From the Symposium, A Brighter Outlook

As I headed over to the Hyatt Regency Sacramento one morning this past week I ran into one of my favorite midtown characters.

“Where are you going, Mr. Dunne?” he asked.

I told him my destination was the all-important “state of the industry” presentation at the Unified Wine & Grape Symposium, the nation’s largest gathering of folks growing grapes and making wine.

“Please give my condolences to the wine trade,” he said.

Oh?

“There needs to be a Super Fund to help flip vineyards and wineries to more vital agricultural uses,” he explained.

Super Fund. Toxic waste.

Is the image of wine and the wine business that negative?

Hardly. His perspective was colored by an aversion to alcohol. Yet, he is on to something, according to much of the reporting on the wine business leading up to the symposium. The industry’s outlook is grim, as numerous studies, surveys and analyses have pointed out in recent days. Their conclusions were iterated by speakers and panels throughout the symposium itself.

In brief, wine sales in the U.S. are static, up for pricier wines but down for less-expensive wines, long the foundation of California’s wine trade. Vintners are especially concerned that younger people and ethnic minorities aren’t taking to wine, with “non-Hispanic whites” who account for most wine sales about to be outnumbered by ethnic minorities.

And, yet, there is this: The symposium itself, which drew about 12,000 attendees, reaching pre-

pandemic levels, and a record high number of suppliers, around 875. What’s more, my random sampling of suppliers found far more optimism than pessimism. Farmers may not have been popping on the premises for massive mechanical grape harvesters that can cost up to $800,000, but they were getting quotes on all sorts of other grape-growing and winemaking gear, from bird nets to barrels. By and large, suppliers expressed more relief about supply-chain issues being resolved than concern about a dip in wine sales, which many had been through before.

“I’m very bullish,” said Jamie Warm, a realtor with Kerry Mormann & Associates of Montecito, which specializes in the sale of vineyards and wineries whose owners don’t have a succession plan. “We’re constantly selling to international buyers, corporate buyers, people making investment and lifestyle decisions. We are growing quite a bit.”

Aside from a generally upbeat attitude at the symposium, tempered here and there by some apprehension about what could unfold in the wine trade this year, here are some surprises that also speak to a positive outlook:

• The number of wineries in the U.S. continues to grow, from 7,658 in 2013 to 11,691 today, and that growth has been constant.
• Inflation has had less impact on retail wine prices than on the cost of other alcoholic beverages – up 3.9 percent for wine, 8.6 percent for beer, 5.8 percent for spirits. The cost for non-alcoholic beverages are up 12.6 percent.
• There was much talk about how younger people are shunning alcohol, but the proportion of people younger than 25 who say they abstain (45 percent) isn’t much higher than the portion of people 70 and older who abstain (37 percent).
• California is the fourth largest producer of wine grapes in the world, accounting for 3.33 million
  

  Alessandro Paci and Letizia Zuccou of the Italian barrel maker Garbellotto are all smiles after selling this 1000-liter French-oak cask for $6,600.

  metric tonnes in 2022, up between 1 percent and 5 percent over 2021. Italy led global wine production with 6.98 million metric tonnes last year, but its growth is flat. France was second with 6.14 million metric tonnes, up a startling 17 percent last year. Spain was third with 6 million metric tonnes.

• Federal officials have indicated they will revisit this year an issue that has been lingering in the background of nation’s wine trade for the past two decades – ingredient labels. While a handful of vintners voluntarily long have included information concerning winemaking methods and nutritional data on labels, most don’t. They could be moving toward acceptance, however, given that younger potential wine drinkers say that kind of transparent data could influence their purchasing decisions. It already looks to have worked for other beverages.
• Nearly two of five Americans who drink alcohol say they are cutting down their consumption, in large part for their well-being. Expect, then, more lower-alcohol or non-alcohol wines to enter the market before long. These kinds of wine products have been tried before, and a few non-alcohol wines endure, but the industry looks like it is poised to attempt to upgrade seriously the quality of lower-alcohol and non-alcohol wines. Also, expect more wineries to emulate the non-alcohol varietal grape juices exploited so successfully and so long by Navarro Vineyards of Mendocino County.
• Ever heard of a beverage called “High Noon?” I only ever associated that name with the movie. (An aside: When Gary Cooper was filming “High Noon” in and about Columbia in Tuolumne County, my father secured from him for me his autograph while we all were eating in a Sonora restaurant. Over the years, sorry to say, that napkin disappeared.) Anyway, today’s “High Noon” is the country’s best-selling “ready to drink” spirit, an extremely crowded and competitive field. Though not a wine, it’s made by the nation’s largest winery, E&J Gallo. “High Noon” is a hard seltzer made with vodka and fruit juice in several flavors, such as watermelon and pineapple. As other ready-to-drink beverages generally, it comes in a can. I’ve never tasted it, but marketing could account for the beverage’s popularity as much if flavor, if not more. That marketing is heavy on alerting consumers that “High Noon” packs 100 calories to the serving, has no sugar added and is gluten free, just the sort of messaging that speaker after speaker at Unified urged the wine trade to adopt. (Overall, however, hard-seltzer sales are falling, but ever-adaptable Gallo has been down this road before, jettisoning innovative products as fast as it introduced them. Remember Ripple? Bartles & Jaymes? Get your “High Noon” while you can.)
• By and large, California’s share of the table-wine market is expanding for just about every varietal and style. At first glance, the exceptions are startling – sparkling wine and rosé, both of which have been immensely popular in recent years. And overall, both segments still do well, but this past year California sparkling wines, despite offering the best buys on the market for character, quality and value, lost ground to Italy’s Prosecco, while California’s pink wines didn’t keep pace with the stable popularity of blush wines from Provence.
• Nearly two dozen associations representing regional wine areas about the nation poured samples of their wines during a walk-around tasting that concluded one day of the symposium. This was a record-high turnout. More to the point, just a few tastes of what was being sampled confirmed how winemaking in areas beyond California – we’re talking Ohio, Idaho, Virginia, Illinois, New Mexico – is both expanding and kicking up its game. To me, the most impressive “import” was the Galena Cellars Illinois “The Secret Garden” Viognier ($18), a fresh, spirited and balanced take on the varietal, with dry, pinpoint suggestions of peach. It wasn’t as viscous as Viognier often is, but that gave it a fetching leanness that played to its spot-on acidity. The grapes were grown in the Shawnee Hills of southern Illinois. The character and quality of the wine could be attributed to that place, though I am starting to think that Viognier is an unusually adaptable grape variety that can turn out exhilarating wines wherever it is grown.
• Sauvignon Blanc is having its moment. It is the only varietal wine showing growth in sales across three principal price niches – under $11, $11-$15, and $15 and above. California wine-grape acreage grew by between 16,000 and 18,000 acres last year, and much of that new cultivation was Sauvignon Blanc.

 

If I were to run into my midtown friend on my walk home from Unified those are the kinds of things I would tell him, which taken as a whole indicate that the wine trade is in no need of a Super Fund to transition into some other agrarian business. The wine trade has its issues, but for meeting shifts in demographics, economics, culture, taste and the like it has shown itself to be imaginative and flexible, and that willingness to adapt creatively coursed through much of the discussion in Sacramento this week.