Column: Is now the right time for California wine grape commission?
Feb 20, 2006 9:48 AM, By Harry Cline, Farm Press Editorial Staff
This year’s Unified Wine and Grape Symposium, the biggest viticulture-enology gathering in California, was once again a golly gee whiz California wine is the greatest thing since sliced bread event. Certainly, as Jon Fredrikson pointed out, wine sales in the U.S. have skyrocketed over the past decade. He said wine is gaining “traction” in the U.S. and becoming part of the American lifestyle.
However, there is a Mt. Whitney-size mountain to climb with that traction.
U.S. per capita wine consumption remains pathetically behind the rest of the world, languishing at less than 3 gallons per capita. By comparison in Australia and the U.K. it is 5.5 gallons. Beer consumption in the U.S. is nearly nine times greater than wine.
Fredrikson said the future for wine consumption in the U.S. is bright. It is even brighter for imports, which continue to take a larger percentage chunk of the U.S. wine sales increase than California wine.
Last year’s crop was huge. 2005 was supposed to a turnaround year for growers. It wasn’t. It was another year of frustration for many San Joaquin Valley and some coastal grape growers who saw low prices once again and summer demand disappear under the weight of a crop 20 to 25 percent larger than the year before.
It may be good times for wineries, but growers are still frustrated watching imports take a bigger share of growing market while they take little more than production cost prices for wine grapes.
Rank and file producers are tired of the tail wagging the dog. They are tired of wineries dictating the direction of the California grape industry.
There are about 1,400 wineries in the state, but four winery groups: E&J Gallo, Constellation Brands, The Wine Group and Bronco (“Two-Buck Chuck”) Wine Co. control two-thirds of the volume and half the dollars in the California wine industry, according to a recent Wine Business Monthly issue.
Four entities control prices paid for more than 3 million tons of California grapes and concentrate. The California wine business is ripe for a monopoly or restraint of trade/price fixing investigation, but that will never happen. Wineries and their Wine Institute (say Gallo) have too much political clout for that to happen.
Rather than going after the big four which control grape pricing, grower frustration is boiling over to the point of suggesting once again -- a grower-funded generic California wine promotion effort like those used for California almonds, milk, table gapes, walnuts, cheese, etc., etc. could be the solution to languishing California wine sales.
A winery-grower funded wine commission was created in the 1980s, but it died quickly at the hands of wineries after a short, acrimonious marriage of vintners and producers. One thing major wineries do not want is growers joining together under any umbrella.
That attitude has not changed, according to Wine Institute consultant Barbara Insel. When asked at a press conference at Unified if wineries would support generic California wine promotion. She said an “institutional” decision had been made not to support such an effort.
Nat DiBuduo, president of Allied Grape Growers and Lockeford, Calif., grape grower Rodney Schantz, president of California Association of Winegrape Growers (CAWG), quickly disagreed with that “institutional” decision. They both support generic promotion of California wine, and DiBuduo said he would welcome talks with the major wine grape grower groups to work toward a mandatory grower-funded generic wine promotion commission.
Schantz does not favor a mandatory program, but says growers would support a voluntary program. Unfortunately, voluntary promotional efforts seldom succeed.
End of story? Maybe not.
There was an interesting article on the subject of mandatory grower assessment in the Sacramento Bee on the Unified speech of Gallo vice president of viticulture Nick Dokoozlian, former University of California viticulture specialist. It sent a different signal that the one by Insel, but was it intentional and the official word from Gallo?
Dokoozlian complained that the California wine industry is not adequately funding research and suggested a mandatory levy. He said voluntary funding for research has not been adequate.
He cited the $8 per ton mandatory assessment on Australian wine grape growers as one reasons Australians have had so much success importing wine into the U.S.
Dokoozlian cited specifically the successful California Table Grape Commission as an example of what he would like to see created for California wine grapes. When Dokoozlian was at UC, he got tons of cash from the commission for R&D on new table grape varieties and production research.
However, the table grape commission was not created to fund viticulture research. Although important, funding production research is a secondary function of the commission. It was formed by growers and shippers to promote consumption of table grapes and that mission has not changed since the commission was created in 1967.
The newspaper article said Dokoozlian recognized that improving sales was the primary goal of the table grape group, which has long been considered a benchmark for creation of other commissions.
Were Dokoozlian’s comments valid insight into a change of heart from the world’s biggest winery? Would Gallo be willing to pay 10 cents per case of the 75 million cases of wine it shipped in 2005 for viticulture research AND generic promotion of California wine?
Perhaps the most telling comments from Dokoozlian were the final quote in the article:
“We are really behind the eight ball,” said Dokoozlian. “Most of the wine industry and gatekeepers have little idea of what attributes in wine consumers like and dislike.”
I am still shaking my head in disbelief at that quote. If Gallo doesn’t have any idea what consumers like or dislike, who does?
California may need a wine grape commission more than anyone realizes.
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