[The Fountain] A butterfly effect from Silicon and Napa Valleys

This is an era when the SVB collapse can cause Korean wine aficionados to close their wallets across the Pacific.

WIE MOON-HEEThe author is a national team reporter for the JoongAng Ilbo. The University of California, Davis, is located near Napa Valley, a world-class wine-producing region. The university has been researching grape cultivation and winemaking since the 1880s.

A classification table has been created by categorizing grape-growing regions in California, climates and grape varieties. The New World wines, most notably American wines, are characterized by scientific approaches.

Winery tours and blind tasting are also contributing factors to the development of the American wine industry. Robert Mondavi, called the “father of Napa Valley wines,” made a mark in the history of American wine with a reinterpretation of the traditional Bordeaux variety of Cabernet Sauvignon in a Californian style. Mondavi is also the first to commercialize a winery tour as a tourist attraction.

The Judgment of Paris is an event always mentioned when talking about the prestige of American wines. In 1976, a British wine trader Steven Spurrier hosted a blind wine tasting in Paris. Nine of the eleven judges were French.

But California wines were ranked first in both red and white varieties. It was the moment that the myth that good wine always comes from Europe was shattered.

The American wine industry, which now has established itself as the main player in the global wine market, is closely looking at the Silicon Valley Bank (SVB) crisis, which went bankrupt in March.

SVB created a wine business center in 1994 and attracted more than 400 wineries in Napa Valley as loan clients. SVB is a bank specializing in working with start-ups and tech companies in Silicon Valley.

Start-ups that raised sufficient funds from outside made deposits with SVB but did not take loans from the bank. It is no coincidence that SVB turned to Napa Valley, an hour’s drive from San Francisco.

First Citizens, a North Carolina lender, is taking over SVB. What attracts attention is how the buyer would handle the winery loans. Some predict that the wineries with greater debt burdens may raise the wine price.

The butterfly effect refers to a slight flap of a butterfly causing a typhoon on the other side of the world. This is an era when the SVB collapse can cause Korean wine aficionados to close their wallets across the Pacific.