[caption id="" align="alignleft" width="403" caption="Francesca Schuler (center), chief marketing officer of Treasury Wine Estates, explains how wine consumers today should be defined by their lifestyles and preferences, not simply by generational boundaries. She was part of the 2011 Unified Wine & Grape Symposium panel Wednesday on the state of the wine industry in Sacramento. Danny Brager (left) of The Nielsen Co. detailed wine sales data, and Nat DiBuduo (right) of Allied Grape Growers discussed challenges facing winegrape farmers in the North Coast and statewide. (Jeff Quackenbush photo)"][/caption]
SACRAMENTO -- Sales of wine in restaurants are improving but will be challenging for the next five years amid a lasting consumer shift to "value," but growers of grapes for ultrapremium-priced wines are facing higher costs than are covered by the increasing number of grape buyers, according to experts at a major wine industry conference in Sacramento today.
Danny Brager of The Nielsen Co. told a gathering of 1,300 industry professionals at an annual industry forecast at the Unified Wine & Grape Symposium that the on-premise wine market is improving, but lasting consumer behavior will slow that recovery. About 12,000 are expected to attend the three-day event.
"The losses they incurred put them in a pretty deep hole," said Mr. Brager, an alcoholic beverage market analyst for the consumer behavior research company.
He gave an example of a restaurant with $1 million in revenue in 2007 won't have returned to that level until 2015. That assumes a pace of 2 percent on-premise sector revenue growth in 2011 and 3 percent annually thereafter.
Nation's Restaurant News' index of 33 publicly owned restaurants had more in the black last year than in 2009, when only Buffalo Wild Wings was in the black, Mr. Brager observed.
Same-establishment annual sales growth for casual and fine restaurants reached a low of negative 8.8 percent in the third quarter of 2009 and increased to negative 4.9 percent at the end of that year, negative 1 percent in the first quarter, positive 0.2 percent in the second quarter of this year and 1.9 percent in the third quarter.
Consumers continue to be pragmatic and cautiousin their spending, despite rising confidence index levels, Mr. Braver noted.
Thirty-seven percent of consumers in a Nielsen confidence survey said they will continue to cut out-of-home entertainment even as the economy improves, up from 27 percent in October 2009.
DiBuduo: 20 percent drop in 2010 North Coast crop brings out buyers but some at prices below costs
As for the grape supply, the extent of the damage from the hot and rainy 2010 season will start to be pinpointed with the release of the state's annual grape report next week, but the North Coast crop is expected to be 20 percent below the 2009 crop, according to grape marketing expert Nat DiBuduo, president of Allied Grape Growers.
The 372,000-ton estimate for the region would be about the same as the frost-shattered 372,162-ton 2008 crop, he noted. Statewide, the winegrapes is estimated to be 3.189 million tons, or 14 percent below the bumper 3.7 million-ton 2009 crop.
More buyers are emerging for grapes after a significant reduction in demand in the past two years, according to Mr. DiBuduo. Buyers are looking for bulk wine and grapes in January, rather than waiting until harvest, as a number have done in the past two years.