French invade the US

So why exactly are so many top French wine producers choosing to invest in American wineries? A much shorter version of this article is published by the Financial Times. Above, Cathiard Vineyard in the west of Napa Valley.

Following in the footsteps of Georges de Latour, who founded Beaulieu Vineyard in the Napa Valley in 1903, French wine producers have long played a part in California viticulture. But why, since 2013, have so many flocked to buy American wine estates? 

The modern wave began in 1973, when Moët et Chandon chose Napa Valley as the location of their second non-French sparkling-wine facility, after Argentina. The next milestone in Franco-California wine relations came in 1976, when the late Steven Spurrier’s Judgment of Paris blind tasting demonstrated that California was producing wines that France’s wine gurus preferred to their own top wines. One of the tasters, Aubert de Villaine of world-famous Domaine de la Romanée-Conti in Burgundy, quietly went into business the following year with Napa grape grower Larry Hyde, a relative of de Villaine’s American wife, to establish HdV Wines.

Then in 1979 came the shock announcement that Baron Philippe de Rothschild, of Bordeaux first growth Château Mouton-Rothschild no less, was going into business with Robert Mondavi of the Napa Valley to produce a California wine in the image of red bordeaux. (It would eventually become known as Opus One.) The fact that the Dewavrins, who ran the eminent Bordeaux château La Mission Haut-Brion decided to buy a wine property in Napa Valley in 1980 eventually caused such a rift in their family that La Mission was put up for sale the next year.

The next wave of French investment in California wine production came soon after François Mitterrand became president in 1981. His Socialist policies spread doom and gloom in the French business community, especially among those producing champagne. Louis Roederer, Mumm and Taittinger all established sparkling-wine outfits in northern California in the 1980s, when Christian Moueix, who had been managing his family’s estates in Pomerol, including Petrus, laid the foundations of his Dominus Estate in Napa Valley (and in 2008 added Ulysses up the road).

There were a few individual initiatives around the turn of the century. Jean-Charles Boisset of Burgundy had long been in love with California and bought his first winery there in 1999. He went on to establish a family of Napa and Sonoma wineries while growing the Boissets’ Burgundy operations considerably with his sister Nathalie, as well as establishing his own next generation with Gina Gallo of California wine’s most powerful family. And in 2001 the French luxury conglomerate LVMH bought Newton Vineyard in Napa Valley to make it a sister company to Domine Chandon.

But the major wave of French investment has come in the last 11 years. In the vanguard was the Pinault family’s Artémis Domaines, which approached Bart and Daphne Araujo out of the blue to buy their Araujo Estate in Calistoga, renaming it Eisele Vineyard. Biodynamic techniques were already firmly established at the California property while they were still in their infancy at Artémis’s French properties.

Another of Bordeaux’s best-financed wine producers, the owners of Chanel as well as Châteaux Rauzan-Ségla and Canon, acquired St Supéry in 2015 from Robert Skalli, most famous for his inexpensive southern French varietals, entailing quite a step up the ladder of glamour for this Napa winery. Since then, French investment has come thick and fast, mainly but not exclusively from Bordeaux to northern California: the Tesserons of Château Pontet-Canet bought actor Robin Williams’ Pym-Rae in 2016; 2017 was the first vintage from the Trinité Estate established by Gonzague and Claire Lurton of the Médoc in Sonoma’s Chalk Hill; AXA Millésimes bought Outpost high on Howell Mountain in 2018 (and two years later added Platt Vineyard on the cool, in both senses, Sonoma Coast); and in 2020 the Cathiards of Château Smith Haut Lafitte turned the original Flora Springs property in the western foothills of Napa Valley into the Cathiard Vineyard.

The giants of Champagne followed suit. Champagne Louis Roederer went on a buying spree, adding Merry Edwards of Sonoma in 2019 and terroir-driven Diamond Creek Vineyards in 2020 to their initial sparkling wine investment in Roederer Estate in Anderson Valley. Similarly, LVMH, via its various divisions including dominant champagne producer Moët Hennessy, added a majority stake in Napa Valley’s luxurious Colgin Cellars in 2017 and then bought Joseph Phelps in 2022, to be run by Opus One veteran David Pearson.

So why has there been such a transfer of funds from l’hexagone to the golden state? According to Christian Seely of AXA Millésimes, they decided in 2016 that they wanted to buy in Napa because ‘it’s rather logical and quite interesting to see somewhere else that makes great Cabernet but is very different’.

And transatlantic transactions have not been restricted to northern California. Several Burgundy producers, including Drouhin and Louis Jadot, have invested in Oregon, intrigued by the challenge of applying their expertise in Pinot Noir and Chardonnay to the west coast. More recently, Étienne de Montille from one of Burgundy’s most famous families decided ‘having another hectare of a [Burgundy] Premier Cru would not move us forward. So [we thought] let’s go outside of our comfort zone.’ They looked all along the west coast of the US, eventually plumping in 2017 for Sta Rita Hills in one of the coolest parts of Santa Barbara County for their impressive Racines label.

But experimentation, and the realisation that France may not have a monopoly on fine-wine production, are far from the only drivers of the current phenomenon. French wine producers, especially those in Bordeaux, are becoming increasingly frustrated by their distance from their end consumers. Not only does this mean they don’t know enough about them, it also involves handing over part of their potential income to intermediaries. The California wine model of selling wines direct to consumers (DTC), via ‘wine clubs’, mailing lists and preferably on allocation, has become increasingly attractive to them.

Futhermore, owning an American wine producer gives them the precious right to sell their French wines direct to American consumers without having to rely on the US’s notorious three-tier distribution system (which encouraged DTC sales in the first place). 

The most recent purchase, by France’s powerful Bouygues family, owners of second-growth Château Montrose as well as cult Loire estate Clos Rougeard and Domaine Henri Rebourseau in Burgundy, has been on the east coast. Lost Mountain, a small but successful venture in Virginia, is the latest recruit to a wine group now known as Eutopia Estates. General manager Pierre Graffeuille, ex Château Léoville Las Cases, explained to me by email after we met at a small celebratory dinner in Paris, why they are so pleased to have a foothold in the American market. It’s not just the educational value of discovering a new terroir, and the advantages of geographical diversification in an era when weather effects on the growing season are increasingly unpredictable, but ‘owning a vineyard in the US gives direct access to one of the largest wine markets in the world. Moreover, US wineries have a great expertise in “direct to consumers” through their wine club and hospitality programs which can be inspiring.’

Florence Cathiard of Château Smith Haut Lafitte and Cathiard Vineyard was in London recently on a daring mission: to hold a blind tasting of 2021s, only their second California vintage, for a handful of us wine media with eight stars of the Napa Valley Cabernet firmament, including Screaming Eagle and Scarecrow ($2,450 and $824 a bottle respectively). She chose them on the basis that these were all 2021s that had already been released – no Harlan, for instance – and which had garnered high scores.

The group ranking, with one point given to our favourite, 10 to our least favourite, is in the box below, but Anthony Rose of The Independent, who has been writing about wine almost as long as I have, and I actually chose the least expensive wine, Founding Brothers from the Cathiard Vineyard, as our favourite.

Florence, who also tasted the wines blind, was mightily relieved to see Cathiard Vineyard’s principal wine do so well even if she preferred Screaming Eagle. Her husband Daniel, less convinced by the tasting exercise, and possibly nervous about the outcome, stayed at home.

But the tasting, and my experience of the produce of virtually all the names mentioned above, does seem to suggest that French wine producers are capable of making excellent wine in the US, at the same time as being able to sell their French wines more profitably to millions of American wine consumers.

Referring to the traditional sales system for Bordeaux wines, the Place de Bordeaux, Florence Cathiard admitted that she and her husband had ‘made our small fortune in wine thanks to the Place, but now that interest rates have risen, the Place is sick’. She mimed slashing her throat. ‘My niece is now running our Napa boutique, selling our wines at the same price as the Place but at a much higher margin.’

I wonder how many more French vignerons are currently scouting westwards?

Blind tasting results

Tasting notes, scores and suggested drinking dates are in Outpost and Cathiard Vineyard. Some international stockists may be on Wine-Searcher.com although most of these wines are sold directly from the producer à l'américaine.