2019 could be year of price adjustments, consumer contrariness
As predicted during the record heavy 2018 winegrape harvest last October, Sonoma County growers and many of their winery partners are facing a year of 2019 with flattening prices, over supply and the end to a two-decade “pretty good ride.” That was the summary message delivered last week at the Sonoma County Winegrowers (SWA) 28th annual Dollars & Sense seminar and trade show held at the Luther Burbank Center in Santa Rosa.
Shelf space in grocery stores and wine shops is in high demand and wine consumers are becoming pickier about prices and overall drinking experience. That is why the Winegrowers group is launching a smart phone app that will bring a bottle of wine to life in video and storytelling. The augmented reality app is just one of the local growers association’s global and local marketing efforts to keep Sonoma County grapes and wine on the world’s center stage.
Meanwhile, the local farmers and winery members reported another year of excellent progress to become the world’s first 100 percent sustainable farm region, supporting a triple bottom line of environmental stewardship, social responsibility and economic viability. SWA president Karissa Kruse last week reported that 89 percent of SWA members’ vineyard acreage has been verified as sustainable under a third-party audit. “Our roots are in family farming and we’ve always shared a special bond that makes Sonoma County such a special place to live and farm,” she said.
The 20-year good ride referenced by wine broker Glenn Proctor saw the steady rise of the Sonoma County brand, featuring strong fruit prices, strengthened partnerships with wineries and increased market share in both local and global markets. Proctor is a partner with Ciatti Company based in Novato.
But consumer demand and spot market prices are both slowing down, said Proctor, due to over supply and, “a new reality. We’ve been here before but that doesn’t mean we don’t need to collect a new set of information and stay active,” he said.
There is almost 1 million gallons of unbought wine now being stored across the North Coast region, Proctor said. He called case good sales “sluggish” and the current spot market activity “extra quiet.”
Most growers have long-term contracts with wineries and buyers which helped stabilize 2018 prices. But some growers were still left with extra fruit and no buyers. “Now might be a good time to get out those contracts and look them over for next year,” Proctor said.
Other seminar speakers cautioned the local growers to reexamine their costs of operations and land acquisitions. One speaker suggested 2019 might be a good time to consider re-planting some vineyards for future market trends or climate changes.
Sonoma County Winegrowers has about 1,800 members, mostly small to medium size vineyards of less than 80 acres. Sonoma County has 50,000 total acres of vineyards that produced an estimated 230,000 tons at record varietal prices across almost all appellations. The total crop value will approach $600 million. Just 10 years ago (2008), county winegrowers’ total crop sales were just $380 million while farming almost the same acreage total as this past year.
Besides Proctor and Kruse the growers were addressed by Michael Haney, executive director for Sonoma County Vintners and Lulie Halsted, chief executive of Wine Intelligence. SWA chairman Joe Dutton offered opening remarks. The annual Nick Frey award for community contributions was given to industry photographer George Rose, who has served the Sonoma County wine industry for 40 years and is now semi-retired living in San Diego.
Kruse gave a report on the activities of the Sonoma County Grape Growers Foundation which distributed $1.3 million in funds to farmworker wildfire victims, youth scholarships, grower training, a vineyard employee recognition program and teacher externships.