E. & J. Gallo Acquires Iconic Stagecoach Vineyard

The famed Atlas Peak purveyor of high-end Cabernet joins the Gallo family. What does this mean for the future of the wineries who source grapes from them?
E. & J. Gallo's newest acquisition / Photo courtesy Stagecoach Vineyard, Facebook

While practicing internal medicine in Pinole and making wine as a side project, Dr. Jan Krupp decided it was time to take the next logical step—start his own vineyard. As fate would have it, in 1991, he found himself with a remote parcel of land northeast of the city of Napa.

After his Cabernet Sauvignon and a smattering of other grapes became popular with the local community, Krupp seized the opportunity in 1995 to acquire 750 acres of rough, unwanted, overgrown land that had become available on nearby Atlas Peak. Situated on Oakville’s Pritchard Hill, the site offered south-facing slopes and a loamy soil conducive to growing red wine grapes, particularly Cabernet Sauvignon.

In acquiring Stagecoach Vineyard, Krupp’s 1,300-mountaintop acres (600 of them planted), the privately held, family-owned E. & J. Gallo is throwing down the gauntlet on its commitment to premium winemaking, particularly high-elevation Cabernet.

“Over the past several years we have been improving our capabilities to make world-class wines,” noted Roger Nabedian, senior vice president and general manager of Gallo’s Premium Wine Division. “Opportunities like these present themselves very rarely. It’ll allow us to push into more premiumization of our wines.”

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Gallo has been purchasing fruit from Stagecoach Vineyard for many years, using the grapes for its Louis M. Martini and Orin Swift brands, and joining the ranks of more than 90 other wineries who source grapes from the iconic vineyard. In the short-term, this means the grapes will also be available for Gallo’s William Hill Estate Wines, just down the road, with future wine projects and line extensions to come to other existing brands within Gallo’s portfolio.

“It felt like a once-in-a-generation opportunity, a mountaintop vineyard in the Napa Valley with 600 planted acres,” Nabedian said. “It could never be replicated. Dr. Krupp is a meticulous grape grower. We’re talking about a world-class planting in excellent condition.”

Nabedian would not disclose the purchase price, but did say, “It’s a significant investment for the Gallo family.”

It no doubt signifies the continued demand for high-end Napa Valley Cabernet Sauvignon acreage, especially given that the valley is largely planted out, with most of the valley floor and plantable hillsides already taken.

Weighted average wine grape prices for Napa Valley Cabernet Sauvignon in 2015 were $6,285 per ton, with a high of $48,000 per ton. Stagecoach fruit, depending on the individual contact, is undoubtedly on the higher end of the spectrum.

The Napa Valley Register reported 2015 as a banner year for land values in the AVA, detailing the average floor price per acre as $310,000, up from $270,000 in 2014, a 14.8 percent rise attributed to the California Chapter of the American Society of Farm Managers and Rural Appraisers.

According to Vintroux Estates and Vineyards, a real estate firm based in Northern California, premium Cabernet Sauvignon vineyards in primary areas like Rutherford and Howell Mountain (which includes Atlas Peak) are being sold for upwards of $400,000/acre.

At a minimum, for 600 planted acres in such a prime location, at a baseline of $400,000/acre, that would add up to $240 million, which doesn’t include the other 700 acres that haven’t been planted yet, as well and the value of the Stagecoach name and existing grape contracts.

Dr. Jan Krupp himself sent out a press release following Gallo’s announcement to say that he will be continuing to produce his own brand of Krupp Brothers wines, and that he is under contract to buy a property in Napa with a winery and two tasting rooms. He also noted that he will continue to manage Stagecoach Vineyard and that Gallo will honor all existing grape contracts, and be working into the future with his current team.

Published on March 24, 2017
Topics: Industry News
About the Author
Virginie Boone
Contributing Editor

Reviews wines from California.

Contributing Editor Virginie Boone has been with Wine Enthusiast since 2010, and reviews the wines of Napa and Sonoma. Boone began her writing career with Lonely Planet travel guides, which eventually led to California-focused wine coverage. She contributes to the Santa Rosa Press Democrat and Sonoma Magazine, and is a regular panelist and speaker on wine topics in California and beyond. Email: vboone@wineenthusiast.net

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