Author: James Stannard
12 Jul 2017
Napa Valley, in northern California, is the heartland of West Coast wine. Located just above San Francisco, its flowing, textured landscape is freckled with 43,000 acres of planted vineyards that are hydrated by the meandering Napa River. To the east, the Vaca Mountains shield the valley from the blazing heat of Sacramento, while the rolling Mayacamas in the west buffet away the coastal breeze of Sonoma. With its temperate climate, expert growers and diverse volcanic soils, Napa has won a formidable reputation for producing some of the world’s finest Cabernet Sauvignons, which attracted 3.5 million tourists to the valley’s wineries last year.
“You’ve got to have the right microclimate and you’ve got to have the right exposure. You can grow grapes anywhere, but to achieve the quality that we are blessed with here, you really need a lot of things to go right with mother nature,” explained George Bursick, a winemaking consultant from Sonoma’s Russian River Valley.
Bursick has been dealing with vineyards for almost 40 years, and is part of the generation that turned Californian winemaking into a global phenomenon. Yet, while he and his contemporaries have traditionally developed wine in the north, Bursick has recently turned his attention 500 miles south, to a new phenomenon that is sweeping Temecula Valley, a wine region that sits between Los Angeles and San Diego.
The development of Temecula is an underdog story. A decade ago, its vintners undertook an ambitious plan to revitalise the region by 2020, by transforming it from a local winery hotspot into a destination that is “known and respected worldwide”. Since then, the quality of its produce has improved considerably, while various steps have been taken to protect the countryside. Today, this process is being coupled with a wave of both tourism and investment from China, which could see the 2020 project come to fruition, albeit later than scheduled. For the first time, Temecula could be about to find a place on the map, competing for tourist dollars with the likes of Paso Robles and even Napa Valley.
In the 80s, Temecula’s wine growers were generally retirees who, after years of sweating in city jobs, decided to live the dream of owning a vineyard. Unfortunately, their lax approach to wine growing meant that quality suffered. “They just didn’t understand what to plant where,” explained Bursick. “It’s a Mediterranean climate there. The Spanish varieties do well, some of the Portuguese varieties do well. You can’t grow Pinot Noir there but people try! Why not stick with Grenache or things like that?”
As such, many critics that tasted the region’s produce in the late 20th century still consider it to be sub-standard. For example, Terence Clancy, a wine industry executive, once described Temecula’s wines as smelling like burned tires and rotten vegetables, while others have said that they are too sweet, too basic, and generally out of balance. Worse still, because critics rule the roost, this stigma has both endured and become entrenched in most people’s minds.
Many critics that tasted Temecula’s produce in the late 20th century still consider it to be sub-standard
Given the region’s lagging reputation, most of its tourists have remained novice wine drinkers that come from nearby Los Angeles or San Diego. Meanwhile, hardcore oenophiles, particularly those from overseas, would prefer to visit vineyards in other places in California such as Sonoma or, better still, Napa.
Things changed, however, in the late 90s, when Temecula got a blessing in disguise in the form of a devastating bug infestation. The ensuing wave of Pierce’s disease wiped out roughly half the valley’s wine crop. It would be another decade before yields were stable again, but the destruction allowed for the start of a fundamental overhaul of the area’s struggling vineyards. “It gave us an opportunity to reinvest in the land and the product,” said Devin Parr of the Temecula Valley Winegrowers Association. “There has been increased investment from owners in the area giving their winemakers the tools, equipment and technology, both in the vineyard and in the winery, to make the best possible wines.”
This new, pro-investment approach was also driven by a change in management. When their crops died, the old breed of retirees had the choice of either spending time, money and energy on resurrecting their vineyards, or cutting their losses and selling their land to younger, more serious business investors. “Nowadays, it’s true professionals, ‘big money’, coming out, investing and competing with the ‘old school’, using modern technology, root stocks, modern winemaking and spending the money to make quality products. That’s been the revolution and the change,” explained Bill Wilson, a Temecula winery owner who also chaired the committee for the 2020 rejuvenation plan.
After more than a decade of reform, there is plenty of evidence that the region’s new approach has started to work. In 2015 and 2016, Wine Enthusiast magazine reviewed over 80 of the valley’s wines and gave roughly half of them scores of 90 percent or higher, which is admirable for any region. “It has [improved], but Temecula is a mixed bag,” said Robert Whitley, a journalist and wine critic based in San Diego. “You can find extraordinary wines there and you can find just passable fine wines… The real big change in Temecula in the past few years is the move toward planting more Mediterranean varietals. That’s where I see exciting things going on.”
This upsurge in quality has already put Temecula on the map for wine-lovers. “Most of the everyday, base business is coming from southern California. But Canadians, people from England, from all over the world are coming here, and recently I’ve seen that more,” said Wilson.
Grapes of cash
Another factor that is helping to make Temecula Valley a world-renowned name is the specific type of new investment that emerged during the mid-2000s. Although US investors had traditionally been eager to buy Californian wine properties, the financial crisis caused a lot of reluctance and uncertainty. “At a time when the US was scared to spend a nickel, the Chinese had millions and they were just gobbling up real estate,” said Wilson. “Money has been flowing in to these winery owners that are tired and selling at ridiculous prices.”
The early Chinese investors tended to be individuals who moved to California hoping to sell wine back to China as a retirement hobby. More recently, Chinese hedge funds and investment companies have also moved in, with the more ambitious plan of attracting Chinese tourists to the region. This has partly been spurred by President Xi Jinping’s corruption crackdown, which has encouraged people to spend their money abroad.
Chinese tourists are particularly drawn towards Chinese-owned developments such as Twelve Oaks because the owners tend to understand the needs of Chinese guests
The best of many examples of Chinese development in Temecula is the Twelve Oaks resort, a 700-acre plot of land that is being developed into a vast winery. When it is finished in 2019, it will include a Marriott hotel, an event space and several very expensive houses. The project is led by David Liu, a millionaire property developer whose company, Standard Portfolios, is underwritten by Chinese money. Meanwhile, one of Bursick’s new clients in the south is Europa Village, a similar development project that is trying to raise about $70m through Chinese investment.
A bespoke bacchanal
Last year, tourism spending in California rose by 3.2 percent, to $126bn. In Temecula Valley itself, tourism is trending towards being a $1bn industry. In 2015, tourists spent $696m, and in 2016, traveller revenues are estimated to have been over $700m. Chinese visitors make up a growing segment of this total influx, numbering 1.3 million statewide last year. “We anticipate China as being the number one international market in 2018,” said Walt Wang, China Marketing Manager for Visit California.
Chinese tourists are particularly drawn towards Chinese-owned developments such as Twelve Oaks because the owners tend to understand the needs of Chinese guests. “Chinese people visiting vineyards might be more hesitant to drink as much as people from other countries,” explained Christopher Ledsham of the China Outbound Tourism Research Institute. “People with Chinese-owned businesses are much more in-tune with these sorts of things. They also have great contacts with tour operators and tourism industry companies within China, so that’s a head-start.”
Meanwhile, US-owned businesses are also adapting to facilitate the new demand from Chinese visitors. California’s so-called ‘China Ready’ scheme has been operating for several months and involves educational seminars for businesses around California. In the scheme, wineries are encouraged to hire Mandarin-speaking tour guides, while hotels are advised to provide hot food alongside continental breakfasts and restaurants are shown the benefits of putting images on their menus.
“We want to teach them how to package Temecula and the southern winery region to their current itinerary. Most of the Chinese visitors will definitely go to LA, because LA is one of the gateways from China to California. We want to push these visitors a little bit beyond the gateway to Temecula. California not only has Napa Valley, we also have Temecula. So, even if you don’t go to northern California, you can still have great wine and beautiful wineries. I think it’s very promising,” said Wang.
Defining El Dorado
People take vineyard holidays either because they are oenophiles looking for excellent produce or because they are casual drinkers hoping to supplement a trip with a good quality wine-tasting experience. The changes that are presently taking place in Temecula are developing the region’s appeal in both of these terms.
The rising quality of wine makes the region more prestigious, and thereby attracts more tourists both from within the US and from other countries. Moreover, since Temecula’s finest wines are Mediterranean, the region has a unique feature that Napa lacks. Consequently, seasoned wine-drinkers may be tempted away from the north when planning a trip to the Golden State. Temecula’s proximity to the southern cities also makes it a good destination for more casual drinkers that come from further away; something that, again, neither Napa Valley nor Paso Robles can offer.
Meanwhile, the trend towards Chinese tourism is both adding to the region’s economy and helping it to gain global recognition. This is also helped by Temecula’s proximity to Los Angeles, yet is compounded by other factors, particularly Chinese management of local projects, and state-funded training of existing businesses through schemes such as ‘China Ready’. As such, the original 2020 plan is advancing in a very convincing way. “Over the next five years, this place is really going to be booming in a positive direction,” said Wilson.
Temecula will never be Napa, Sonoma or Paso Robles, yet that is most likely a positive thing. If the region can carve out its own identity as a destination for people seeking Mediterranean wine, in addition to providing excellent service to Chinese tourists, it stands a good chance of finally thriving after years of being overlooked by critics and tourists alike.