Winegrape Industry Prospects Look Promising
January 26, 2011 Winegrape business experts predicted steady growth in the near future at Wednesday’s annual State of the Industry presentation at the Unified Wine & Grape Symposium. Held each year in Sacramento, CA, by the California Association of Winegrape Growers and the American Society of Enology and Viticulture, the symposium provides a look at both wine sales and consumer behavior.
On the consumer front, The Nielsen Company’s Danny Brager said he expected wine sales to fare well for the next few years, with single-digit growth expected in part because of “millenials.” Also known as “Generation Y,” they are people in the 21 to 33 age group. “Millenials are providing wine and spirits a strong tail wind,” he said. Consumer confidence is growing overall in the wake of the Great Recession, he said, but the types of wines in demand are changing. Prior to the recession, “premiumization,” or the consumption of high-dollar wines, was the buzzword. But the company’s recent surveys show that 20% of core wine drinkers said that even when the economy fully turns around, they will still seek out value wines.
Another trend is that domestic wines are performing better than imports across the board, said Brager, with sales of wines from Australia and France, in particular, struggling.
As far as varieties, Syrah/Shiraz, Merlot, and White Zinfandel are down. In contrast, sales of Pinot Noir and Riesling are way up, and Moscato and Malbec are “on fire.”
Nursery Trends
The 2010 California crop, overall, was down 14% from the previous year. That should benefit most growers as the industry comes into harmony, said Nat DiBuduo, president of Allied Grape Growers. “That’s a good sign, I’m really upbeat,” he said. “The downward swing in production, coupled with increasing wine shipments, could go a long way to re-establishing overall market balance.”
DiBuduo shared the results of Allied’s annual nursery survey, which showed that 14,000 to 17,000 acres were planted in the state in 2010, with red winegrape varieties dominating plantings, at 65% of the total. He also gave brief summaries of the prospects for certain varieties:
Chardonnay — Large crops could be problematic.
Pinot Grigio — The market capacity is unknown, and there is the possibility that it will be “cannibalizing” sales of other white varieties.
Muscat — It’s hot, with large plantings in the San Joaquin Valley. “If it’s a fad,” he said, “we’re in trouble.”
Cabernet Sauvignon — Continue to plant cautiously.
Merlot — Not much action right now. “We’re likely to see a stronger market in the future.”
Pinot Noir — Planting is slowing, but 18% of the acreage is still nonbearing.
Rubired — Sales exploded the past couple years, and 26% of the acreage is still nonbearing. It was mostly planted on contract, he noted.
Zinfandel — Not much going on, and it doesn’t look like there will be much growth, except perhaps for the Napa region.
Grower Of The Year
DiBuduo also announced the first-ever “Grower of the Year” award. It went to Vino Farms, which is owned by the Ledbetter family, who are headquartered in the Lodi area. They now farm in many parts of the state, with 13,000 total acres. DiBuduo said the family is known for many achievements, including their deep commitment to sustainability, noting they were instrumental in launching the “Lodi Rules.” Keith Ledbetter first planted winegrapes in Lodi in the 1970s. The next generation of ownership was John and Jim, while the current generation consists of Marissa Ledbetter, Craig Ledbetter, and Kim Ledbetter-Bronson, who is also chair of the California Association of Winegrape Growers.
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