What is in this article?:
- California winemakers are predicting that business will revive within three years from a slump that began in 2007.
- Concerns: coming years will bring tax increases; water shortages for wineries; domestic grape shortages; and lower prices on imported grapes.
- Wine executives are looking forward to a groundswell in consumption from the Millennial Generation.
Survey of wine executives
Smiley's ninth annual wine executives survey tapped the opinions of the heads of 26 key wine operations. Most of the survey respondents represented wine companies; others were from firms that ranged from grape growing to wine-distribution operations. The responding executives said they anticipate that pending legislation, particularly bills aimed at curbing direct sales of wine to consumers, will be among the industry’s major “hot issues” for the next five to 10 years.
Results of both surveys are available online at: http://www.gsm.ucdavis.edu/2010winestudy.
“Legislation supported by wine distributors is pending in several states that would make it more difficult for consumers to purchase wine directly from the producers,” Smiley said.
He noted that the wine executives surveyed also were concerned that the coming years will bring tax increases; water shortages for wineries; domestic grape shortages; and lower prices on imported grapes, which will make it unprofitable for domestic growers to expand their plantings.
“The wineries were encouraged by an uptick in sales during the past year, however their optimism was tempered by the fact that many of those sales increases were achieved by cutting prices,” Smiley said.
He noted that many wine executives are looking forward to a groundswell in consumption from the Millennial Generation. This group of consumers — also referred to as Generation Y — is roughly composed of individuals born between the mid-1970s and the early 2000s.
“The Millennial Generation is very important, because their predecessors in Generation X have not been particularly fond of wine,” Smiley said. “Wine industry executives are hopeful that this new generation, which first learned an appreciation of flavors and place-of-origin as recreational coffee drinkers, will transfer that appreciation to wines,” he noted.