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Constellation Brands

Earthquake rattles, doesn't wreck Napa wineries

John Waggoner and Nancy Trejos
USA TODAY
Lucero Olive Oil shop manager David Gadlin sweeps broken bottles of balsamic vinegar and olive oil that crashed to the floor of his shop in downtown Napa, Calif., on Aug. 24. California's governor declared a state of emergency Sunday after a magnitude-6.0 earthquake.

Near the height of annual harvesting and tourist season, California's Napa Valley wineries were struck hard by Sunday's magnitude-6.0 earthquake, but many reported surprisingly light damage.

The early morning earthquake, whose epicenter was about 9 miles south of Napa, jolted residents and had winemakers scrambling to check their homes and businesses.

"It was a very violent awakening," says Sandy Taylor, co-founder of the Taylor Family Winery in Napa. "It seemed to shake a long time. Our dogs and cats bailed out."

Taylor says her winery, about a mile from the epicenter, lost one barrel of 2013 Chardonnay. "The finished bottles at the winery were fine, Taylor says. "The finished goods are in cases, boxed, palletized and shrink-wrapped," she says. "I think the shrink-wrap was what kept them safe."

At Silver Oak winery, about half a mile from the epicenter, three barrels were destroyed, CEO David Duncan says. The biggest loss was the winery's "reference bottles" – bottles of wine used to blend previous vintages. "They're completely irreplaceable," Duncan says.

Nevertheless, the winery's tasting room was open Sunday, running on generator power. A water main had to be repaired in the early morning.

Napa is home to nearly 800 wineries, which produced 49.7 million cases of wine in 2012, according to the Napa Valley Vintners, a trade association. The association puts the industry's U.S. economic impact at $50 billion, and an overall estimate of the damage from the quake couldn't be assessed Sunday.

James Cluer, owner of Fine Vintage and a winery consultant, says the earthquake hit when Napa draws the most visitors.

"This is the busiest time of year because the harvest is on," he says. "It's just started for whites, and reds are coming soon in two to six weeks. A lot of people come to Napa for September and October because it is harvest."

Many wineries tend to stack up their barrels for space reasons. A barrel typically holds 25 cases, or 300 bottles, of wine. Retail prices for Napa wines typically start at about $50. Any destruction of those barrels could have a severe financial impact on wineries, he says.

"Some wineries could be facing some fairly sizable financial damage," he says. "Hopefully, people aren't scared away from visiting Napa because what Napa needs most right now is for people to come and visit."

Wineries reported a high number of calls as tourists looked for open tastings post-quake. Meadowood Napa Valley Resort and its sister property Southbridge, both in St. Helena, are open for business, spokeswoman Jennifer Chiesa says.

"First and foremost, the safety and security of our guests, members and Meadowood staff are our highest priority," she says. "There is no damage to the property and no injuries to report at this time. We will continue to monitor the situation."

The facade of a building housing the Carpe Diem restaurant was damaged in downtown Napa, Calif., on Aug. 24.

Power outages shut down a few restaurants. Bouchon, a popular restaurant in Yountville, was open for business Sunday, but Ad Hoc, a family-style restaurant at the south end of town, was closed because of a power outage.

The Bardessono resort in Yountville, about 10 miles north of the quake's epicenter, reported no major damage and was open for business.

"We were 100% occupied and were fortunate to have no injuries. Both our guests and employees have reacted wonderfully," Jim Treadway, the general manager of the resort, wrote in an e-mail.

Hundreds of broken olive oil bottles littered the floor of Lucero Olive Oil in downtown Napa.

But that hasn't dampened the spirits of owner David Gadlin, who vowed to open the store on Monday. "A lot of downtown business owners will be back up and running," he said. "There's been financial hardship, but we'll get through it. Few people were hurt. That's what's important."

Californians seemed to roll with it. "It was crazy, but we just have to live with it," says Lacey Monje, who works at the Napa Valley Lodge in Yountville, which sustained no damage.

Still, after at least one picture of wine bottles piled on the floor at a Napa Valley winery was posted to Twitter early Sunday, investors in companies with wine assets could see some short-term volatility early this week as insurers assess possible earthquake damage to property or facilities.

Beverage giants Constellation Brands (STZ) and Diageo (DEO) have significant winery holdings in Northern California's Napa Valley region, close to the epicenter of Sunday's quake.

Constellation owns the Robert Mondavi, Clos du Bois, Estancia and Ravenswood labels and had wine sales of $586 million in its most recent quarter, about 38% of total spirits sales and 2% below a year earlier.

Diageo's owns Beaulieu Vineyards in Napa and Sterling Vineyards in the nearby town of Calistoga, while Brown-Forman (BF.A) is the owner of Korbel Champagnes – and a major supplier of oak barrels to the industry.

The official Visit Napa Valley Welcome Center was closed today but is likely to reopen Monday.

"The regions around Yountville, St. Helena and Calistoga seem to have experienced minimal damage and disruption," says Clay Gregory, president and CEO of Visit Napa Valley. "For travelers coming to the Napa Valley, most businesses are open as usual. However, we suggest calling first to confirm your plans."

Contributing: USA TODAY's John Shinal, Beth Weise and Jon Swartz

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