But, and there is always a “but,” Americans kept drinking more wine, never giving a thought to a possible grape shortage.
The cost of Cabernet red grapes has roughly doubled over the past year as has the price for other Golden State varietals such as Chardonnay and Muscat. That is good news for the growers but not for many others in the industry. Over-supply of fruit in the United States is fading away. Inventories of bulk wine on the spot market have fallen sharply as growers fall short in meeting demand.
Mr. Esterl’s follow-up point to the above information is probably the core of the problem. Alternating cycles of domestic over-supply often last a decade as growers react to rising or falling prices. Newly planted vines take a full three years or longer before yielding fruit, making it impossible for the industry to pivot overnight. Add to this the cycles of weather and shifting consumer tastes and you now have a long-term problem.
What does all of this mean for us? Americans could be drinking more imported wine in the coming years. (Not necessarily a bad thing!) California is responsible for 90% of domestic wine production but only represents 10% of global output. Wine imports have doubled over the past decade and boast a 30% share of the US market. Italy and Australia are the biggest suppliers to the US market.
Wine volume sales in the US have risen 18 straight years, including a 6% increase in California alone. California wine exports have risen by 6%. Further exacerbating the shortage problem is the fact that wine acreage in California has been reduced by 27000 acres, and acreage dedicated to other, more profitable products, has increased by 230,000 acres.
California’s grape squeeze has become more problematic by the recession, which caused the industry to hold off longer than usual on planting new vines. Several strong harvests, including one in 2009, further delayed plantings.
The tug-of-war for land is particularly fierce in the Central Coast AVA. This is a huge land area in California that extends north to south nearly 200 miles. Along with grape production, there are approximately 200 other crops competing for space. One example that I thought particularly poignant was the story of the Bronco Wine Company. Bronco has 45,000 acres under vine and would like more. The company produces wine under the Charles Shaw label. You know this Label as “two-Buck-Chuck” of Trader Joe’s fame.
The above information is not an attempt to provide my readers with facts, figures, and statistics. Rather, it is an effort to inform you of a problem in the wine industry; and to suggest that alternatives from other states and other countries may be very good choices. Another possible scenario is that producers of high volume wine may keep the price as is – for example, the producer of an $8 bottle of Cabernet or Chardonnay. This would suggest that bulk quantities of grapes would be brought in from other countries. The producer changes the appellation and is able keep the price competitive.
If I could offer an opinion. Should this shortage continue, it presents an opportunity to the individual states to flex their wine muscles and to ship product beyond their borders. Many states in the continental US produce quality wines, and if the problems persist in California, this could be a solution.
Another current event was brought to my attention just this week. Charlie Trotter’s Restaurant, part of the Chicago restaurant scene, is going to close. This is a really significant restaurant event. The restaurant was opened 25 years ago. Mr. Trotter’s goal was to introduce a new way of dining: to share his love of the European style degustation menu and to show how a well curated wine cellar and brilliant service could take dining to a new level. Mr. Trotter succeeded. His restaurant became world famous. Along with the many hundreds of accolades that he has received over the past 25 years is included – many times over – the award called the Wine Spectator Grand Award. This award is given for excellence relative to the wines that are offered to the restaurant clientele, the way that the wines are protected in storage and for the sommelier service. My own personal loss is that I will have to remove his restaurant from my bucket list.
WINESPEAK. What is a Degustation Menu? A Degustation Menu is a tasting menu. It is assembled with many small courses and is usually accompanied with wines that blend well with the food that is being served.
Next issue maybe we can start France in the Loire.