I arrived at the farm pedaling my bicycle like mad, threw my bag into the warehouse, and went up. Walking up the lush grapevine path, I saw the noticeably reduced number of workers cleaning the drip irrigation lines and, in the distance, Dad and Mom checking the water potential.
“Our son came early?”
The moment she saw me, Mom smiled brightly, lifting her sun cap.
“I finished a bit early. Were there any additional vinegar orders?”
Dad, who had been meticulously checking the SWP (Stem Water Potential), raised his head and spoke.
“Actually, we got an additional order for a thousand bottles next week. If we leave the boxes at the farm entrance like before, Mr. John Anderson will come load them up and take them.”
“If it’s a thousand bottles, Dad and I can handle it between us.”
“Right. We can bottle the vinegar over the weekend and leave them out at dawn.”
“But Dad.”
“Yeah?”
“Have you thought about what to do with the money from the vinegar sales?”
For a moment, Dad and Mom looked at each other, seemingly flustered.
“Well…”
“You were going to pay back the bank, right?”
“That too, but don’t we need to save up cash to be prepared in case something happens later?”
“You’re right. I think that’s correct too. But…”
“But?”
I agonized over how to explain this, then resolved to break through head-on, thinking there was no other way.
“Around October this year, a movie called *Sideways* is coming out.”
“*Sideways*?”
“Yes. It’s about wine and love, you could say.”
“So?”
“I read the synopsis, and it’s about Pinot Noir. Ah, have a seat.”
First, I seated my parents in the shade of the grapevines, then plopped down myself and began to talk.
“Pinot Noir is a different grape variety from the Cabernet Sauvignon we grow. It’s a variety from France’s Burgundy region, with thin skins and a light ruby color.”
Mom asked, her eyes sparkling.
“It’s different from ours?”
“Yes. Cabernet has thick skins and deep color, so it has a considerably different charm from Pinot Noir.”
“Oh— so?”
“The main content of the movie is about Pinot Noir. As you know, Hollywood movies don’t just end after you watch and enjoy them; they have considerable influence on people. So…”
Just as I was about to launch into a lengthy explanation, Dad cut right in.
“So what you’re saying is, ‘People who watch the movie will look for Pinot Noir, and demand will increase sharply,’ is that it?”
Clap!
I clapped my hands and pointed at Dad.
“Exactly.”
“Hmm…”
I had expected him to naturally refuse, but unexpectedly, Dad contemplated seriously. Come to think of it, hadn’t Dad run a business before, even if he had failed?
“But the movie has to do well, right? What if it flops?”
The fact that he was asking this meant I had piqued his interest enough, so I felt I had already cleared half the hurdle of persuasion.
“Dad, think about it. What if we secure Pinot Noir and the movie flops? We just sell that Pinot Noir well. If the price doesn’t plummet, our chances of taking a huge loss aren’t high.”
“Hmm…”
“On the other hand, what if the movie scores a moderate hit or higher? Pinot Noir prices will soar, and we’ll reap huge profits.”
“So you’re saying we should make money that way?”
I leaned my upper body further forward and spoke with sincerity.
“Dad, I don’t want to use that money to simply buy a better house or a better car for us.”
“Then what?”
“More capital can expand the farm and equipment on a larger scale. It is already, but as time goes on, economies of scale will increasingly dominate agriculture. The larger the farm, the lower the costs relative to area, and the greater the profits. If we diversify varieties while doing so, we can overcome income instability depending on the popularity of each variety.”
Mom, who had been listening, spoke with an anxious expression.
“What if we suffer a huge loss doing that?”
“We have to work to prevent that. We started with only ten thousand dollars anyway. And we made more than that making vinegar. We only produced twenty thousand liters on a farm capable of fifty thousand liters, and if all of that sells, it’s tremendous profit. Crops don’t just disappear.”
“That is true…”
Perhaps because she already had experience growing them, Mom was easily convinced. At that, Dad, who had been biting his lip in thought, spoke.
“So in the end, you mean to use the funds we’ve secured to buy up Pinot Noir in advance… but where do we store what we buy?”
“Ah, don’t worry about that. There’s something called a Custom Crush, where you rent another winery’s equipment and have your grapes contract-brewed. We tie this into a multi-year supply contract when contracting with a Pinot Noir farm, contract at the barrel stage—barrels are wooden casks made of oak—and move them to the Custom Crush facility.”
“Ah, so we move them from the grape farm to the contract brewing facility?”
“Yes. If we lease barrels or tanks there and only pay a monthly usage fee, the initial cost isn’t high.”
“Then the monthly cost could be a problem?”
“For wineries that properly produce quality wine, monthly costs aren’t a big problem. Because they contract with restaurants by the case. For example, a restaurant representative comes to the winery, tastes the wine from the barrel, makes a pre-contract at a per-case price, and pays 20 to 30 percent as a down payment.”
“Then how much is that?”
Dad racked his brain, unable to calculate immediately. I, too, thought hard before answering.
“So… let’s calculate using the cheaper Pinot Noir price range. Around twelve to thirteen dollars per bottle is a low price at the daily wine tier, right? A wine case usually holds twelve bottles. So that’s about one hundred fifty dollars?”
“Right.”
“If we contract with one restaurant for fifty cases, that’s seven thousand five hundred dollars, and if we contract with ten places…”
“Seventy-five thousand dollars? If we receive 30 percent of that as a down payment, that’s twenty-two thousand five hundred dollars. Not bad?”
“Right? But that’s not all. Even if a lot of money comes in from the initial contracts, if we’re ever pressed for cash later, we can take out an inventory-secured ABL (Asset Backed Loan) using the barrels in the warehouse. At about 60 percent.”
Dad, who understood everything instantly thanks to his experience in business, lit up.
“Where would be good?”
He was asking which farm would be good.
“Anderson Valley and Sonoma County. Both are known for good Pinot Noir quality. But since they’re not daily wine grade, the initial cost is higher.”
“If the movie hits it big, wouldn’t a grade slightly above daily wine sell even better?”
“Of course.”
“Good. We can’t go like this; we need to prepare.”
“Prepare?”
“We can’t go looking like this. We have to dress up properly. Honey, I’ll wear it tomorrow, so please iron my suit. I need to go to the bank now.”
Dad dashed off distractedly, and Mom, left behind, stared blankly before suddenly turning to me.
“Hey, but if Pinot Noir is that good, what about ours? Is it bad?”
“Come on, Mom. That’s not it. In Napa Valley, Cabernet Sauvignon is usually around three thousand nine hundred dollars per ton, while Pinot Noir is around two thousand one hundred dollars. Ah, this is the spot price for the raw grapes, before making them into wine.”
Mom was startled, her eyes going wide.
“That’s almost double?”
“That’s why the previous owner, Mr. John Anderson, sold off even the slightly decent grapes. To think he went bankrupt with such a good farm. Tsk, tsk, tsk…”
“Exactly.”
“The fact that wine prices had been falling for years must have been a problem too.”
“Wine prices are falling? Why?”
“With everyone and their mother producing wine, wine prices had dropped significantly. The raw grapes are expensive for Cabernet, but the wine isn’t, you could say? Funny, isn’t it?”
“Then what about us? Do we have to keep selling vinegar?”
“Yes. Our farm has nothing to worry about. We’ve already secured a solid sales route with vinegar. And since we’ve grown the grapes with such care, we’ll age about half in barrels and wait for the right time. Cabernet Sauvignon originally increases in value as it matures.”
“Then is the Pinot Noir you and Dad want to buy different?”
“That’s a bit different.”
I smirked. After *Sideways* was released, Pinot Noir prices had surged 15 percent in the first year, and an additional 25 percent the following year compared to the previous year, bringing wealth to Pinot Noir wineries. So it inevitably had to be very different from Cabernet Sauvignon.
---
The next day, I went to school, used the excuse of being sick to finish only the morning classes, and immediately headed to the Russian River Valley in Sonoma County with Dad.
“The place we’re going to now is the best?”
“Pretty much.”
It wasn’t now, but later, after the movie *Sideways* came out and Americans began obsessing over Pinot Noir, the place that came to be recognized as the highest value was precisely the Pinot Noir of Russian River Valley.
“Why is that place the best? Is there a reason?”
“Good question. First, Pinot Noir needs a large diurnal temperature range. At least between 10 and 15 degrees. During the day, between 22 and 28 degrees is good. At night, 10 to 15 degrees is just right. If the daytime temperature is too high, the sugar content becomes excessive, which is bad.”
“Oho—”
“And Pinot Noir likes sea fog.”
“Sea fog?”
“Yes. Morning sea fog preserves acidity while suppressing the rise in sugar content. If sea breezes blow in on top of that, it’s the best. Considering topography and soil as well, Russian River Valley is counted among the world’s most optimal growing regions.”
“Wow… I see.”
Dad, who had been nodding along, asked again.
“But I was thinking, saving up money to increase equipment is one thing… but how do you plan to expand the farm? All the suitable land is already being used as farmland.”
“Of course, I don’t mean to buy idle land.”
“Then? Acquire existing farms? Like Redwood? Hey, is that easy? Redwood was a farm that came out because it fortunately went bankrupt. There won’t be many farms like that, will there?”
“You never know. What will happen…”
I knew. That in late 2004, a massive wildfire would sweep through California.