Auction houses have been upbeat on recent buyer demand for top California wines, but the global market picture for this US region looks mixed in 2023.
Marc Smoler, senior vice president at US auction house Hart Davis Hart, told Decanter: ‘We continue to see consistent performance from top California wines at auction.
‘The strongest demand is for mature vintages and large formats. Marcassin (especially the Chardonnay), Diamond Creek, Phelps and Heitz have been particularly robust.’
He said top lots from HDH’s July fine and rare wines auction included Dominus 1991 (one six-litre imperial) selling for US$5,019 (pre-sale estimate: $2,600-$3,800) and Ridge Vineyards, Eisele Vineyard Cabernet Sauvignon 1971 (one 75cl bottle) selling for $4,182.50 (estimate: $2,200-$3,500).
Auctioneer Zachys said in its mid-year review that Californian Kongsgaard and Promontory ‘have been seeing hammer [prices] 30% or higher over their low estimates’.
However, Matthew O’Connell, CEO of the LiveTrade trading platform at UK-based merchant Bordeaux Index, reported a significant drop-off in trading activity on California wines that predates a quieter fine wine market in general in 2023.
Despite that, Bordeaux Index is ‘trading more [California wine] than we were 10 years ago’, he said. Its data shows strong price gains on some individual wines in recent years as well (see chart).
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At Liv-ex, a global marketplace for the trade, the California 50 index – tracking Screaming Eagle, Opus One, Harlan Estate, Ridge Monte Bello and Dominus – fell 11% in 12 months to 31 July, but it was up by 15% in five years.
‘A bit like lots of regions, it’s had this broad increase between mid-2020 and peaking [in late 2022], but then it’s seen this drop-off in pricing,’ said Robbie Stevens, senior broker and territory manager for the Americas at Liv-ex.
He said US wines broadly tripled their share of trades by value on Liv-ex from 2019 to 2022, with more brands also being traded.
Looking ahead, O’Connell added ‘there is probably further to go’ on price growth for Dominus and Ridge, given their high quality.
(Image credit: Credit Unknown)
The Bordeaux Index view
Fine wine & spirits specialist Bordeaux Index kindly sponsors this section of Decanter, and provides its view on the market here every issue. It can be found at bordeauxindex.com
The US and especially California has for a long time been a key part of the investible wine market. However, secondary market activity has materially decreased in the last few years to the point where the region remains significant but not at the core of the marketplace.
The last market change of particular note was the sharp upwards price correction – probably overdue – in Ridge and Dominus, but this was across 2018-2020. Trading activity in the cult Napa wines – whether Screaming Eagle, Colgin, Harlan or Hundred Acre – has waxed and waned, but it is fair to say that it has not increased in the way one might have expected five years ago.
New release prices are a relevant dynamic – they are very much progressive year on year, but not reliably following or indeed followed by the secondary market: something which can lead to some uncertainty for buyers.
It is of course widely recognised that regions such as Oregon are continually gaining significance in quality and global recognition. But these wines are for the most part not investible, remaining of interest mainly to collectors.
Chris Mercer is a Bristol-based freelance editor and journalist who spent nearly four years as digital editor of Decanter.com, having previously been Decanter’s news editor across online and print.
He has written about, and reported on, the wine and food sectors for more than 10 years for both consumer and trade media.
Chris first became interested in the wine world while living in Languedoc-Roussillon after completing a journalism Masters in the UK. These days, his love of wine commonly tests his budgeting skills.
Beyond wine, Chris also has an MSc in food policy and has a particular interest in sustainability issues. He has also been a food judge at the UK’s Great Taste Awards.
