Every facet of the wine and grape industry, from science and technology to trends and markets, was examined and discussed during the last week of January at the 25th Unified Wine & Grape Symposium (Unified) in Sacramento, CA.
The largest wine and grape trade show of its kind in the Western Hemisphere, Unified drew thousands of industry professionals from all over the world eager to hear about the impact of regulatory changes, trends, technology, research, and issues shaping their business decisions.
State of the Industry
The annual State of the Industry presentation was moderated by Mike Veseth, The Wine Economist. He noted some troubling trends in the global industry, such as the fact that the worldwide harvest in 2017 was the smallest in a half-century, but it did not lead to great shortages. In addition, the global industry didn’t take part in the economic expansion following the onset of the 2008 recession, as sales have been basically flat since.
“When the economy recovered, global wine consumption did not,” Veseth said. “I call it the lost decade in global wine.”
The Nielsen Company’s Danny Brager also emphasized that worldwide per capita wine consumption — indeed, all alcohol consumption ―was not going up, and population growth in markets that traditionally consume the most wine is also flat. The pie is not getting bigger.
“It’s a battle — no, a war — for share,” he said. “And now you’ve got cannabis looking over your shoulder.”
Presented by the American Society for Enology and Viticulture (ASEV) and the California Association of Winegrape Growers (CAWG), Unified’ s comprehensive format responds to the wine and grape industry’s critical need for information, discussion and connections.
“If you want to understand what’s happening in the industry and how to stay competitive, Unified is the place to be,” said John Aguirre, CAWG president. “Unified draws nearly 14,000 from all over the globe, including exhibitors from nearly 30 countries. For 25 years, Unified is where industry leaders and professionals meet to discuss the latest news and share strategies for staying abreast of changing markets, technologies and regulations.”
Going to Pot
Cannabis was a frequent topic of conversation among Unified attendees. Another panelist, Marissa Lange, Lane Twins Family Winery and Vineyards, noted large wine companies seem to be hedging their bets with cannabis investments. Lange noted that most recently, Constellation Brands, which has such labels as Robert Mondavi, Wild Horse, and Clos du Bois, invested $4 billion in Canada’s largest cannabis grower, Canopy Growth, and now have a 38% share of the company.
Lange, a fifth-generation grower in Lodi, CA, said that at the same time, growers face skyrocketing costs. She said the per-acre operating cost in her area for growing ‘Cabernet Sauvignon’ have gone from just over $1,000 in 1997 to $12,500 today.
“By 2022, a grower will need upwards of 15% more per ton to remain at margin parity with today’s prices,” she said, adding that growers need to step up and promote wine sales, lending authenticity to the brands.
No doubt California growers face challenges in the years ahead, said Jeff Bitter, president of Allied Grape Growers, a grower-owned wine grape marketing association representing roughly 500 independent growers. But it’s nothing they can’t handle.
“Don’t lose perspective, overall the wine industry is very stable, more so than in other areas of agriculture,” he said.
Bitter released the results of Allied’s annual nursery survey, which revealed that 22 million vines were sold in the state in 2018, the most since 2014. Bitter said he was surprised at the number, but that was likely because the sales were largely driven by wineries, not the grower community. The surprising number of vine sales will be offset by pull-outs in the coming years, he said, as well as a decline in sales this year.
“I don’t see many people planting in this environment,” he said.
Bitter said there are now 591,000 acres of bearing wine grapes in the state, a figure that he forecast will rise only slightly, to 594,000 acres, by 2021. He showed a video of a harvester going through a vineyard, but with no gondola, because there was no market for the grapes, and the grower had to harvest to maintain vine health. But he emphasized it was not time for growers to stop planting.
“It’s time to dig up non-performing vineyards, that’s the message today. It’s time to get these older vineyards out of the ground that have probably only survived because the market has allowed them to survive the last few years,” he said. “If you’re in the audience and you have a vineyard you think you have to dig up in the next year or two because of a virus or it’s just not producing anymore, take my advice and dig it up now.”
Lohr Wins Award
Also at Unified, the third annual Rich Smith Distinguished Service Award for major contributions to the American grape and wine industry, and to research, was given to Jerry Lohr of J. Lohr Vineyards and Wines. Lohr has committed nearly 50 years of leadership and achievement to the wine industry.
The award was presented to Lohr today at the annual Leadership Luncheon of the Winegrape Growers of America (WGA), which co-sponsors the award with the National Grape Research Alliance (NGRA) and WineAmerica. The late Richard “Rich” Smith was a tireless leader and advocate for each of the three organizations.