In some ways, the wine industry is stable, Allied Grape Growers' Vice President Jeff Bitter told the crowd at the annual Unified Wine & Grape Symposium.
“With all of the supply pieces now in place, it appears we will have virtually no material growth in bearing acreage through 2020,” Bitter told the crowd. “Supply growth will likely only come through increased productivity and likely ‘larger’ annual crops.”
Bitter told the crowd that’s because for the last three years, vineyards have been planting at attrition rate.
“Based on what we know of what’s been planted, our bearing acres will flatten out,” he said. “That’s going to give us crops on the level of 4.25 million tons on average.”
Beneath the top line, though, there’s change bubbling up as growers rebalance the types of grapes they grow.
That’s what the data showed from the Allied Grape Growers’ survey of nursery operators around the state.
“Cabernet sauvignon once again is the king of planting, with 37% of new vines sold last year,” Bitter said. “Pinot Noir is in second, and between those two varieties, they represent 52% of all vines being sold.”
In California’s Central Valley, Bitter said growers feel a pressure to choose crops that deliver the most yield on acre, and with limited water in some cases, tree nuts and other valuable crops can displace wine acres.
“Wines under $10 (a bottle) are not seeing shipment growth, and that has huge implications for the Central Valley,” Bitter said. “The valley still needs to lose a few thousand acres. If we do have that average or above average crop, we are poised to have excess wine grapes in this portion of the market.”
Bitter said bright spots include some vineyards that can produce more than 30 tons per acre, and an ability to produce rosé, for which demand is rising.
In the North Valley, trends of note include compressed profit margins for growers and the less popular status of Zinfandel compared with Cabernet and other varietals.
“There’s more angry grower syndrome in Lodi than anywhere else in the state,” Bitter said. “Growers are working off less and less margin.”
Still, Bitter said there’s huge opportunity for growers around Lodi, with the ability to produce almost any variety, and sizable growth on the horizon for Bordeaux blenders and red blenders, including Petite Syrah.
California Coastal area wine grape growers are more concerned about finding labor, Bitter said.
“You’ve got huge competition for the labor pool especially in the north coast, where there’s a lot of construction draw from the fires, and now you’ve got the cannabis thing,” Bitter said. “It’s going to be a pinch on labor, and not just quantity, but quality.”
As for planted acreage, red wines are on the rise, including Cabernet and Pinot Noir.
“It’s still the epicenter of growth,” Bitter said of the region. “Despite the fact that it might be slowing, it’s still where all the excitement is.”