In an economy where every penny counts, luxuries like high-end wine are taking a backseat to necessities, and justifiably so, even winegrape growers will admit. The real story, though, is how nurseries and growers are adapting to changes like these, and where the opportunities lie.
Ernie Bowman of Kendall-Jackson Nursery in Santa Rosa, CA, says sales volume is down about 50% this year over last, and he anticipates 2010 being an equally challenging year. â€œWe did about half the production that we would normally do,â€� he says. â€œWe had a lot of dormant vine inventory left at the end of the season, so we ended up replanting a lot of dormant vines from this year for next year.â€� Regrafting helped the nursery achieve significant cost savings. â€œBut I guess time will tell if that was a smart move or not,â€� he says.
Bowman believes that if thereâ€™s going to be any vineyard expansion in the next couple of years, it likely will be in the central valley from Lodi down to Fresno, where land costs less. Many of the major plantings in California in the past 10 years have been primarily coastal, he says, where the price of land is an issue. â€œYou have land cost and then youâ€™ve got development cost of vineyards, and that dictates that youâ€™ve got to get a certain level of pricing for that fruit to make it all economically pencil out,â€� Bowman says. In lower cost areas, however, growers can produce fruit for a dollar value per ton that makes it easier to stay profitable.
Since itâ€™s difficult to predict consumersâ€™ behavior, determining what grapes to plant can be tricky. Itâ€™s market driven, and in many ways, reactionary. â€œFive years ago, Pinot Noir was really somewhat of a minor variety,â€� Bowman says. â€œBut with the advent of â€˜Sideways,â€™ all of a sudden the focus really became on Pinot Noir, and in the last five years, California has probably planted more Pinot Noir than they had planted previous to that, so there are a lot of non-bearing acres of Pinot Noir. Will that trend continue? I donâ€™t know.â€�
Bowman says the biggest opportunity growers have to shine is from a quality standpoint. â€œI think quality always sells,â€� he says. â€œI think what growers have to do is figure out what the best variety for their site is and grow the best quality fruit they can. So a lot of it is doing due diligence and making sure that what youâ€™re planting is the right variety and rootstock for that site to give yourself a chance to grow the best fruit you can.â€�
John Duarte of Duarte Nurseries in Hughson, CA, is quick to point out that low-price imports also are affecting U.S. grape growers. â€œWhere everyone was expecting Chardonnay, for example, to become more demanded by now, thereâ€™s so much bulk Chardonnay being hauled in from Australia at low prices that a lot of Chardonnay growers are surprised to see their crops arenâ€™t in demand,â€� he says. â€œSo thereâ€™s not a lot of Chardonnay planting, and I think a lot of us wouldâ€™ve predicted Chardonnay would be short in California right now.â€�
Love The Locavores
The economy isnâ€™t the only factor affecting growers and nurseries this year. The burgeoning buy local movement is making many growers rethink what they should grow and who they target. â€œWe have what I would call a growing direct market industry in the East, and thatâ€™s roadside markets and farmers markets,â€� says Phil Baugher of Adams County Nursery in Aspers, PA. This has resulted in growers â€” particularly smaller ones â€” diversifying into a more mixed crop portfolio, he adds. â€œWhere they used to be just tree fruit growers, theyâ€™re now diversifying into blueberries, strawberries â€” small fruits, and some vegetables, to respond to the growth in the demand for locally grown produce,â€� he says. â€œThat has affected us in what weâ€™re doing here at the nursery.â€�
Baugher adds that for some Eastern growers, maintaining a more local focus is easier than trying to compete with California peaches and Washington cherries in the wholesale market. The nursery has been adapting with the changes, but Baugher says the transition has been over time. â€œWe used to grow primarily peaches in stone fruits, and now we grow a lot of white flesh peaches, nectarines, and donut peaches,â€� he notes. The nursery has had to broaden its selection, as peach growers who used to grow six or seven varieties for wholesale are now growing upwards of 40 varieties for retail, and a mix of different types of stone fruits, as well.
â€œWe continue to see growth in the direct market, buy local trend,â€� Baugher adds. â€œIâ€™ve seen some statistics that thereâ€™s about 10% annual growth in the direct farmer to consumer market.â€�
Itâ€™s hard to pinpoint what exactly led to this shift in consumer behavior, but Baugher thinks it might have something to do with shoppersâ€™ disenchantment with big supermarkets and megachains. â€œThis is just the pendulum swinging the other way,â€� he says. â€œPeople want to connect with the person that produces their food. The majority of the produce is still sold by the major retailers, but many growers on the East coast are turning to this direct market opportunity as a way to redefine themselves.â€�