is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist

Industry to offer quality wines at lower prices

Consumers can look forward to purchasing high-quality wines at affordable prices as the U.S. wine industry matures and wine becomes more of an every-day beverage in American households, according to a recent survey of top industry executives conducted by Robert Smiley, professor and director of wine studies in the Graduate School of Management at the University of California, Davis. Smiley reported his survey findings and results from a broader survey of wine industry professionals at the Wine Industry Financial Symposium on Sept. 20, in Napa, Calif.

“The wine industry is basically healthy — despite a record 2005 crop and a worldwide surplus of relatively inexpensive wine — due largely to growing consumption by young adults,” said Smiley.

“Industry professionals expect the current shortage of pinot noir and pinot grigio to continue, and further expect average prices to creep up as the oversupply of other varietals is used up to satisfy growing demand.”

Survey of Wine Executives In his eighth annual survey of wine executives, Smiley inter- viewed the heads of 30 key wine operations, ranging from growers to distributors. These executives noted that:

· The hottest issues in the wine industry during the next five years will include consumer flavor and pricing preferences, environ- mental farming, regulatory challenges and direct shipping.

· Increased turnover in brand appeal will likely force producers to become more innovative with their products, labels and wine quality. These shorter brand-life cycles will reduce profit margins for producers. Retailers — who are most in tune with consumer demands — will drive brand selections.

· Consolidation of wine distributors, which has been occurring regionally, is beginning to occur nationally. New, smaller and more niche-focused distributors will continue to appear, however, to provide a level of service desired by wine producers and retailers.

· Recent industry strategies have focused more on estate wines—those wines produced exclusively from grapes grown in vineyards be- longing to one winery. Wineries also are gearing up to develop more creative packaging and marketing efforts, and plan to expand their businesses by acquiring more established brands.

· Oversupply will continue to be a cyclical problem, due to the agricultural nature of the industry, but in- creasing worldwide and domestic consumption will help absorb the excess wine.

Survey of Wine Professionals The broader survey of wine professionals, now in its 15th year, included 176 responding wine producers, wine grape growers, distributors, retailers and lenders. It is the largest of its kind in the wine industry.

“Industry participants are generally optimistic about the wine industry and feel that sales of wines in the mid-teens should grow most rapidly,” Smiley said. “The respondents feel that pinot noir and red zinfandel are particularly well suited to the emerging consumer tastes.”

This year’s survey revealed that 75 percent of wineries plan to introduce new wine varietals or blends and 50 percent plan to release new packaging during the next three years. Industry growth is expected in the mid-to- upper price range and will likely be strongest in wines selling for $10 to $14 per bottle.

The greatest growth in sales among red varietals will likely occur in pinot noir, followed by syrah, red zinfandel and cabernet sauvignon, the respondents projected. Among white varietals, the growth is expected to be strongest in sauvignon blanc, chardonnay and pinot grigio.

The greatest shortage of grapes among red varietals is anticipated to be in pinot noir grapes, followed by red zinfandel. Among white varietals, a shortage will be most prominent in pinot grigio, followed by chardonnay. Growers responding to the survey indicated that the greatest growth in wine-grape production is now occurring in the North Coast region, where vineyards in development make up 18 percent of the total acreage. Sonoma follows closely with 16 percent and Napa with more than 14 percent of the total acreage under develop. The growers reported that the North Coast region is also seeing the greatest concentration of organic vineyard management. More than 30 percent of North Coast vineyards are grown organically, followed by 17 percent in Sonoma and 3 percent in Napa.

Most of the largest wineries indicated that they plan to obtain grapes internationally during the next three years. More than 60 percent of the wineries producing more than million cases annually said that they will be growing or purchasing grapes globally.

As the wine industry matures and wineries release new products, distributors and retailers will be deciding which new wines to carry. The survey revealed that about 23 percent of distributors plan to make those decisions based largely on an established relationship with the sup-value of the new wine.

Retailers, on the other hand, said that quality, followed by price and value, of the wines will determine which new products make it onto their shelves. Looking at the international wine market, all respondents project an increase in market share for Spanish wines, and decreasing market share for French. The UC Davis Graduate School of Management will continue its

work with California wine executives when it collaborates with the UC Davis Department of Viticulture and Enology in offering the 8 in Sacramento. The four-day program will focus on “Blending the Business and Science of Winemaking.”

More information about this this spring program is available online at:

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.