Nurseries Monitor Economy, Buy Local Trend

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. “We did about half the production that we would normally do,” he says. “We 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.” Regrafting helped the nursery achieve significant cost savings. “But I guess time will tell if that was a smart move or not,” he says.

Trading Down = Pent Up Demand?

While things may be looking bleak for high-end wines right now, the current economic situation could prove to be a boon to that industry in the future. “Everyone’s trading down, but when we get past this economic hiccup, I think there’s going to be pent up demand again for premium-quality grapes, and people will start planting again,” says Ernie Bowman of Kendall-Jackson Nursery. And that’s not the only positive sign. “You look at all the demographics, and wine consumption is continuing to go up. It seems that more younger people are now drinking wine, so I think the demographics are good, and so I’m optimistic about the future,” he adds. “I think it’s going to take us a couple of years to get back, but I think once we do, the pent up demand is going to be there and the business will be healthy again.”

Bowman believes that if there’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. “You have land cost and then you’ve got development cost of vineyards, and that dictates that you’ve got to get a certain level of pricing for that fruit to make it all economically pencil out,” Bowman says. In lower cost areas, however, growers can produce fruit for a dollar value per ton that makes it easier to stay profitable.

Quality Sells

Since it’s difficult to predict consumers’ behavior, determining what grapes to plant can be tricky. It’s market driven, and in many ways, reactionary. “Five years ago, Pinot Noir was really somewhat of a minor variety,” Bowman says. “But with the advent of ‘Sideways,’ 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 don’t know.”

Bowman says the biggest opportunity growers have to shine is from a quality standpoint. “I think quality always sells,” he says. “I 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 you’re planting is the right variety and rootstock for that site to give yourself a chance to grow the best fruit you can.”

John Duarte of Duarte Nurseries in Hughson, CA, is quick to point out that low-price imports also are affecting U.S. grape growers. “Where everyone was expecting Chardonnay, for example, to become more demanded by now, there’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 aren’t in demand,” he says. “So there’s not a lot of Chardonnay planting, and I think a lot of us would’ve predicted Chardonnay would be short in California right now.”

Love The Locavores

The economy isn’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. “We have what I would call a growing direct market industry in the East, and that’s roadside markets and farmers markets,” says Phil Baugher of Adams County Nursery in Aspers, PA. This has resulted in growers — particularly smaller ones — diversifying into a more mixed crop portfolio, he adds. “Where they used to be just tree fruit growers, they’re now diversifying into blueberries, strawberries — small fruits, and some vegetables, to respond to the growth in the demand for locally grown produce,” he says. “That has affected us in what we’re doing here at the nursery.”

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. “We used to grow primarily peaches in stone fruits, and now we grow a lot of white flesh peaches, nectarines, and donut peaches,” 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.

“We continue to see growth in the direct market, buy local trend,” Baugher adds. “I’ve seen some statistics that there’s about 10% annual growth in the direct farmer to consumer market.”

It’s hard to pinpoint what exactly led to this shift in consumer behavior, but Baugher thinks it might have something to do with shoppers’ disenchantment with big supermarkets and megachains. “This is just the pendulum swinging the other way,” he says. “People 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.”

Leave a Reply

Featured Stories

All Vegetables Stories >All Fruits Stories >All Nuts Stories >All Citrus Stories >

The Latest

CitrusMajor Florida Citrus Planting Incentive Program Announc…
September 23, 2014
Citrus World Inc. plans to invest $10 million to encourage new acreage. Read More
Insect & Disease UpdatePositive Attitudes Promote Citrus Planting
September 23, 2014
Improving management methods gives growers confidence in the future. Read More
CitrusNational Farmers Union Submits Comments On Clean Water …
September 23, 2014
Organization urges other industry groups to submit constructive comments. Read More
GenNext GrowersAnnouncing The GenNext Growers Webcast Series
September 23, 2014
This series will present strategies and tips to make your voice heard and count when speaking to legislators. Read More
VegetablesViability On The Menu For Long-Term Vegetable Market O…
September 23, 2014
Economic recovery favorable for climbing consumption trends. Read More
CitrusLuke Bryan Pays It Forward For Farming
September 23, 2014
Country superstar honors agriculture with his Farm Tour. Read More
IrrigationFlorida Growers Seize Control Of Water Challenges
September 22, 2014
New irrigation projects and fertilizer practices have tremendous potential for protecting resources, while enhancing productivity. Read More
CitrusNew Superhero Aims To Save Florida Citrus
September 22, 2014
Unique marketing partnership comes to life through comics. Read More
Apples & PearsKasumin Now Registered For Fire Blight Control
September 22, 2014
EPA approves use of bactericide on pome fruit as disease management tool. Read More
Food SafetyUSDA Issues Updates To Food Safety Modernization Act
September 19, 2014
Water testing, definition of applicable farms based on produce sales among clarifications to proposed rules. Read More
GrapesThird Straight Record Crop For Washington Grapes
September 19, 2014
Numbers expected to climb as more vines planted in the state. Read More
GrapesFrench Winegrowers Face Higher Labor Costs
September 19, 2014
French wineries may come under added financial pressure as the government considers imposing social charges on wages paid to harvest workers with short-term contracts. Read More
IrrigationCalifornia Boosts Local Water Control
September 19, 2014
Governor Jerry Brown signs historic legislation to strengthen local management and monitoring of critical groundwater basins. Read More
VegetablesSakata Seed America Shows Heart Through Charitable Prog…
September 19, 2014
Company’s corporate giving mission bears fruit for the American Heart Association. Read More
Insect & Disease UpdateAdditional Aid Coming For Florida Citrus Growers Gouged…
September 17, 2014
Through USDA’s Tree Assistance Program, eligible growers can cash in on cost share for diseased tree removal and replanting. Read More
FruitsFlorida Fruit & Vegetable Association Seeks Fresh A…
September 17, 2014
New partnership bolsters Fresh From Florida program. Read More
CitrusFDA Announces Cooperative Agreement To Implement Nation…
September 17, 2014
Agreement will provide information to help plan and carry out the produce safety rule in partnership with state regulatory agencies. Read More
NutsAchieving A Super-Premium Walnut Crop
September 17, 2014
What are the best ways to get high quality walnuts that are light in color and fully developed? Read these 8 harvest best practices to find out. Read More