California Cult Wines: Why Should We Care?

As the name suggests, “cult wine” is a somewhat opaque reference to a group of wineries in California that have a strong (almost a pseudo-religious) following among wine enthusiasts and collectors.  The dynamics of this cult oeno-worship are such that the typically very small supply is faced with a high demand.  At that point, economics kick in, and combined with the psychology of coveting that which is difficult to obtain, a cult wine is born.  In less hyperbolic terms, California cult wines are generally Napa wines that have the following characteristics:

1. Very small production;

2. A famous or (at least) a highly respected local wine-maker;

3. Very high scores from established critics – particularly Robert Parker;

4. High prices (approx. “retail” of $300 to $1000+ per bottle);

5. Sales through mailing lists that are preceded by waiting periods on a waiting list, with occasionally targeted small allocations to Michelin-starred restaurants and highly regarded charity auctions.

There are no absolute lines here, other than small production, great reviews, and vertiginous prices. Ultimately, cult wines are a marketing marriage of quality and branding.  There are many self proclaimed California cult wines, and so-called emerging cult wines… There is no absolute consensus and no actual classification as that in Bordeaux in 1855 establishing a rigid hierarchy. Notwithstanding, many would agree that the following wineries produce cult wines:

Screaming Eagle, Harlan, Grace Family, Colgin, Bryant, Aruajo, Sin Qua Non, Dalle Valle Maya, and perhaps a relative newcomer – Scarecrow.

The “second tier” of what might be considered a California Cult wine (but is up for debate) casts a much wider net, and might be comprised of such wines as: Hundred Acre, Verite, Abrue, Marcassin, Kapcsandy, Dana Estates, Levy & McClellan, Dunn, Ovid, Schrader, Saxum, and probably a number of others.  Some industry veterans explain that the original “cult” wines was Heitz Martha’s Vineyard, and indeed, Heitz Martha’s Vinyard from 1974 is epic, and in my opinion transcends the cult label, as arguably the most important wine ever to be produced in U.S.  It is only possible rival in terms of rarity and prestige might be the first bottling of Screaming Eagle in 1992.

Cult wines are often seen as trophy wines to be collected, shown off, or put down in private cellars or storage facilities with an eye for future resale as an investment (an alternative asset class).  Unfortunately, as “investors” in California cult wines have learned during the recent economic crisis, the mythical mailing lists wilted away, and prices on most of the California cult wines dropped off – often even below the mailing list prices. Elin McCoy, writing for Bloomberg, points this out in her article, Cult Wine Crowd Drops Off Elite Mailing Lists with $350 cabs. “On wine Web site bulletin boards, collectors are trading tales of paring their lists. One planned to purchase from only three of the seven in-demand wineries whose mailing-list offers he received last month. Others are splitting their allocations,” she writes.

The emergence of the cult movement coincided with trends in the 1990s towards riper fruit and wines with bigger and longer fruit finish.  This was what presumably what earned high scores from the Warren Buffett of Wine – Robert Parker.  These wines are generally very expensive and with tiny production (often fewer than 600 cases per year) often commanded even several times their mailing list “release price” in the secondary market (i.e. speculators, auctions, restaurants).  This market crashed around 2008/2009.  Moreover, it has not come back, and it unlikely will to the same extent.  The three possible exceptions might be Screaming Eagle and to some extent Bill Harlan’s marquee wine, Harlan out of Napa.  The other wine that weathered the cult crash is Manfred Krankle’s Sin Quo Non, a strange brew born out of a barn-like winery with weird and sometimes risqué hand drawn labels, and an uber concentrated taste that drives the Francophile purists crazy.  It is hard to predict the future of these three cult survivors, and if I had to bet, I would probably pick Screaming Eagle as the only one that would at least maintain value.

The critics of California cult wines have a great deal to say, and they have been saying for a long time – even before the cult wine mystique was shattered by the economy.  There are two, none mutually exclusive positions.  The first considers California cult designation elitist, and judges the distribution methods and attitudes as undeservingly elitist.  The underlying notion is that great wine should not be treated as a material obsession.  The second view comes from serious wine collectors and wine “purists”.  These are typically collectors of French wines – mostly Bordeaux and Burgundy.  They claim that California cult wines have no history, no mystique of French terroir, and that they are over-engineered, relying on clever marketing to earn their status and their coveted 100 points from Parker.

It is true that the best vintages of top Bordeaux and Burgundy stood up to economic downturns better than high priced California or other elite new world wines.  The best Burgundy wine has continued to increase in value, and may claim the investment wine status even more so than its much bigger neighbor, Bordeaux.  Regardless, California cult wines or those that claim to be the new cults are generally great wines, assuming you like California wine.  I believe that many could age longer than 10 years, but most of them are not an investment.  Ergo, California cult wines are more for drinking, and should be enjoyed just as many other attributes of California.

(Yuri Vanetik is a private investor, philanthropist, and wine collector.  He resides in Southern California, and occasionally writes about wine, politics, and the economy.)