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Interview, Part Two: Chuck Wagner of Caymus Vineyards

May 21, 2013

In this second part of our interview with Chuck Wagner, the Caymus Vineyards owner offers his views on the changing retail and consumer landscape, as well as the challenges and opportunities facing California wineries in the years ahead.

SND: In the first part of this interview, we detailed the strong growth occurring across your upscale portfolio. What kinds of accounts have mainly been responsible for the upswing?

Wagner: The real driver for us has been the “new marketplace,” the expanding ranks of chain retailers that have a good wine section and good pricing but also have an experienced person working the floor, like a sommelier in a restaurant. Also, a lot of business has been moving to places where you can buy food and wine at the same time. That said, smaller specialty wine shops can still compete.

SND: And where, consumer-wise, are you seeing growth?

Wagner: In the last five years we’ve seen the emergence of the youthful consumer group that appreciates wine, and that goes hand-in-hand with the food and wine culture. My generation was brought up thinking of food in a very ordinary, meat-and-potatoes kind of way. But these kids have been brought up to think that food-and-wine is an art.

SND: What developments in luxury California wine have you optimistic about the future?

Wagner: One encouraging area is that growers across the state are better connecting the grape variety with the climate. I see it happening all over, but Monterey is a good example. Over the years there have been attempts to market Monterey as a place for Bordeaux varietals, but the wines never measured up to Sonoma or Napa. Now they’ve pulled the Cabernet and planted the right varietals for the climate, which are Pinot Noir and Chardonnay. But it can take 10 or 20 years for a region to make that kind of adjustment. Another exciting thing is the development of the Central Coast as a source for quality wines. Ten or 15 years ago the Central Coast appellation was known mostly as an area where larger, corporately owned winemakers were bottling inexpensive labels. Since then, its image has vastly improved, and the top wines coming out of the Central Coast are being priced equally with Napa or Sonoma.

SND: And on the less optimistic side?

Wagner: In addition to the fact that prices will fluctuate with inflation and supply and demand for land as our space diminishes, we have several costs that are outpacing inflation: California state income tax, insurance premiums and compliance with state regulations. The future holds some promise for (imports) even if California’s wine quality is strong. In an area like Napa Cabernet, the stakes have become so high that there will inevitably be some spoiled dreams. Our soils sold for $3,000 an acre when we started in 1972—now they’d sell for $300,000. And a ton of grapes has gone from $600 to $6,000 or more.

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