What is in this article?:
Globalization of wine marketing may impact Central Valley wine grape production as demand is filled by cheap imports.
Jim Lapsley’s PowerPoint slide opening his 2030 outlook for California wine grapes was a thousand-word photo.
It was a slide of a Caterpillar tractor gouging out a central San Joaquin Valley vineyard with massive ripper shanks. It should have been a new vineyard planting based on Lapsley’s assessment that within 20 years, 42,000 acres of new vines could be needed to meet growing U.S. wine consumption.
However, Lapsley, a former winemaker and retired University of California, Davis, wine economist, recognizes the globalization of wine marketing likely will keep the big D8 Cat working more than vine planters as the demand for Central Valley wine grapes is continually filled by cheap imports.
Lapsley was one of a half-dozen economists from throughout the world and California wine industry leaders who offered a sobering outlook for the California wine industry in the emerging global wine market at an outlook symposium at UC Davis.
Outlook and Issues for the World Wine Market sponsored by the Robert Mondavi Institute at UC Davis was held on campus in late June.
Every wine and California grape market prognosticator of late refers to the “global wine market” as a new paradigm. Those are fancy words for the bloodletting many grape growers are experiencing with low prices and no buyers for uncontracted grapes.
It was put into sharp focus by two growers who were looking for solutions during the question-and-answer session. One said he had left unharvested Chardonnay grapes hanging on the vine in the fall for the first time in 22 years, the casualty of 22 percent of the California Chardonnay market being taken by Australian bulk imports in 2009.
Another complained that he was forced to custom crush for the first time last season when he could not sell his grapes. He is now “learning a new job” selling Russian River Chardonnay and Napa Valley Cabernet Sauvignon in bulk to China.
The experts offered a simple piece of advice; get used to it — it’s the new world.
The hemorrhaging in the California wine grape market has obviously not been confined to “commodity” wine grapes in the Central Valley. Higher priced coastal wines and grapes have also suffered. Central Valley farmers have alternatives like almonds, walnuts and pistachios to plant after pulling out unprofitable wine grapes. Coastal growers do not.
Wine industry consultant Tom Selfridge, former president of The Hess Collection and Chalone Wine Group, echoed the sentiment in some circles that higher priced wines are showing rebound. It is not robust, but he predicted it will continue. In his optimism for the future of premium wines and wine grapes, he cited shifts in U.S. population dynamics like the Millennial Generation (those turning 21 over the next few years) who are “more apt to read the back label and more likely to take advice (on wine) from third parties.” They also are more likely to be Internet wine buyers.