The industry has been riding on the “wine is good for you” trend since the early 1990s, but “negative” press about alcohol is growing, said the CEO of one of the largest U.S. wine companies on Thursday.
Brian Vos, top executive of The Wine Group, ranked No. 2 by Wine Business Monthly with 53 million cases sold annually, was the keynote speaker before about 350 attending North Bay Business Journal’s 18th annual Wine Industry Conference, held at Sonoma State University in Rohnert Park.
A 1991 story by CBS News’ “60 Minutes” program on the “French paradox,” suggesting red wine could be good for you, drove up consumption. But in more recent years, the industry has paid scant attention to growing bad publicity, Vos said.
Just recently, he said, a United Kingdom media story was headlined, “One glass of wine a day can shorten your life.” Stories like that splash on the scene, but any counter to them — factually or from experts — rarely gets the same press attention.
He cited this “drip, drip, drip” of negative attention, reminding the audience of the public perception and regulatory shift in attitudes toward tobacco from 20 years ago to today.
It is all about “rapid change” he said, but “changes that can be seen as small when you are in the middle of it, can turn out to be huge later.”
On another hot-button industry challenge, labor, Vos said the industry is well-aware of the issues for vineyard workers but has paid less attention to the challenges and opportunities on the manufacturing side, such as bottling.
“It isn’t sexy” and is a job that people consider “something you have to do to get by,” he said. As a result, people are getting overworked and the industry loses good people, Vos said.
On the conference panel “The Wine Growth Cycle: Are We at the Peak?” were Tony Correia, a North Coast vineyard appraiser; Dan Leese of V2 Wine Group in Sonoma; Jon Moramarco of BW 166; JoAnn Wall, a Central Coast vineyard appraiser; and Carl Stillman, an Oregon vineyard appraiser.
Talking about the North Coast, Correia, principal and owner of The Correia Company, said the prices for grapes in “premium” areas of Napa have been largely unaffected by economic conditions and continue to rise while the prices for grapes in “secondary” or “outlying” areas and trended “up and down.”
In Sonoma County, the winegrape variety pinot noir continues to drive the bus, he said, with an average grape price of about $4,000 per ton.
Concerning the California Central Coast, Wall, owner and principal appraiser for Above and Beyond Real Estate Services Inc. in Templeton, said Monterey County is heavily invested in chardonnay and pinot noir plantings. Wine competes with row crops for the valley floor, but areas like the Santa Lucia Highlands appellation are popular. A recent transaction involving a vineyard replanting sold for $73,600 per acre.
She said there are physical limitations to expanding vineyards in the region, even though the area has good water options. Given the limitations on vineyard acreage and good water situation, she sees the county vineyard market continuing to gain strengthen.
Continuing down the Central Coast to Paso Robles, what had been an historically zinfandel area has moved to cabernet sauvignon ($15–$25 bottle price), Wall said. Grape prices have been climbing, exampled by an April sale of a vineyard went for $72,000 per acre. She described Paso Robles as among the Central Coast locations “ripe for consolidations.”
Wine Industry Conference
Read more interviews with Wine Industry Conference 2018 speakers (nbbj.news/wine18qna):
Keynote: Brian Vos, CEO of The Wine Group
Panel: Drive to Premiumization
Jeff O’Neill, founder of O'neill Vintners & Distillers, Larkspur
Judd Wallenbrock, president and CEO of C. Mondavi & Family (Charles Krug Winery), Napa
Kevin Phillips, vice president of operations for Michael David Winery, Lodi
Bob Torkelson, president and CEO of Trinchero Family Estates, St. Helena
Panel: Wine Growth Cycle: Are we at the peak?
Dan Leese, president, CEO and co-founder of V2 Wine Group in Sonoma
Jon Moramarco, Managing Partner, BW166
Tony Correia, The Correia Group, North Coast vineyard appraiser
JoAnn Wall, Above & Beyond Real Estate Services, Central Coast vineyard appraiser
Carl Stillman, Stillman & Associates, Oregon vineyard appraiser
Economic outlook: Gary Schlossberg, Wells Capital Management