Despite being referred to as a ‘New World' wine, Ridge boasts an illustrious heritage. The Monte Bello Ridge is located in the Santa Cruz Mountains, an impressive 1300-2700 feet above sea level. With fertile limestone soils and the cool pacific breeze, this is perfect terroir to produce one of the world’s most ‘highly regarded’ Cabernets.

The first wine production in the Monte Bello Ridge dates back to 1885; however, it wasn’t until four Stanford research engineers bought the site in 1959 that the site’s vast potential was realised. The engineers' first release to the market was their 1960 quarter barrel of ‘estate’ cabernet, which, at the time, was lauded among California’s best wines.

Production continued to grow over the next decade to just under three thousand cases a year. It was at this stage the four Stanford employees enlisted the help of another Stanford alumni - wine maker Paul Draper.

Draper commandeered the additional purchase or lease of the finest vineyards in the surrounding area, and applied his ‘no hands’ approach to fine wines. This approach proved the backbone to one of the most famous wines of all time; the 1971 Ridge Vineyards Monte Bello Cabernet.

So, what makes this Ridge vintage so famous? Simple; The 1976 Judgment of Paris.
The 1976 Judgment of Paris was the first time ‘New World’ wines took on ‘Old World’ wines in their own back yard – and won. Stephen Spurrier, an English wine shop owner and educator based in Paris, assembled a line-up of Californian blends versus Bordeaux and Burgundies. Stephen invited the top French tasters at the time to conduct a blind taste test between the two flights. The unthinkable then happened: “California defeated all Gaul.”

The David and Goliath tasting was fully documented by Time magazine, propelling Californian wine to a new level of global notoriety. Needless to say, the French judges were unimpressed with the results, making bold claims that Californian wines may compete when young but lack the aging potential of their French counterparts. It was these defensive comments that put the wheels in motion for a second test 30 years later, a test which would put the 1971 Ridge Monte Bello front and centre.

On 24th May 2006, Stephen re-enacted the tasting of 1976, except this time orchestrating simultaneous tastings in both London and Napa. Paralleling the 1976 event, nine expert tasters at each location judged the original red wines, now over thirty years old. The unanimous winner on both sides of the Atlantic was the 1971 Ridge Montebello.

So, what is it about Ridge Monte Bello that makes it both a great wine and a great investment?

If we look at Ridge’s Wine Advocate score average over the last 5 reviewed vintages, the Monte Bello vineyard achieves an impressive 97 points. Attaining this high score is one thing, but maintaining it over a 5 year period while pioneering sustainable wine making puts Ridge Monte Bello in a class of its own.

Secondly, Ridge only release circa 12,000 x6 bottle cases each vintage. Allocation is limited and only granted to long term subscribers.

The Ridge brand also holds iconic status; from the industrial award-winning label which was first introduced in 1962, to the story of the four founding Stanford engineers, pioneering wine making techniques and of course the Judgement of Paris. The Monte Bello Cabernet has a ‘modern-day heritage’ to compete with the first growths

From a bottom-up investment perspective, Ridge Monte Bello is an obvious buy. However, when we look at Ridge from a more top-down environmental perspective, the long-term investment potential of this wine becomes really interesting.

In 2008, Ridge began the transition to bring their vineyard management techniques in line with their traditional winemaking practices. Part of this entailed making all their vineyards 100% certified organic, a feat they achieved in 2022. Ridge has also committed to achieve Carbon Net Zero by 2050, be at least 20% powered by on-site renewable energy, reduce 25% of CO2 emissions per unit of wine and complete a biannual greenhouse gas audit verified by an accredited third-party auditor.

As a result, Ridge has now become a candidate for Environmental, Social and Governance (ESG) investors. In accordance with ESG investing, Ridge abides by a set of standards which would attract investment from institutional funds whose investors demand their capital be allocated to socially and environmentally conscious assets. The demand for ESG qualifying investments are exponentially increasing as investors are now driven by both returns and sustainable investing. This sentiment is echoed by Larry Fink, CEO of the $10trillion asset manager Blackrock;

“Sustainable investments have now reached $4trillion. Actions and ambitions towards decarbonization have also increased. This is just the beginning – the tectonic shift towards sustainable investing is still accelerating. Whether it is capital being deployed into new ventures focused on energy innovation, or
capital transferring from traditional indexes into more customised portfolios and products, we will see more money in motion.”

Just like Blackrock, another large institution fully committed to ESG investing is Norges Bank. The $1.4trillion sovereign wealth fund has set the target of full portfolio carbon neutrality by 2050. The fund will divest from companies with “unmitigated climate risks, especially where engagement has failed or is unlikely to succeed.” From a sovereign wealth fund that initially generated its AUM from North Sea Oil, this is a massive step that further highlights the changing demands of their stakeholders, requiring their capital to be allocated into investments that are both socially and environmentally conscious. The demand for environmentally sound assets is growing!

We understand why large institutions would want to diversify into fine wine, lower their systemic risk while satisfying their increased requirement to find ESG investments, but surely any of the top investment vineyards can emulate Ridge’s ESG credentials? Unfortunately, not necessarily. Let’s take Ridge’s 100% organic viticulture: Ridge’s Monte Bello site is rare in that it naturally helps reduce the requirement for pesticides due to its high altitude, and the cool Pacific breeze which naturally kills most fungal infections. This is not to discredit Ridge’s organic farming practices such as cover crops, utilising hedgerows, integrated pest management and promoting bird populations; however, other low lying, inland vineyards have fully utilised these methods and still require chemicals. It is the culmination of all these factors which makes Ridge so special.

Other fine wines without Ridge’s terroir advantages, can attain net carbon zero status through the implementation of technology. Take for example the Thorvald, a robot with large UV lights designed to kill fungal diseases. The efficacy of this technology is high but so too is the cost. This additional expenditure drives up the primary market price of the wine due to the technology being expensive but also higher energy costs, as the use of these technologies increase the vineyards carbon footprint which will need to be offset using other expensive activities such as tree planting, increased renewable power or water conservation if the goal is to be net carbon zero. This unfortunately contradicts the investment adage of 'Buy Low and Sell High'. Ridge clearly has an inherent natural advantage when it comes to sustainability, and its head start to reach net carbon zero. It is these unique footholds that institutional investors look to take advantage of particularly when paired with solid fundamentals in quality, scarcity and brand.

There are many parallels between Ridge - the wine, and Ridge - the investment. As with the Judgement of Paris, Ridge has all the ‘old school’ attributes of traditional fine wine whilst also having the unique ESG USPs to appeal to the ‘new school’ investor. As we have discussed, institutional demand for ESG qualified investments grows as their net carbon neutral deadlines loom. Simultaneously we are seeing more institutional investment into fine wine as the market both matures and self regulates. This a long-term view; however, the potential upside for wines with comparative advantages like Ridge Monte Bello are large and, as we know from the Judgement of Paris, Ridge drinks well for over 30 years.