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High-end wineries gain cult status

On a warm October afternoon, a steel-framed concrete warehouse north of San Francisco is inundated with grapes. Forklifts bearing fruit from the nearby Russian River Valley deliver their loads to a slow-moving conveyor belt. Flanking both sides, winemaking interns pick out stems and sunburned grapes as they groove to hip-hop music thumping from loudspeakers.

It's the crush at Kosta Browne Winery, a Sonoma County-based maker of pinot noir that's become one of the hottest wineries among investment bankers, venture capitalists and enthusiasts, Bloomberg Markets magazine reports in its February issue. Michael Browne, Kosta Browne's co-founder and winemaker, grabs a cluster from a tub and eats some of the grapes. They burst with berry flavor, and the seeds are nutty, not bitter.

"They're popping; they're ripe," shouts Browne, 42. "They're beautiful."

William Price, a co-founder of buyout firm TPG Capital in Fort Worth, Texas, would be happy to hear that. Price, whose Vincraft Group owns a majority stake in Kosta Browne, is one of a number of investors betting on the next generation of California cult-wine makers.

These ultra-premium wineries shun retailers and make it hard to buy their wines, spurring a following through word of mouth. Cult pioneers -- Colgin Cellars, Harlan Estate and Screaming Eagle -- reshaped the economics of the high-end market by fetching Bordeaux-caliber prices at auction.

The new crop of wineries is now reaching for cult status in an industry where it can take decades to turn a profit. For years, Browne and his partner, Dan Kosta, scraped together money every harvest to buy grapes and lease space and equipment at nearby wineries to make their pinot.

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