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Wine becomes a growing force in Napa County's downtowns
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Wine becomes a growing force in Napa County's downtowns

From the Napa Valley Wine Insider Digest: Feb. 21, 2020 series
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Wine, in the last four decades, has become a central part of Napa Valley’s identity. But in the last 20 years, it’s done the same thing in the fabric of the county’s respective downtowns.

There are more than 30 stand-alone tasting rooms (unaccompanied by wineries) in Napa’s downtown, making up around 15 percent of the total 230 for-profit, non-governmental businesses counted by the Downtown Napa Association. Thirty-two businesses are wine-centric, either tasting rooms or dedicated wine bars; thirty-four businesses formally offer some kind of wine tasting.

The last twenty years have seen the downtown tasting room scene take off, according to Craig Smith, executive director of the Downtown Napa Association. When he began work in Napa 24 years ago, there was but one singule tasting room – The Wine Merchant, which has since moved and become Back Room Wines.

“Retail is an entirely different world than it was 25 years ago,” he said, citing tourist traffic and the way technology has changed the nature of brick-and-mortar retail. “Rents in downtown were as little as 50 cents a square foot – now they’re something like $3.50.”

People weren’t coming to downtown to wine taste, he said. In fact, according to Alexis Handelman, who opened Alexis Baking Company and Café in downtown Napa 30 years ago, there was very little movement into downtown whatsoever.

“When I first came here (in 1982), people said, are you moving to St. Helena? That’s where the action is,” she said. “(They told me), don’t move to Napa. Napa’s this blue collar town – it’s the bedroom community of Vallejo and Mare Island.”

Handelman didn’t heed those warnings and opened her café in Napa in 1985, moving to her current location on Third Street in 1990. She’s witnessed “the revitalization” of Napa’s downtown, its transformation from a “barren wasteland to this amazing, vibrant community.”

Causality – whether the revitalization attracted tasting rooms or tasting rooms sparked the revitalization – isn’t exactly clear. But aside from a spike in foot traffic, the nature of downtown has changed in observable, quantifiable ways, according to Smith. His metrics show that there are “63 percent more tasting rooms” and 23 percent less retail in downtown than existed 15 years ago.

“Very, very few tasting rooms go out of business,” Smith said, noting that the observation was an anecdotal one. He counted out four that had closed in the last two decades. “Retail does (turn over), restaurants do a little bit less than retail – but the tasting rooms stay. They’re different models.”

Tasting rooms are often just a single sector of business for a winery, he explained. They don’t rely exclusively on turning a profit in their retail space. That makes the sip spots an attractive option for landlords, he added, noting that he believes Napa’s downtown could see additional tasting rooms open in the future.

Tasting room numbers has in the past sparked debate over whether Napa should take steps to regulate or limit their numbers, Smith said, adding the downtown association has abstained from taking a formal position in favor of “letting the market determine what happens.” Calistoga’s Chamber of Commerce has internally engaged in similar discussion, according to Executive Director Troy Campbell.

“Our question has been – when is it too many? What’s the magic number?” Campbell said of the tasting rooms, noting they currently comprise about 11 percent of total businesses in Calistoga. “Part of that process is that we’re looking at other towns – in Central California, in the Sierra Foothills – and finding out what the tasting room to ‘other retail’ ratio is.”

Handelman said the changing face of retail in Napa has “introduced this (downtown) that had really been sleeping for so long.”

“I welcome that people want to populate downtown and fill those spaces that had been empty for decades,” she said, of vacant storefronts.

Campbell, too, wondered aloud if regulation of the number of tasting rooms allowed in Calistoga would leave empty storefronts in its wake. The Chamber is currently doing an internal examination of the retail available in the city’s downtown, he added, hoping to create a kind of ecosystem of businesses to serve both locals and visitors.

In Napa, WALT Wines, a subsidiary of HALL Winery, opened its tasting room across from the Oxbow Public Market in the summer of 2019, making it one of Napa’s newest additions. One of WALT’S goals, according to General Manager Jeff Zappelli, is to help create that kind of business ecosystem in Napa’s downtown.

“This idea that you can stay, shop, eat and tasting in one area is very successful in other ecosystems across the country and across the world,” Zappelli said, calling it a “new concept for the California wine drinker.”

It’s a matter of considering how best to be complimentary to other businesses, he said, citing WALT’s tasting room in Sonoma as an example. The company works with Summer Vine, a retail store just down the street from their tasting room in Sonoma Square. The tasting room often displays merchandise from the store, and the store displays bottles of WALT wine, Zappelli said. In Napa, WALT is considering ways to interact symbiotically with businesses like the wine bar and restaurant Bounty Hunter, which stocks WALT’s bottles.

“We’re trying to massage those relationships, because Bounty Hunter is a customer, and we don’t want to compete too hard,” he said. “But they might not offer a tasting of our wines, so the person who just had a glass might then come across the street (to the tasting room).”

Handleman’s rent on Third Street has risen over the last three decades, something she says is just part of the changing landscape, though she acknowledges that rising rents have also raised the barrier to entry for new businesses downtown. And she understands how the presence of so many tasting rooms might sit strangely with long-standing Napa residents who have watched their city change dramatically.

“The whole idea of tasting rooms smacks to a time where people thought that there was this elite overlay to Napa,” she said. “But I’m so excited that downtown is this vibrant.”

Handleman, asked if she thought it would be viable to open up a business like hers present-day, paused.

“It’s still a struggle. We’re being naïve if we think that it’s not hard out there,” she said. “But the world was such a different place then, a different place than it was five years ago. And you have to be a participant in the time that you’re in.”

Editor's note: this story has been modified to reflect that WALT has formed a partnership with Summer Vine and has no ownership over the store.

You can reach Sarah Klearman at (707) 256-2213 or sklearman@napanews.com.

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Wine Industry Reporter

Wine industry reporter at the Napa Valley Register.

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