Lake County wine industry is ready for takeoff

Earlier this year, famed grape grower Andy Beckstoffer had an offer for 10 winemakers looking to make their mark in the wine world. He would provide grapes for the next three harvests from his vineyards in the Red Hills wine region of Lake County - for free.

Beckstoffer, whose stature comes from farming such renowned Napa properties as To Kalon and Las Piedras, made the deal to draw attention to the region at the foot of Mount Konocti. He contends Red Hills is the most promising cabernet sauvignon site outside of Europe.

But for many within the industry, Beckstoffer's gimmick just affirmed what they already knew: Lake County wine has arrived. Now, the hard part is for local vintners to ensure the rest of the world finally takes notice.

“Lake County has been making really good wines, but they have been overshadowed by their more favorite cousins,” said Rob McMillan, executive vice president of Silicon Valley Bank's wine division, referring to wines from Napa and Sonoma counties.

The county is more Levi's than Gucci, known more for offering family friendly vacations of Jet Skiing and inner tubing on Clear Lake as opposed to the fine dining and resort spas that serve the high-end clientele of Napa Valley. But the region is attracting much more buzz in the wine world, and economic trends bear this out.

“What we have seen over the last couple of years is that pricing has increased and been very strong for Lake County,” said Mike Needham, a grape broker at Turrentine Brokerage in Novato.

In 2014, Lake County surpassed Mendocino County in price paid per ton of grapes in the North Coast premium market. Last year, wineries paid $4,336 per ton for Napa grapes, followed by Sonoma at $2,443. Lake County came in at $1,601, an increase of 5 percent. Mendocino grapes fetched $1,520 per ton.

Demand for land on which to plant grapes has also grown. Lake County's vineyard acreage grew by 8 percent over the past year. Meanwhile Sonoma, Napa and Mendocino counties all had slight declines, mostly because of replanting to replace old vines. Lake County added 672 acres that brought its overall total to 9,454 acres, which is still the smallest on the North Coast.

But the trends can be seen in ways that extend beyond economic reports and Excel spreadsheets, such as on drives around the region's winding roads. Kelseyville, a town of a little more than 3,300 people, now boasts five tasting rooms.

“That to me says people are recognizing there is that potential,” said Debra Sommerfield, president of the Lake County Winegrape Commission. “We are getting there.”

Keeping it local

The challenge vintners face is to take the accolades given to their grapes and channel it over to wines that showcase the region, instead of having the fruit outsourced for use by major wine companies in blends for various North Coast appellations. That, traditionally, has been a problem for the county, as winemakers exploit rules that stipulate a “Napa County wine” must have 75 percent of grapes come from the county. That means a quarter of the grapes can be sourced from lower-cost markets such as Lake County to boost profit margins.

Major vintners own land in the county, including Jackson Family Wines of Santa Rosa and E&J Gallo Winery of Modesto, which in 2012 bought the 800-acre Snows Lake Vineyard in Red Hills for a reported $42 million. Jess Jackson first put Lake County on the modern wine map when he bought a pear and walnut orchard in Lakeport in the 1970s and converted it to grapes. His winery at the former orchard site served as a launching pad for Jackson's 1982 Vintner's Reserve chardonnay that helped usher in the premium American wine business.

But the big companies don't go out of their way to market their wines as coming from Lake County.

Bill Foley, owner of Foley Family Wines in Healdsburg, told The Press Democrat last month his purchase of the historic Langtry Estate & Vineyards in southern Lake County in 2012 made sense because acreage costs a third of what it would in Sonoma County, where a planted acre can easily be more than $100,000. His company did 1.1 million cases last year.

Foley Family Wines markets some of its Langtry wines as coming from its Guenoc Valley location, which is 1,000 feet above sea level and planted with petite sirah, chardonnay and sauvignon blanc. But it also uses its Lake County reds to blend into wines produced by Sebastiani Vineyards and Winery of Sonoma.

That has forced smaller, homegrown vintners to primarily chart the course on how to market Lake County wines, a debate that has lingered for decades.

“The larger issue for Lake County is trying to gain its own identity,” McMillan said.

A main component of marketing will be definitely be price. For example, the Obsidian Ridge estate cabernet sauvignon from the Red Hills retails for about $30 compared to similar regions such as Napa's Diamond Mountain and Spring Mountain areas where those bottles can range from $80 to $120, said Peter Molnar, co-founder of Tricycle Wine Partners, which owns Obsidian Ridge.

“In a way, this is a hillside vineyard for the rest of us (consumers),” Molnar said. “In Napa, you would have to do this $75 out of the gate.”

The Red Hills region has attracted the most attention given its elevation - the Obsidian Ridge Vineyards at 2,640 feet is the highest vineyard in Mayacmas range - and its dark red volcanic soils. Temperatures can drop as much as 50 degrees at night during the summer. It produces a cabernet that is more fruit-forward.

Cabernet prices soar

Given continuing strong demand by wineries, the price Lake County cabernet grapes has increased from below $2,000 per ton on the spot market five years ago to almost $3,000 per ton, Needham said.

The price spike came around the same time Lake County caught a break during 2011's harvest, when it was largely spared from rot that affected other North Coast counties, Molnar said. That harvest had many reviewers and sommeliers taking another look at the region and in turn attracted more attention.

“That (2011) wine really jumped out in a field where it was challenging for a lot,” he said.

The other notable variety is sauvignon blanc - it and cabernet sauvignon make up about two-thirds of Lake County's crop, Sommerfield said. Given that sauvignon blanc isn't a mainstay grape for other nearby counties, that fruit has the potential to carve a niche and separate Lake County from the rest of the crowd.

That's evident over at Chacewater Winery and Olive Mill in Kelseyville, where winemaker Mark Burch crafts sauvignon blancs that aren't as grassy or herbal; instead they have a more tropical fruit flavor. Grapes for the wine come from the Big Valley and Upper Lake regions, and a 2014 vintage sells for about $18.

Burch said he saw the potential when he first came to work in Lake County for Kendall-Jackson in the 1990s. He was amazed by the quality of fruit, but much of it was going over the hill to Napa. “I saw this great potential in sauvignon blanc,” Burch said. “I just fell in love with it.”

Freedom to experiment

The local industry has fully developed since the turn of the millennium, vintners say, both in the expertise in growing grapes and attracting winemakers who understand the terroir. For example, Ryan Zepaltas, assistant winemaker at Siduri wines in Santa Rosa, has his own label that has a Lake County sauvignon blanc. Zepaltas became a fan of the Lake County varietal after a tasting one particular bottle some years back, and actually went out and tracked down the vineyard's owner. The cost of Lake County sauvignon blanc grapes, which are priced from $1,050 to $1,400 per ton, also make it affordable for up-and-coming winemakers to take a chance on the crop.

“You can really push the envelope up there and can compete and win on the world stage,” Zepaltas said of Lake County's sauvignon blanc.

Winemakers also have more freedom to develop their distinctive style in Lake County as opposed to Sonoma and Napa counties, where they would be under greater pressure to ensure consistency year to year on the most well-known and profitable varietals.

“You almost can't make wine the way you want to down there (in Napa),” said Jonathan Walters, director of farming operations for Brassfield Estate Winery, located in the High Valley region on the eastern side of Clear Lake. “You have to be an ultra high-end consultant with a pet project for somebody.”

As Walters drives his pickup around the 267 planted acres of the estate, he notes that three different spots have cabernet sauvignon planted in the vineyards and another five plots have syrah.

“It allows us to do some niche stuff and really treat every lot differently,” Walters said of the estate. He noted that Matt Hughes, winemaker at Six Sigma Ranch and Winery in Lower Lake, has just joined Brassfield. Walters said he is excited to see what Hughes can to with Brassfield's tempranillo lot given his reputation for making exquisite wine from that variety.

One obstacle that Lake County will not likely overcome in the near future is obvious: It's hard to visit given that it's not near a major highway. Still, there are efforts being made to attract tourists. The mission-style Brassfield estate can rival those in Napa County, and Six Sigma has started preliminary work for its visitor center.

One notable new entry is Boatique Winery in the Red Hills region. It opened its tasting room in July and features a large complex and events center that also houses antique boats. The venue also offers panoramic views of the nearby mountains.

Sommerfield said she hopes the industry growth will attract more hotels and restaurants to create the infrastructure that attracts destination visitors like Napa and Sonoma. Most winery visitors are those who come up for recreational activities during the summer or have second homes in the area.

There is reason for optimism, however, as some have noted that Walla Walla, Wash., has been able to create a burgeoning wine tourism area despite being located in a remote area of the southeastern part of the Evergreen State. Some Walla Walla vintners took innovative steps, such as establishing a tasting room in Seattle to promote their wines.

“Getting those wines in front of people is the difficulty,” McMillan said of Lake County.

But those interviewed all agree the ingredients are there to make Lake County the next hot wine region. McMillan said all it would take for the region to take off would be something like a big feature in The New York Times or a Robert Parker score of 100. Whatever happens, the county's reputation for fine wine at a value will remain intact.

“We're kind of good with this. We know we can put a good bottle of wine on the table for a price that fits for a lot of people,” Molnar said.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.