Crafting an iconic wine: the rise of “cult” Napa

This paper aims to examine the purposive strategy behind the growth of cult wines in Napa California since the 1980s. By leveraging the growing wine reputation of the region, a small number of new owners used extensive financial resources from other ventures to make a finely crafted, high-priced wine, in small quantities and sold through restricted distribution channels. Their aim was to compete with Bordeaux first-growths and create wine that would evoke the luxury connotations of craft, heritage, reputation and exclusivity. Because they were new, they relied upon experts to rate their wine, thus creating instant legitimacy with high scores and appealing to a small group of wealthy wine enthusiasts, many of whom were insecure in their knowledge of high-quality wines.

Semi-structured in-depth interviews with a sample of 13 cult winery owners, wine makers and a CEO were utilized in addition to descriptive statistics and secondary historical information drawn from public records.

Certain Napa producers have created iconic wines through purposeful behavior and extensive resources that are rare and difficult to imitate. Their success is also a function of positive accolades by influential wine critics whose scoring sanctioned their status as a luxury good. High prices and limited availability further manufactured the scarcity element that is crucial to maintaining demand for high-status goods.

This study examines the interface between supply of a product, external validation that legitimized it and a small but significant market of wealthy individuals who created the demand for it. This mosaic behind market creation reveals how successful producers have been in realizing the multidimensionality of luxury goods.