres of the right clones in high-quality areas. All of a sudden in 2009 and 2010, these grapes were left without a home. We were faced with a conundrum. There was a chance that if we bought in while grapes were inexpensive we’d be left with a lot of good wine without a market. In the end we bought grapes and signed contracts for future years. Meiomi’s surge in particular over the past two years was born out of that risk.
SND: How have your other key brands been faring?
Wagner: Caymus Napa Cabernet has roughly doubled to 80,000 cases in the last two years. Over the same period, Conundrum is up about 25% to 150,000 cases, and Mer Soleil Chardonnay is up sharply as well, to about 60,000 cases. There’s more market than grapes for Pacific coast wines like Belle Glos and Mer Soleil right now. For Caymus Cabernet and Special Selection, 2012 looks like a great year, and we’ll probably make more of each than we ever have before. We’re also expanding Conundrum Red, for which we planted 80 acres over the past two years.
SND: How’s the pricing environment right now at California wine’s high end?
Wagner: We’re back up to and even slightly over 2007 prices, so around $70 for Caymus Cabernet, $140 for Special Selection Cabernet and $30 for Mer Soleil, Belle Glos/Meiomi and Conundrum. I think the difference in the market post-recession is that consumers now demand reasons for price increases—whether higher grape costs, higher quality or what have you—whereas prior to 2007 wineries could move upward without explanation. That’s been a significant change.
SND: Any new products coming down the pike this year?
Wagner: My daughter, Jenny, who’s worked as my apprentice in viticulture and winemaking the past three years, will be releasing her first wines in 2013. They will be under the Emmolo brand (her mother’s maiden name), and include a limited amount of Napa Valley Sauvignon Blanc and Merlot at around $25 a bottle. Merlot’s reputation has suffered in California because it was overplanted in mediocre areas with mediocre clones, and consequently many of the wines have been ordinary. But if you’re willing to cut grapes off and reduce your crop, then you can make dark, high-extract Merlot. That’s the goal.