No other segment of the California agricultural economy is more fascinating than its wine and wine grape industry. It is an industry of sharp contrasts.
It is more art than science. There are as many opinions and perceptions as there grape growers and wineries.
It has given the world “Two-Buck Chuck” and California Cooler and Opus One and wine from Heitz Cellars' Martha's Vineyard.
It's an industry of survivors and insiders and of newcomers and wine aficionados who venture into the business to perpetuate their love for wine and more often than not lose millions in the process.
The wine business is more unpredictable than any other segment of California agriculture. Just about the time everyone thinks they know what they think consumers want, along comes Merlot varietal wines or White Zinfandel.
I love California wine and do as much as possible to support it. It's fun to dine with folks who ask you to recommend wine because “you're from California.” I am no wine expert. I am a redneck from Fresno who knows just enough about a wine list to fake it fairly well.
I have lost count of the times dinner partners have commented on my selections, “This is wonderful…what is the name of it? I am going to look for this when I go shopping for wine.” The wines I select are from regions and wineries I am familiar with. My selections are usually no-brainers. They are not expensive wines from off-beat, small wineries. They are usually from the biggest names in the business, yet more often than not are wines new to people who are wine drinkers.
The point is the California wine industry is still missing the bulls-eye in mass marketing wine to the general public. I have heard all the arguments against a commodity approach to promoting wine; wine is not a commodity and you cannot promote wine drinking because it is an alcoholic beverage and if you do that you'll just incite those who want to put a sin tax on wine. To that I say cork it.
If that is all true then why are imports, especially those from Australia, kicking the barrel staves out of American wines in America? Shipments of all wine into U.S. channels were up 4 percent last year, but two third of that increase were imported wines.
Imports now account for 25 percent of the market in the total U.S. market and almost two-thirds of the premium market. Imports are approaching the record of almost 26 percent of the U.S. market set in 1984.
Australia is at the head of the pack. Australian imports were up 51 percent last year. That should not be a surprise to anyone because 20 years ago Australians announced in the U.S. that they had initiated an aggressive wine grape expansion with the goal of vigorously marketing Australian wines worldwide, particularly in the U.S.
Admittedly, they are being helped along by the strong American dollar. Nevertheless, Australia has been successful largely because of a coordinated industry export with government support and tax incentives.
Unfortunately, California's wine industry can only sit and watch Australia takes away what should be its growth in U.S. wine consumption.