Wednesday, August 27, 2014
YOLO COUNTY NEWS
99 CENTS

Wine leaders enthusiastic about industry future

By
From page A16 | September 29, 2013 |

GrapesW

Grapes hang heavy in the vineyards at Heringer Winery in Clarksburg, ready for harvest. Fred Gladdis/Enterprise photo

Despite long-term concerns about climate change and regulatory pressures, California wine industry leaders are once again quite bullish about the wine business, according to two new surveys conducted by UC Davis.

Findings from the surveys of wine executives and industry professionals were presented Tuesday during the Wine Industry Financial Symposium in Napa.

“The wine industry, by and large, has weathered the worst of the economic downturn of this decade,” said Robert Smiley, professor and dean emeritus of the UCD Graduate School of Management.

“The CEOs and professionals who participated in these surveys expressed a growing confidence in the future of traditional brands and optimism for the expanding global market,” he said. “And, to varying degrees, they are interested in exploring new products to meet the demands of the millennial generation and increasing their use of social media in their marketing strategies.”

Smiley has surveyed wine executives for each of the past 12 years and winemakers for 22 years. The surveys examine global and national trends in the wine industry. They complement other wine research and teaching at UCD, home for more than 100 years to the most comprehensive university wine program in the United States.

In this 12th annual wine executives survey, Smiley gathered the opinions and projections from the heads of 28 leading wineries.

Now that the economy is rebounding, brand and quality are having more of an impact than price on consumer purchases, the respondents reported. They noted that even during the more difficult economic years, many consumers who were accustomed to the more expensive, higher-quality brands continued to purchase those wines; they simply bought less of them.

As the economy recovers, consumers will continue to make luxury wine purchases, but those will be well reasoned, rather than “frivolous luxury” purchases, one executive predicted.

Asked how firms are vying for the attention of the millennial generation, in light of competition from craft beers and craft cocktails, the executives offered mixed responses. Some reported that they or their competitors are developing new products by adding flavors, carbonation or even spirits to regular wine.

“It’s a great opportunity to experiment with the millennials because they are focused on things like authenticity and some integrity,” said one respondent. “They love to discover things.”

Others respondents said they are not creating such “pop products,” but rather are continuing to innovate in terms of how they source grapes and make wine, with an emphasis on quality.

Most respondents voiced keen interest in international market expansion in a variety of regions including Asia, South and Central America, Europe, Canada, Russia and even Africa.

Several respondents reported that their firms are cautiously eyeing the massive Chinese market, but with significant concerns about its stability. One executive found Japan to be a far stronger market than China, noting that Japanese wine consumers “have been buying Napa Valley wines for a long time and have a preference for those luxury items …”

In the area of social media, the executives reported that their businesses use a variety of services, including Twitter, Facebook, Yelp, Instagram, Pinterest and Trip Advisor. Special online offerings include live tastings and streaming video. And, they are training their employees on the importance of product quality and customer service, especially in an era when consumers’ likes and dislikes are so quickly and broadly shared with the online community.

Identifying hot topics for the next five to 10 years, the survey respondents said they are most concerned about the effects of climate change; environment-related regulatory pressures; and the availability and cost of labor, land and water.

Wine professionals

Smiley’s survey of California wine professionals, now in its 22nd year, gathered the opinions of 110 wine industry leaders. Most of the survey respondents represent wine companies; others are from operations that range from wineries to grape-growing and wine-distribution firms to financial institutions.

The survey respondents overwhelmingly predicted that the greatest opportunities for the wine industry will be found in increasing direct sales to consumers; followed by consumers “trading up” in terms of the price and quality of their purchases, increased wine sales, and the new market that is evolving as the millennial generation comes of age.

They project that during the next three years, California wine sales will receive their greatest boost from an improved economy and increased consumer confidence, followed by rising direct sales to consumers, improvements in value for price, and large or above-average wine-grape crops.

On the other hand, they anticipate that the greatest hurdles for the California wine industry during the next three years will be higher input costs and slow economic recovery, followed by limited water availability and “margin compression” — a decline in the margin of revenues compared to costs.

The respondents predict that over the next three years, the strongest white wine varietals will be chardonnay, sauvignon blanc and pinot grigio, while the strongest red wines will be cabernet sauvignon, pinot noir and red blends.

They anticipate the strongest growth in sales will be among wines in the $10-$14 per-bottle range, followed closely by the $14-$20 range.

— UC Davis News Service

Comments

comments

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Mr. Dolcini goes to Washington

    By Tanya Perez | From Page: A1

     
    Yolo grows sunflower seeds for the world

    By Margaret Burns | From Page: A1 | Gallery

    True Blue Devil Arnold gave back starting in high school

    By Bruce Gallaudet | From Page: A1 | Gallery

     
    American militant reportedly killed in Syria

    By The Associated Press | From Page: A2

    Gaza cease-fire holds as sides weigh gains

    By The Associated Press | From Page: A2

     
    California beach town sees flooding from hurricane

    By The Associated Press | From Page: A2 | Gallery

     
    Assembly passes campus sexual-assault bill

    By The Associated Press | From Page: A2

    Sunder campaign distributes signs

    By Enterprise staff | From Page: A3

     
    Dinner, auction benefit Yolo County CASA

    By Enterprise staff | From Page: A3

    Farmworkers’ son wins prestigious NIH scholarship

    By Julia Ann Easley | From Page: A3 | Gallery

     
    Interested in Portuguese? Drop by I-House

    By Enterprise staff | From Page: A3

    Play groups offered by Center for Families

    By Enterprise staff | From Page: A3

     
    Solar-cooking workshop set at Food Co-op

    By Enterprise staff | From Page: A3

    Give blood and get a free movie ticket

    By Enterprise staff | From Page: A3

     
    Chat with Poppenga at coffee shop

    By Enterprise staff | From Page: A3

    Raley’s pays $1.6 million to settle hazardous-waste lawsuit

    By Special to The Enterprise | From Page: A4

     
    Back-to-school party benefits Archer campaign

    By Enterprise staff | From Page: A4

    Breast cancer program examines surgery

    By Enterprise staff | From Page: A4

     
    Crisis nursery bill on governor’s desk

    By Enterprise staff | From Page: A4

    Global warming on group’s agenda

    By Enterprise staff | From Page: A4

     
    A sweet reward for turning in cash

    By Kathy Keatley Garvey | From Page: A4

    Yolo Federal to hold photo contest

    By Enterprise staff | From Page: A4

     
    Try yoga, meditation at Holistic Health Center

    By Enterprise staff | From Page: A4

    Troops get ‘Hugs From Home’

    By Special to The Enterprise | From Page: A4

     
    Documentary reveals ‘The Village Under the Forest’

    By Special to The Enterprise | From Page: A5

     
    UCD West Village gets an electric Zipcar

    By Special to The Enterprise | From Page: A5

     
    UCD ranks No. 16 for serving the public interest

    By Special to The Enterprise | From Page: A7

    Little Rock hero featured at reunion

    By Enterprise staff | From Page: A7

     
    Wolk’s infrastructure bill clears state Senate

    By Special to The Enterprise | From Page: A9

    .

    Forum

    Parents could use a hand at home

    By Creators Syndicate | From Page: B5

     
    Obama risks alienating Latinos

    By Tom Elias | From Page: A6

    A water plan for all of California

    By Special to The Enterprise | From Page: A6

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A6

    MRAP sends the wrong message

    By Letters to the Editor | From Page: A6

     
    Play structure idea endorsed

    By Letters to the Editor | From Page: A6

    Thanks for firearms info

    By Letters to the Editor | From Page: A6

     
    .

    Sports

    Buschman, Cats mute the Sounds

    By Enterprise staff | From Page: B1

     
    New coach eager to see his Aggie charges hit the courses

    By Bruce Gallaudet | From Page: B1 | Gallery

    Shaw respects Aggies, while Gould is happy to get a shot at Stanford

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Devils prep for tough 2014 volleyball schedule

    By Chris Saur | From Page: B1 | Gallery

    Bumgarner deals as Giants blank Rockies

    By The Associated Press | From Page: B1 | Gallery

     
    Carter’s blast send Astros past A’s

    By The Associated Press | From Page: B2

    Sports briefs: Online registration ends Friday for Labor Day Races

    By Enterprise staff | From Page: B8 | Gallery

     
    .

    Features

    Field to fork: Play catch-up with summer’s produce

    By Dan Kennedy | From Page: A10 | Gallery

     
    .

    Arts

    .

    Business

    .

    Obituaries

    Franco M. Navazio, M.D.

    By Special to The Enterprise | From Page: A4

     
    .

    Comics

    Comics: Wednesday, August 27, 2014

    By Creator | From Page: B6