Saturday, May 11, 2024

Ethanol: "California wine is in serious trouble"

From the San Francisco Chronicle, May 8:

For 25 years, the wine industry boomed. Then it started to unravel.

Megan Bell felt certain that her winery was going bankrupt.

When she released a new batch of wines in August, only three of her 19 distributors agreed to buy any. She was running $65,000 over budget on opening a tasting room in Santa Cruz. And she owed $80,000 to grape growers.

Sales in the second half of the year were the worst Bell had seen since starting her small business, Margins, eight years ago. Bell labeled 2023 “a disaster” and said she knows she wasn’t the only winemaker feeling it: “If anybody’s not telling you that, they’re lying.”

The entire $55 billion California wine industry is, like the wine industry worldwide, experiencing an unprecedented downturn now. No sector is immune — not the luxury tier, not the big conglomerates, not the upstart natural wines. Wine consumption fell 8.7% in 2023, according to leading industry analyst the Gomberg Fredrikson Report, a sobering reversal for an industry that had, for a quarter-century, taken annual growth for granted.

This year could be the breaking point, with many industry figures predicting “a good-sized housecleaning,” as put by Ian Brand, owner of I. Brand & Family Winery in Monterey County. 

“A lot of brands are dead, but they don’t even know it right now,” echoed Michael Honig, president of Honig Vineyard & Winery in Napa Valley. 

An extinction-level event has not come to pass — yet. But regardless of the winery survival rate, it’s become clear in 2024 that the nature of the California wine industry has fundamentally changed. After decades of unfettered growth beginning in the 1990s, wine consumption started to flatten around 2018. Now, following what appeared to be a spike during the pandemic, it’s in dramatic decline....