Survey: Despite challenges, California wine execs remain hopeful

09/26/2012 04:33:00 PM
Vicky Boyd

pinot noir winegrapesVicky BoydCalifornia wine industry executives expect pinot noir to continue to be an in-demand red varietal, according to a survey.Despite a predicted long-term shortage of winegrapes and continuing economic pressures, California wine leaders are cautiously optimistic about the industry's future.

Those are the results of two surveys conducted by the University of California, according to a news release.

The industry most likely won't return to the somewhat biddy wine-buying days of 2006 and 2007 in the near future.

But industry leaders say that a strong and growing consumer base for California wines continues.

Robert Smiley, an emeritus professor and former dean of the UC Davis Graduate School of Management, has surveyed wine executives the past 11 years and winemakers for 21 years.

The wine executive surveyed involved heads of 24 leading wine operations, including wine companies, grape-growing and wine-distribution firms, and financial institutions.

Although this fall's harvest appears strong, it won't make up for several short years.

Most of the survey respondents say they're having to deal with grape shortages, which were caused by increased demand. At the same time, plantings of new vineyards and replanting of aging vineyards has not kept pace.

As a result, wine producers are paying more for grapes, buying from other countries, buying from lower-priced appellations, expanding or extending grower contracts and planting new vineyards.

In addition, wine executives say they've experienced vineyard laborer shortages.

When harvest of crops in a region overlaps the winegrape harvest, growers frequently find themselves having to compete for harvest crews.

Rising production costs and stagnant wine prices have conspired to squeeze winery margins from both sides, according to respondents.

Smiley's survey of the state's wine professionals involved 138 winemakers.

Many say that consumers are influenced less by brand and more by social media when making purchases.

As a result, they say social media played a moderately important role in their own businesses.

They cite Facebook, followed by Twitter, company blogs and LinkedIn as their preferred social media tools.

The winemakers predict that during the next three years, the strongest demand among red wines would be for cabernet sauvignon, pinot noir and red blends.

Among whites, it would be chardonnay, muscat and sauvignon blanc, followed closely by pinot grigio.

They expect to see the strongest growth in sales in the $10-$14 and $14-$20 ranges.

As the economy recovers, respondents say they are hopeful that consumers will return to buying higher-priced wines.



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