Changes in Las Vegas, the sale of Ovid Winery and the closing of the San Francisco restaurant RN-74 and the Santa Rosa-based Vineyard & Winery Management Magazine seem unrelated, but they are not. All of them point toward the changing future in the world of wine, and those who are listening and developing new strategies will benefit.
Back in the early 1980s Las Vegas had become a tired place — gone were the crooners of the 1950s, and Vegas was adrift, trying to find a new source of customers. America had changed: the biggest demographic, the baby-boom generation, was having kids and wanting to spend time with their families, opting for vacations to Disneyland over a weekends of debauchery in what had become a dark and dreary place.
So Vegas adapted, with hotels opting for bright suburban-like layouts that included large pools with amusement rides and attractions so that the kids might have something to do while the parents were out spending money gambling, having an extravagant dinner and maybe catching a show. And it worked. For a while.
The new Vegas model worked well through the ‘90s but gradually, as the kids of the baby boomers entered college, the casinos figured out that families vacationing actually spend less than singles, so the model began to change again. Present-day Las Vegas is shifting to a model that caters more to the millennial generation. The epiphany is that young people are less interested in what Vegas has historically been known for — gambling — but instead are more interested in social activities that include fast-casual dining, dance clubs, shows, outdoor bars and the potential for group adventures to the surrounding desert.
Ovid Winery was recently purchased by the family who owns Silver Oak Winery. Many of those lucky enough, and wealthy enough, to have tried the wine (a bottle of the Ovid cabernet sauvignon can go for more than $300 per bottle and there are often only a few hundred-cases made) lament that it’s been sold, fearing that the delicious, opulent wine might be changed by the bigger entity. The family at Silver Oak claims there will be no change to the Ovid program, but I am a bit skeptical — I have never seen a merger or acquisition that does not result in what is often a dramatic shape-shifting of the original.
Why did the husband wife owners, Mark Nelson and Dana Johnson, sell Ovid? Their first release had only been in 2005, and they had spent millions creating an expensive brand of wine, transformed a rocky piece of Pritchard Hill into manicured vineyards, hired Andy Erickson as their initial winemaker, Michel Rolland as consulting winemaker, Dave Abreu as vineyard consultant and had Howard Backen design them one heck of a photographer’s dream winery. Everything was perfect, exciting and fun. It is my guess, however, that they sold because the market is changing for expensive wines, they were tired of dealing with the wine business, where they were one of many, and they could cash out while the market is still strong. In short, they sold because they are mature, savvy business people who want to enjoy a little less time slogging it out in the brutal world of winemaking.
RN-74, the San Francisco restaurant known for its world-class list of expensive, often European wines (the wine list was nearly 100 pages long to begin with), is closing and being replaced with a casual barbecue restaurant, International Smoke, which will feature eclectic grilled offerings through a collaboration of Chef Michael Mina and Chef Ayesha Curry.
I once had dinner with the co-owner of RN-74, Wilf Jaeger, a former physician turned entrepreneur turned wine collector, turned restaurant-owner and philanthropist. This is one interesting guy with a background and stories of adventure that would make even the most experienced world traveler’s head spin. We were drinking some of the world’s most expensive wine, pinot noirs from France. I was trying to convince him that he should consider focusing less on meat and expensive wine and instead consider lighter fare with less-expensive wines. He smiled, asked for a pen, then scribbled something down on a scrap of paper and slipped it to me as he excused himself to use the restroom. On the paper he’d written, “Rich guys eat meat.” And he was right. But things change, and those rich guys to whom he was referring are all now retiring to Big Sur, apparently to be replaced by another group of carnivores. However, these new meat-eaters seem to prefer it barbecued in a more casual setting, enjoyed with presumably less-expensive wine.
The magazine business — and any other print business, for that matter — is tough beyond words. The trend toward online information is well documented, and the challenges associated with small, independent publications require nerves of steel, ultra-lean margins and a bunch of good luck. But what the closing of Vineyard & Winery Management Magazine signals is a trend that has been going on in the background for some time. Small farming operations are being consolidated, now either run by large vineyard management firms or by the larger companies that own, lease or otherwise run the operations. These organizations have their own relationships with suppliers and little need to read about industry-standard practices because these behemoths, collaborating with academic institutions such as UC Davis or Fresno, are often the ones creating the standards to begin with.
There will be a lot more wineries for sale in the coming years, and those destinations that cater to the desires of the millennials will succeed. (Take a look at Farmstead restaurant in St. Helena for an excellent model, but also check out their plans for a 70-room hotel to get a good view into what the future will hold). The consolidation of the wine industry will result in added pressure to all those businesses that cater to small, independent players. Holding on to the past is like trying to grab a column of smoke: You look pretty strange doing it, and it doesn’t work anyway.
Originally published in the Napa Register, June 2017