Selling the very rare, collectible wines of the world, Adam Bilbey, SVP, Global Head of Wine & Spirits for Christie’s, has a unique view into the state of the wine collector. Adam maps the thought processes and changes in attitude of buyers and sellers of rare wine globally, and he is seeing “green shoots” in the market by mid-2025.

Detailed Show Notes:

Adam’s background - started w/ Berry Bros out of high school (2000) at Heathrow Airport shop, moved to Hong Kong in 2010 w/ Berry Bros, Sotheby’s in 2015, Christie’s in 2021

Christie’s is known for fine art, and wine is part of the luxury group (jewelry, handbags, cars), which is 20% of sales, and wine is 10-20% of luxury sales

2025 wine auction market

• Christie’s up 2x YOY Aug YTD, big single-owner sales (e.g., Bill Koch)
• Challenging market mid 2022-2024, newer vintage prices dropping more, more supply available
• In a downturn, buyers’ price expectations fall faster than sellers’
• “Green shoots” in 2025, pricing bottoming out

Burgundy has taken share from Bordeaux last 5-6 years, Champagne came up and leveled off, Italy is strong in the US but not in Asia, Burgundy is strong in Asia, but leveled off

Interest in more mature vintages, particularly Bordeaux, is still valued there

Focus on provenance, people won’t bid on poor provenance anymore

• 2-tier pricing, people paying for a premium for a great collection, single-owner sales, they like the story of who owned the wines

With a more global market than ever, people buy from anywhere

• The US has a broader selection
• Everyone buys from the UK
• Asia tends to need more focus (e.g., Burgundy)

Liv-ex shows -10% pricing last year, -20% last 2 years; auction prices move gradually, often lots don’t sell

More Millennials and Gen Z customers (45% 2025 from 30% 2022)

Female customers have been consistent last 4-5 years, a slight dip in the US, and growing in Asia

Younger generations are drinking younger wines, they like the security of younger wines, have a fear of disappointment in older bottles

Online auctions require ease of use

• Christie’s does 2x online auctions vs live
• Live auctions for key moments, key collections
• Various owner sales in online auctions

Provenance is improving with more communication (e.g., purchase & storage records), people working together (merchants, auction houses), and technology (digital microscopes, UV light, carbon dating)

Provenance is critical, as people remember the bad bottles sold to them over the good ones

Believes China will make a comeback in the next 2-4 years

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Making wine is capital-intensive. Making traditional method sparkling wine is even more so. From less juice from the grapes to double fermentation to more expensive bottles and taxes, Weston Eidson of recently launched Westborn Wine describes the differences in sparkling production.

Detailed Show Notes:

Weston’s background: >10 years winemaking in Napa (Silver Ghost), family are wine collectors, interned w/ Jason Moore at Modus Operandi (2012), and acquired extra Chardonnay from Steve Matthiasson

Westborn was founded in 2018, taking “Grand Cru” or single vineyard level fruit for sparkling wine (e.g., Heintz, Ritchie, Durell vineyards)

Partnered w/ Russell Bevan (mentor) and Nathan Reeves (made sparkling in Margaret River)

The goal is to start with high-quality wines and layer on complexity with traditional method aging

Took 4-5 years to find a stride & hone the winemaking process

Initially thought it would be 3 years aging vs 6 for 1st release (2019 1st release; 2018 1st vintage just disgorged mid 2025)

SKUs: vintage, Blanc de Blanc, Rose, Non-vintage

Luxury priced - $100+

Solera method perpetual reserve program, late disgorged release, lead to a lot of capital in inventory

2018: 500 cases; 2025 ~1,000 cases; target ~2,000 cases

Sparkling production costs vs. still wine

• Fruit costs the same (growers love it: less shrivel, gets fruit off earlier - less pest/disease pressure; spreads out the work)
• Press cuts important, ~25% less gallons/ton vs still wine, as they don’t take taille
• Need to make the wine twice: initial fermentation (vin clair), secondary fermentation (bottled with yeast and sugar)
• Custom crush costs are slightly more expensive due to double fermentation
• Bottles are more costly and need to be bought earlier (~$0.15-20 for a standard bottle; ~$1 for sparkling)
• Taxes higher: $2.40/gallon for sparkling wine, $0.07/gallon for still wine <16% abv
• Storage and financing costs are higher

Financing is combined with other brands, which may make it hard to start a sparkling brand as a stand-alone entity

Look at the business plan over 20 20-year time horizon, projecting cash flow positive in 2027 (9 years from founding)

Trends underpinning Westborn strategy: following Michael Cruse w/ grower CA sparkling wine, premiumization, sparkling doing relatively well, sparkling being used beyond celebrations

Take inspiration from Bereche, De Souza (lees stirring in bottle to amp up umami), and Selosse

People looking for experiences have a tasting at The Art Collective Napa Valley

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It’s a cycle that has been happening since the late 1800s. The need for agricultural labor in California is a cycle of bringing in labor and then deporting them when they become too visible. Elaine Chukan Brown, wine writer and author of recently published The Wines of California, describes the history, current situation with new regulations and deportation, and the tension put on vineyard workers’ wages in California and their impacts on the labor market and vineyard workers.

Detailed Show Notes:

The Wines of California covers 3 sections:

• How we got here - the history and what context allowed things to happen
• Where we go - the growing regions and key producers
• What we’re facing - marketing challenges, climate change

Interest in farmworkers started with Salud, a medical program for vineyard workers and their families

• Has mobile and physical clinics
• Successful because it provides care for workers and their families

CA is the largest farm region in the US

• Exports 40% of ag production
• Became nationally relevant in the 1900s, which led to the need for farm labor

Sources of farm labor (in chronological order)

• Indigenous people (until smallpox outbreak and reservations)
• China - exchanged labor for citizenship, after 10-15 years, expelled Chinese with the Chinese Exclusion Act
• Japan
• India
• Black sharecroppers from the South (small group)
• Mango (Philippines)
• Mexico (post WWII) - led to the current H2A program

When labor populations grow and get too big, they are expelled, which has been in ~20-year cycles

H2A Program - temporary work visa program

• Cannot be extended or transferred to another employer
• Employers must provide housing & transportation
• Biases towards big business to deal w/ compliance

FDR (1930s/40s) - Labor Protections Act created worker protections, but excluded agriculture

United Farmworkers (1975) - 1st farmworker protection legislation

Association of Farmers - farm wonders banded together to have more leverage against workers

Ever-growing CA labor regulations create large compliance requirements that end up favoring big business

Current system sets up farm workers’ wages as the only lever for farm owners to maintain profit margins and be economically viable (w/w/o gov’t subsidies)

New CA farmworker overtime pay law - 8 hours/day, 40 hours/week before overtime

• Derived from an office worker’s perspective
• Does not match the seasonal work of agriculture
• Employers have small margins, can’t afford overtime rates
• Workers make less money and need to get 2nd or 3rd jobs
• If workers get injured at 2nd job, workers’ comp does not cover wages of the main job
• Employers need to find more workers to do the same amount of work, and lose the experience and skills of the current workforce

Many crops (e.g., strawberries, peaches) need manual labor and can’t be mechanized

ICE raids & deportations: not a new thing, but what’s new is people with documentation (visas, amnesty recipients, citizens) are being detained and deported

• Creating fear, workers not showing up to work (some regions report a 70% drop in workers)
• Workers not going to farms on main roads (too visible)
• Families choose 1 member to go ot work, the other stays home to take care of the kids
• Historically, when the safety of workers is an issue, workers don’t respond to higher pay

US tariffs increase prices to consumers, decreasing sales; it may take decades for consumers to substitute for domestic wines

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With a large domestic market for wine, US producers often don’t focus a lot on exports. Honore Comfort, VP of International Marketing for Wine Institute, lays out the benefits and challenges of exporting wines globally. She covers the top markets for US wine globally, the role Wine Institute plays in helping US exports, and the potential impacts of the current trade war.

Detailed Show Notes:

Wine Institute overview

• Members are CA wineries (>1,000)
• Public policy organization focused on legislation (e.g., DTC shipping)
• Member dues are a sliding scale (based on prior year revenue & volume), baseline is a few hundred dollars

CA is the 4th largest wine region in the world after France, Italy, and Spain

• Largest market in the US
• The US market is 75% domestic (80% from CA), 25% imports
• Export is 4% (by value), 95% is CA
• Traditionally lower-priced wines, now a barbell (both low and high, but not mid-priced wines)
• Other countries have high taxes, duties, and tariffs on imported wines (int’l pricing often 2-3x US retail, 10x for India)

Cost to produce is high in CA (heavily regulated - environmental & labor force protections; land costs high)

Goal to showcase the diversity of CA wine globally, but only a sliver is available

Key int’l markets - Canada (#1 until Feb 2025; ~30% of US exports - premiers took all wine off shelves as part of trade war); Europe #2 (Germany is hard w/ strong domestic, low priced market; Scandinavia big); UK #3 (punches above its weight as oldest wine market, lots of wine writers, critics, traders; one of the broadest selections of CA wine); China, Japan, Korea, Mexico

Wine Institute has active programs in >30 countries for CA wines

Benefits of exporting wine: importers sell wine for you (no 3-tier system like the US), build brand visibility, position wines next to other great wines of the world

Challenges of exporting wine - takes investment, needs face-to-face storytelling

Small Napa producer (<5k cases) now exports 15% of sales working w/ Wine Institute

IWSR creates an index ranking all wine markets globally on attractiveness (2024 - US #1, Canada #2, Switzerland #3 - a small country, but strong wine culture and high value wines)

EU subsidies are pervasive (e.g., bottling line, materials subsidies, marketing support (Italy $150M/year), buying excess bulk wine), but hard to get complete info

The US has less support for alcohol (USDA has $8M/year for CA wine); wine is the highest value US export, but low in total value

Trade war impacts

• Market uncertainty has many importers not wanting shipments on the water
• Cost of input materials (e.g., steel, oak barrels) up
• Prior administration not interested in addressing trade disparities, potential to open up other markets (e.g., India - 150% tariff on alcohol, #1 whiskey market, #5 beer market; Vietnam; Thailand)
• Attitudes towards the US impact business (e.g., Denmark dislikes threats on Greenland, reducing US purchases; China is not a factor; Vietnam and Korea are positive on US products)
• Hong Kong’s move to 0% taxes on wine led it to be a hub of CA wine in Asia
• In 2019, China's tariffs on US wine plummeted business

Wine Institute promotes “0 for 0 tariffs” - keeping wine out of trade disputes

Major policy priorities: US dietary guidelines (on alcohol), getting wine back on the shelf in Canada, Ingredient & nutritional labeling, CA bottle bill on recycled glass, and environmental regulations

“Share Wine” program - building understanding, community, and engaging with wine consumers, focusing on 25-45 year olds, centering on relationship w/ technology

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As one of the major players in value wine, owning Charles Shaw (aka “Two Buck Chuck”), Bronco Wine Co.’s new CEO, Dom Engels, believes that the wine industry needs more innovation and focus on creating new entry points for younger consumers. From packaging to labels, Dom discusses how he’s navigating Bronco through the turbulence of a shrinking market for value wine from both the cost and innovation side.

Detailed Show Notes:

Bronco - Top 15 winery, owner of Charles Shaw (aka “Two Buck Chuck”)

• Has its own CA distribution
• House of >200 brands
• Large winery in Modesto, bottling in Napa, a boutique winery in Santa Rosa
• Owns ~40k acres, ~30k acres vineyards, but farming <10k today
• Owns Bivio, a logistics company

Charles Shaw

• No created by Bronco, acquired by Fred Franzia (co-founder of Bronco)
• Was a successful, premium, luxury Napa brand, 1st vintage 1978
• Went bankrupt in the 90s, Bronco bought the trademark in 1999
• 1st product in 2022 - $1.99 for good quality wine
• Low pricing enabled by low margins and Fred Franzia’s “genius” in bulk wine trading
• Partnership w/ Trader Joe’s through shared belief in creating accessibility and substantial cultural overlap

Believes the industry needs more good entry-level wines to get younger generations a start in wine

• The ethnic makeup of younger people is not the same as that of older generations
• “Not your father’s Cadillac” - young tend to rebel against what their parents did
• 11,400 wineries in the US create a diffuse set of interests, a lack of clear messaging (e.g., craftsmanship, agriculture) to separate wine from alcohol
• Accessibility could be driven by the right packages (including formats) and labels; good labels drive trial, good liquid drives repeat sales
• Significant marketing spend is difficult due to low margins
• Industry covers the right price points (e.g., Charles Shaw $3.49 in CA), but needs other elements, not a lot of great innovation or marketing at low price points (some pockets of innovation, e.g., XXL focus on high ABV)
• Need more transparency - ingredients, nutrition, ownership, provenance - Bronco is adding more back stories to brands

Enhancing social interactions is important; e.g., Jack Daniels’ ad that getting together with other people is healthy too

• New Bronco company motto, “better times at every table,” similar to Pernod Ricard’s “conviviality”

Believes dislocation of restaurant price vs retail is a core driver of wine industry decline, $14 IPA and $25 cocktails make people drink less

Navigating lower volumes requires being more efficient, sees opportunity in winemaking (most capacity utilization at wineries now <50%), distribution (reduce inventory), and retail

Likely too many brands in the US and too much shelf space in retail

Mothballing a lot of vineyards due to oversupply

• Can’t bring back in 1 year, but can in 2-3
• Cut buds down so vines don’t produce fruit
• Still requires some maintenance costs
• Vineyards in less optimal areas are to be pulled first, and he does not believe there will be an overcorrection

Competing in value vs international

• Can’t compete on labor
• Need to compete on quality, provenance, and taste
• Even tariffs won’t solve the cost gap
• EU subsidies help democratize wine

Tariff impacts

• Some input cost increases (e.g., China for glass)
• A good thing overall for the US industry, which will lead to more US wine being consumed
• Likely no structural change

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In an oversupplied market with rising costs, being a winegrape grower is probably the hardest it has ever been. Natalie Collins, President of the California Association of Winegrape Growers, breaks down the cost of winegrape growing in CA, the challenges in the marketplace, and the policy dynamics in the US, CA, and EU that continue to exacerbate the challenges for CA’s winegrape growers.

Detailed Show Notes:

CA Winegrape Growers - based in Sacramento, lobbies at the state and federal level

• CA has ~5,900 winegrape growers and 550k planted acres

Key cost drivers of winegrape growing

• #1 labor, ~45-50% of budget (30-45% CA interior, 45-65% CA coast); doubled in the last 10 years, driven by:
• High min wage ($16.50; most pay $18-30/hr) → increases take entire pay curve up, not just bottom
• 2016 labor law change reducing hours before overtime pay → reduced farmworker take-home pay (OR provides an overtime tax credit to employers)
• #2 regulatory compliance (water, air, worker health, safety), ~10% budget
• Cal State SLO study on lettuce growers - compliance costs ~$1,600/acre (1,366% increase since 2006, 637% since 2022)
• #3 land - CA has some of the highest land prices in the US
• #4 crop protection/fertility tools
• Farming costs ~$4k/acre Central Valley, $6-8k/acre Paso Robles, $8-10k/acre Sonoma, ~$10-17k/acre Napa

Grape pricing not rising w/ input costs - Central Valley ~$500-600/ton, Central Coast ~$1-2k/ton

• Bulk wine from Chile is cheap, and the US can’t compete on price

The annual CA Winegrape Crush Report shows pricing for all varieties by district

• No US federal support vs EU
• EU subsidizes at every level (growing, marketing, production)
• >e2B/year in direct and local support, enabling cheap wine production
• Crisis distillation - buy surplus wine to convert to alcohol (e.g., hand sanitizer)
• Vineyard removal and vineyard planting subsidies
• Aggressive marketing support (France investing $5B to support wine exports to the US w/ new tariffs)

US wines can have up to 25% foreign wine blended in and be labeled as US wine

2023-2024 - CA left ~300k tons/year on the vines; 2025 ~50% of vineyards don’t have a contract for the 2025 harvest; industry calling for another 50k acres to be removed (60k removed since 2022); all regions pulling out or mothballing/minimally farming vines

Tariff impacts (May 2025)- input costs increase, but can be positive for CA winegrape growers

• 2019 tariffs saw domestic wine increase its share by 10% vs EU wines
• Canada is actively removing US wines from shelves in retaliation; the US exports 10% of its wines, 40% to Canada

Deportations - creating fear, people are afraid to leave their homes for fear of their families getting separated

Seasonal labor is not big, 90% vineyards are mechanically harvested; H2A temporary workers (mostly from Mexico, all-in cost ~$30/hr, often more productive, cannot be paid more than domestic workers)

Economic impact of CA wine - 422k CA employees / 1.1M across US, $73B CA economic impact / $175B/year US

All agriculture is struggling in CA, replacement crops for grapes not easy (some almonds, pistachios, cherries); costs ~$30-70k/acre to plant a vineyard

Duty Drawback - a federal tax refund program meant to encourage exports

• If a winery exports wines, then imports them back, it gets 99% of import fees (including the Federal Excise Tax of $1.07/gallon) refunded
• If importing ~$3/gallon bulk wine, can save ~30%
• Mostly used by the top 5 wine companies
• 2024 - 38M gallons bulk imported (70M in 2022) vs ~70M gallons left on the vine in 2023

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Having met at the UC Davis Wine Executive Program, Kia Behnia, CEO, and Mason Earles, CTO, founded Scout to replicate the best sensor in the vineyard, “the farmer’s eye.” Leveraging off-the-shelf hardware, Scout uses AI to process images taken from a tractor to automate vineyard mapping, vine counting, yield forecasting, virus identification, and more. From managing vineyard assets to implementing precision agriculture to improve quality, Scout is harnessing the power of AI to optimize vineyard management.

Detailed Show Notes:

Mason’s background - UC Davis Professor, Apple, AI & agriculture

Kia’s background for Scout - owns the Neotempo wine brand, worked at Splunk, the “data for everything” company

The official company name is Agricultural Scout, dba Scout, the website is agscout.ai, so it can be called any of those names

Founded in 2022, initially more hardware-based, but pivoted to an intelligence company using off-the-shelf hardware

The goal is to “replicate the farmer’s eye” with an AI-based solution using cameras, tractors, and Scout cloud and mobile app (which can be used offline); the brain is centered around a phone

US only today (~50-100 clients, 300 blocks, 2M vines, processed 56M photos), going international in 2026

4 main use cases currently:

• Automate vine count, inventory, and mapping of vines - 4x faster than people could do
• Estimate crop performance - both vigor and fruit
• Yield forecasting - can use every step in the growing season to forecast yield with historical performance and weather forecasts
• Health performance and vine mapping - leveraging AI for virus detection

3 types of clients

• Estate wineries
• Vineyard management companies (“VMC”)
• Real estate investors or owners to track vineyards

Benefits include:

• $400-1,200 savings/acre
• Productivity gains through managing more acres with fewer people, identifying low-performing vines, and the program tells farmers where to sample
• Remote monitoring of faraway vineyards
• Early season yield forecasting
• Disease management - virus can cause $170k/acre damage over 3-5 years, costs $40/PCR test, the goal is to keep virus <15% not to lose the whole block, has a 7,000 photo database on vine disease

Bench Vineyards discovered 1 acre of missing vines out of 24 acres and filled them in

Pricing is a subscription model, $150-180/acre per scan

• Volume discounts >50 acres
• Neighborhood and AVA discounts
• Starter - 2 scan package (for inventory and virus)
• Professional - 6 scan package
• Typical customer starts w/ 2 and upgrades to 6
• Monarch promotion, customers get 1 free scan
• Up front hardware costs ~$3,000

New product in beta in July 2025 - ChatGPT Scout for vineyards

Marketing mostly through word of mouth, industry trade shows, and webinars have been effective, as has partnership with Monarch (already tech enthusiasts)

Barriers to purchase are often due to farming budgets built around labor

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From 200 mph electric cars to 20 mph electric tractors, Praveen Penmetsa, CEO of Monarch Tractor, leveraged his passion and expertise in vehicles, robotics, and batteries to develop the first smart, electric tractor. Making farmers more profitable and efficient first, and then sustainable, are the core tenets that drive Monarch’s business. Praveen discusses the core benefits of using an electric tractor and how it works with farmers to take advantage of government incentives, making farming more efficient and cost-effective.

Detailed Show Notes:

Praveen’s background: mechanical engineering, loves fast cars, worked on electric vehicles, robots, and battery systems

Founded Monarch in 2018, the company is currently the only company selling smart, electric tractors

Now on four continents, with most sales in the US, pilots internationally

Solution is a smart electric tractor with an app and piloting autonomous driving

• Fits in 5’ rows
• Runtime 10-14 hrs for pushing, 8-11 hrs for mowing, 4-6 hrs for heavy operations; takes ~6 hours to charge

Core markets - vineyards #1, dairy #2, orchards, horse ranches

Core benefits

• Save $7-12/hr on diesel savings
• Remote service and support, day and night - can submit a service ticket on the machine and get help remotely
• Product gets better over time with SW updates (e.g., released the ‘row follow’ feature)
• Can power other things, be used like a generator (e.g., night lights for harvest)
• Easier to train operators (smart screen vs 20 manual controls)
• Environmental impacts - reduces carbon emissions
• With increasing automation (mowing is 1st operation), more labor savings

Autonomous driving has guidelines by CA OSHA (need signs that the autonomous tractor is running and no people in the block), but there are no legal guidelines in other places

Pricing

• $90k baseline price + options + subscriptions
• Gov’t incentives can make it cheaper than a diesel tractor, 20-70% savings
• Monarch helps apply for subsidies, including charging infrastructure and solar installation
• Subscription charge for connectivity and SW has various levels; some charges can be offset by incentives with carbon offset reporting (e.g., Dannon gives dairy farmers incentive payments for the carbon offsets)

ROI driven by tractor usage, payback ~2 years; has an ROI calculator on the website; needs to be cheaper and more efficient before sustainability elements come into play

Most farmers want autonomy to reduce labor costs

Sells through a direct sales team and dealers

Marketing driven by non-electric tractors today, podcasts are helpful, social media, and demos have been very effective

• Social media, primarily Facebook and LinkedIn for owners, Google SEO, and local dealer support
• Demos are essential; most farmers want to try before they buy

Partnering with other companies to use their technology inside, also partnered with AgScout to leverage AI for vineyards

Barriers to purchase primarily worry about service and support, and wanting more autonomy for labor savings

Continuously update both HW and SW on machines, some tractors now close to 4,000 hours of operation (vs. standard tractors need to be replaced after 4-6k hours)

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