Forget Dow 13,000, for an indication of which direction the economy may be heading look no further than Napa Valley. After a record $3.1 million in wine was sold at the Premier Napa Valley trade auction this past weekend, it appears the economy may be looking up.
The Premiere Napa Valley trade auction was started in 1997 as a fundraiser for the Napa Valley Vintners Association, a nonprofit trade association. Each year 200 Napa wineries craft small lots of five to twenty cases of wine to be bottled under the “Premiere Napa Valley” brand. The wines are sold at auction to individual restaurateurs and wine retailers looking for the rarest of labels to add their wine lists.
Long considered an indication of the health of the wine industry, the auction is also considered a guide to the overall economy. The idea is that restaurateurs and wine retailers will spend more when they feel good about the economy, believing they can still make a profit on the wine later. Based on the this weekend’s results, an increase of 29 percent over last year, Napa Valley Vintners communications director Terry Hall told the Napa Valley Register the results are a good sign.
“Because the Premiere auction is a business auction,” he told the paper, “it really is about trade confidence in the Napa Valley and its ability to sell. These are business people who are spending a lot of money to buy these wines, and they have to know that they can resell them. (The record sales) indicate they are confident that they can sell these Napa Valley wines today and in the futures market.”
The CEO of the Crimson Wine Group and Premier Napa Valley’s 2012 co-chairman Erle Martin was also bullish on the future when speaking to the paper.
“Frankly, there’s a lot of enthusiasm,” Martin told the Napa Register. “It just seems like the (retail) marketplace is rebounding and the on-premise (restaurant sales) is rebounding. Every vintner I’ve talked to is echoing the same thing. “
While the wine industry has high hopes for the coming year, 2011 marked the end of a pop culture phenomenon. The California office of the US Department of Agriculture’s National Agricultural Statistics Service (NASS) recently released its preliminary state of the industry report. In 2011, Merlot grape prices rose 13 percent to $691 per ton, Pinot Noir grape prices fell 12.7 percent to $1,265 per ton.
According to Decanter.com, it marks the first time since 2004 that Pinot Noir prices fell at the same time Merlot prices increased. Pinot Noir prices rose in the wake of the hit movie "Sideways,”released in 2004, which famously disparaged Merlot while praising Pinot Noir.