Hard Ball: The Coastal Defense

Nearly 30 years ago, Josh Jensen, fresh from a postcollege stint in the vineyards of Burgundy and eager to make his own wine, bought a Volkswagen camper and spent two years driving around California looking for the perfect place to grow Pinot Noir grapes. He finally found grape pay dirt, but nowhere near the famed Napa Valley. Instead it was 135 miles south, on a limestone-rich mountainside east of Monterey. Jensen planned to plant vines in the Gavilan Mountains at 2,200 ft. above sea level, making his future vineyard among the highest, and the coldest, in California. Around that same time, another young winemaker, Ken Brown, was turning down job offers in Napa to head even farther south, to the Santa Maria Valley near Santa Barbara. "People thought I was crazy," he recalls, "but I knew the potential here was incredible."

It was, but it took a while for the rest of the world to find out. Today, long after these two gifted vintners founded their award-winning Calera and Byron wineries, a land rush has broken out on California's newest winemaking frontier--its long and rugged central coast. "The only thing I can liken it to is the Oklahoma land rush," says the winemaker known as the "grandfather of Paso Robles," Gary Eberle of Eberle Winery. "Get yourself a wagon, hitch up your horses, grab a couple of stakes and go like hell." When Eberle graduated from University of California at Davis' viticulture school in 1973, he paid $250 an acre for prime land just out of Paso Robles. Now that property would be worth between $20,000 and $25,000 per acre, he says.

Winemakers from as far as Australia and as near as the Napa Valley are discovering what the pioneers have always known: the fertile soils and varied micro-climates from Monterey to Santa Barbara are capable of producing world-class wines--at consumer-friendly prices.

That would be a winning combination at any time, but it's even more appealing now. A global wine war is fermenting, with production exploding everywhere from South Australia and South Africa to South America--just about anywhere you can stick a trellis. Although U.S. consumption has increased 13% per capita since 1995, the supply is outstripping demand. Even the French are under siege.

There's a lot at stake. Wine sales should top $17 billion retail this year, and imports--whose market share dropped from 23% in 1997 to 19.5% in 1999--are rising again. The central coast is a second front against this growing invasion, in part because land prices, although rising quickly, are still a modest $8,000 to $12,000 per raw acre, compared with Napa where what little land is left sells for anywhere from $100,000 to $200,000 an acre. Lower costs will take some pressure off profits, as abundant supplies put downward pressure on the prices, particularly from Napa wines.

As a result, the central coast now boasts some of winemaking's biggest names. Beringer Blass (owned by Foster's--the Australian brewer, mate), Kendall-Jackson, Fetzer and Gallo (2000 sales: $1.5 billion) have all moved in or expanded there. Napa's Robert Mondavi Winery (2001 sales: $506 million) has boosted its holdings across Santa Barbara, Monterey and San Luis Obispo counties. "Every major winery in the state is betting on the central coast," says Robert La Vine, Mondavi's director of grower relations. "It's been a real rocket ride."