It is the oldest joke in the California wine grape business, yet it continues to be told at industry gatherings as surely as there is a wine bottle or two in need of emptying.
It’s the one that goes: “How do you make a small fortune in the wine business? Start with a large fortune.”
It received the perfunctory chuckle in Paso Robles, Calif., at the Central Coast VINE Symposium hosted by Precision Ag, Inc., a coastal vineyard consulting company.
In the wake of a 4-million ton 2009 California grape crush (3.7 million wine grapes) that filled winery tanks; a recession that is hurting wine sales, especially bottles in the premium price range; and a continual flow of imports cutting into California grower deliveries and prices, no one is particularly optimistic about the 2010 season.
The much anticipated symposium presentation by Justin Vineyard and Winery owner Justin Baldwin of Paso Robles and wine grape buyer Stasi Seay of Diageo Chateau and Estate Wines, also based in Paso Robles, offered no reason to change the dim outlook for this season.
Baldwin is a veteran 30-year wine buyer who purchases 1,500 to 1,700 tons yearly from about 28 growers. Seay buys wine grapes from producers to be used in eight different brands ranging in sales size from 50,000 to 1 million cases annually. Her territory is from Gilroy to Santa Ynez.
They offered no glimmer of hope for 2010 coastal wine grape demand or improved prices and not much insight into what they will be buying in 2010, aside from Baldwin’s mild interest in Pinot Grigio.
Baldwin begged for winery empathy from growers. The winery business has been tough, he said, with a sharp decline in premium/high value wine sales. He said he has not raised his wine prices this year.
It is going to be another tough year ahead, Seay chimed in.
What Seay and Baldwin had to offer was no surprise to the more than 150 growers, vintners and consultants attending the symposium.
Steve Thompson, owner of the 32-acre Coyote Moon Vineyard in the Paso Robles area, considers himself fortunate to have sold his grapes from his 32 acres of Cabernet Sauvignon, Petite Syrah, and Sauvignon Blanc last season.
While his Petite Syrah was in demand, it was tough finding a home for his Cabernet Sauvignon and Sauvignon Blanc. He watched as winery prices slowly collapsed from April to fall harvest in 2009. He sold his grapes, but did not make a profit.
For frustrated grower John Crother, another San Luis Obispo County wine grape grower, the solution may be to simply drop a crop on the ground for a year, take a reduced loss and hope 2011 will be better.
It is doubtful many would do that. So how do growers convince winery buyers like Seay and Baldwin to buy their grapes?
Both said it is about being proactive in producing grapes wineries want. What works best, Baldwin said, is a “personal relationship with growers who understand what I am looking for.”
Baldwin told growers to avoid the expense of making wine to convince a winery to buy your grapes. Correct growing practices are more important than a bottle of wine since winemaking practices differ among wineries.
The roles of vineyard consultants and managers are critical to providing the grapes Baldwin will buy.
Seay agreed with Baldwin. She spends plenty of time in vineyards and expects growers to know their vines better than she does. What makes her unhappy is finding a problem the grower has missed or has not told her about.
Seay gives growers a 10-page contract if she buys the grapes. Baldwin’s contract is 14 pages. Both spell out growing practices they expect to be followed.
Wine grape growing and selling wine is all about marketing. With the current wine economy, Baldwin said the “bloom is off” certified organic, sustainable and biodynamic grape growing practices as niche grape marketing tools. “I don’t think you will see the benefits of those things going down those roads for a long time,” he added.
Today, it’s all about finding a home for wine grapes at a profitable price.
Long-time vineyard consultant and vineyard manager John Crossland outlined some of the elements in establishing a vineyard “although I cannot imagine why anyone would want to plant a new vineyard today.”
People come to him all the time wanting to establish vineyards for a variety of reasons: retirement, hobby, lifestyle or “they want to spend their children’s inheritance.” He is the one who offered the small fortune joke at this wine grape gathering.
He detailed a long list of items to be covered before the first end post is driven, everything from ensuring an adequate water supply to a thorough soil analysis.
Selection of plant material is an area Crossland has had to re-evaluate. “There is a lot of ignorance about plant material,” he said, adding what nurseries once considered sources of clean rootstock have turned out to be not so clean. He believes vine mealybug has come into the Paso Robles area on replants to many vineyards, for example.
Crossland also believes soil issues combined with deficit irrigation and soil salt concentrations are contributing to the lack of success in developing Syrah into a successful bottled varietal.
Although Crossland is generally discouraging most new plantings, he said there is some replanting going on and he expects new vineyard development to eventually pick up, “but not like we saw 10 years ago.
“The cost of getting into the business has changed so dramatically since then. Plus everyone is concerned about water availability and quality,” he said. The shortage of labor is another major challenge that has only gotten more serious.
Merlot has fallen out of favor on the Central Coast with oversupplies. Crossland said 2,500 to 3,000 acres have come out or been grafted over in the past five years.
“I sense people are leaning back toward Cabernet Sauvignon,” he said. “There is also too much Syrah in the ground. However, it is a good blender” if it does not make good varietal wine.
There is still a market for high quality Grenache, Tempranillo and Pinot Grigio.
Regardless, if a grower is looking to replant or plant anew, Crossland has one final piece of advice: get a winery contract first.
Despite a gloomy market outlook for 2010, there was a packed house for the symposium sponsored by Precision owners Lowell and Becky Zelinski.
The day and a half program covered a wide range of production subjects from weed control to mechanical harvesting.
Coast viticulturist Mark Greenspan covered plant pathology and the two seasons in one when fruit is set at the same time buds are developed for the following year.
Weather is something growers cannot control, but they can mitigate and manipulate with pruning, suckering, shoot-tipping, hedging and leaf removal to react to the weather and produce quality fruit and buds for the following season.
A good nutritional management program that does not over-stimulate vines into vigorous vines is important on the coast where heat units can be limited.
“Vigorous, dense canopies restrict light to the basal zone. Avoid early season vigorous growth,” he said. Greenspan added that an open canopy early is preferred.
In season, pruning late can delay bud break and possibly avoid frost.
On the subject of winery-dictated hang time to improve fruit quality, Greenspan replied “hang time, sham time.” Once fruit is ripe, generally in the 24-25 sugar range, sugar levels beyond that do not enhance quality. “It’s dehydration,” he says.
Although the first mechanical grape harvesters were tested at UC Davis in the mid-1960s, the hand-harvesting versus machine harvest debate continues.
Neil Roberts of Roberts’ Vineyard Services, Templeton, Calif., said 75 percent of French grapes and 95 percent of Australian grapes are machine harvested.
Mechanical harvesting has caught on quicker in the rest of the world than in California, where Roberts says 80 percent to 85 percent of the vineyard operations over 500 acres are mechanically harvested and only about 40 percent of vineyards smaller than that are mechanically gathered.
Wine grape harvesting methods are normally dictated by the winery. There are many types of machine harvesters, each with its own style of harvesting head either on pull machines or self-propelled. Some harvesters double as over-the-row tractors as well.
Labor is one of the driving forces for switching to machine harvesting. Hand crews represent six to eight people per crew. Machines need as few as two to four people.
Hand harvesting costs $120 to $200 per ton; machines $60 to $85. Hand crews can harvest up to an acre per day; machines 10 to 20 acres on a good day. “Machines do not talk back,” Roberts noted.
With hand crews or machines, success comes from good supervision.
Most machine harvesting is done at night when it’s cool and there is less chance of fermentation beginning before the grapes reach the winery. Roberts operates hand crews and he said they can harvest at night with powerful lights.
However, Roberts said some wineries want day picking so fermentation can begin in the trailers. “It all depends on the winery and what the winery wants,” he noted, adding small wineries and small vineyard blocks are still predominantly hand picked. Yields of 2 tons or less are not economical to machine harvest.
Some wineries now have sorting tables for machine harvested grapes to remove MOG (material other than grapes) before the fruit is crushed.
“Mechanical harvesting technology is improving and there is more acceptance of mechanical harvesting. Any machine can do a good job if the vineyard and the machine are set up properly,” he concluded.
Powdery mildew spores overwinter and can land on susceptible tissue the following year, according to plant pathologist Lorianne Fought, development and market support leader for Bayer CropScience.
Powdery mildew, the No. 1 disease of California grapes, can adversely affect water and nutrient uptake, plant growth and transpiration, she noted.
Cultural practices like opening up canopies to improve air movement and fungicides can move powdery mildew outside of the crop production window, she said.
Don’t let the powdery mildew population build up, she warned. Use preventive fungicide programs. Clean up heavily infected areas.
Resistance management is a key element in a powdery mildew program. Don’t cut recommended fungicide label rates and avoid alternate row applications. Rotate modes of action and do not stretch treatment intervals beyond the recommended time frames. And remember, no powdery mildew resistance to sulfur has been recorded. “Coverage, coverage, coverage” are the three most important elements of fungicide sprays to prevent powdery mildew. “Dead bugs are not resistant,” she noted.