John Fredrickson of the Gomberg Fredrickson Report noted that California wine shipments were up by 2% last year, but grew more slowly than imports.
PHOTOS: Ken Freeze/Brown Miller Communications
Sacramento, Calif. -- The turnout was so big for the Wednesday morning session of the Unified Wine & Grape Symposium that one speaker suggested that next year's event be moved to a stadium. He was exaggerating, but organizers of the expanded four-day event said this year's attendance was up by 1,100 over last year's, and set a new record of 11,500.
Glenn Proctor of the Ciatti Co. said increased import competition is here to stay.
Joshua Greene of Wine & Spirits magazine said diners' tastes are leaning lighter.
Craig Rous is president of the Unified Symposium's co-sponsor, ASEV.
Peter Hayes spoke as head of the International Organisation of Vine and Wine.
Ted Baseler, president of Ste. Michelle Wine Estates, has "sustainable brands."
Exhibits in the accompanying trade show were also up, from 500 last year to 524, but there still was not enough room available at the Sacramento Convention Center to accommodate a waiting list of about 100 more suppliers. The attendance seemed to reflect the same positive vibe that pervaded the Wednesday general session, in which speakers gave their views on "The State of the Industry."
While wine sales have continued to grow, and many wineries have been celebrating successes for two to three years, the financial health of vineyards is a trailing indicator of the overall industry's performance. This year, even California grapegrowers have some reasons to celebrate, said Nat DiBuduo, president of Allied Grape Growers. After a 10-year period in which 125,000 acres of winegrape vines were pulled from California's interior, "There may be a need for some new planting," he said, but only for growers with solid winery contracts. Chardonnay, Pinot Noir and other varieties have gone from a surplus situation to a balanced or slight shortage status in the last year.
"Planting, like drinking, should be done in moderation," DiBuduo cautioned. California's shrinking share of U.S. wine sales concerns him. He urged growers not to be complacent, but to "make the products to get us back our market share." He said that it's time for vineyards to prosper along with wineries. "Growers are entitled to a good return on their investment," he said.
Jon Fredrickson, a consultant and publisher of the Gomberg Fredrickson Report, showed how healthy the U.S. wine economy is. California wine shipments increased an estimated 2% from 2006 to 2007, while imports shot up by 9%, taking more than 31% of the total. Now with 11% of the world's wine consumption in volume, the U.S. appears to have passed Italy to become the No. 2 consuming market. With an estimated $30 billion in retail sales, the U.S. is already the biggest in that category.
Fredrickson listed top performing brands of 2007 in terms of growth, including Barefoot, Clos du Bois and Diageo Chateau & Estate, and named Ste. Michelle Wine Estates his 2007 Winery of the Year for sales and profit performance. The publicly traded company had $59.9 million in profit on sales in the mid-$300 million range.
Ted Baseler, president of Ste. Michelle, was on the morning's panel. He said his company's performance was due in part to creating brand sustainability. Baseler noted, "Wine has gone from being a special occasion drink to being very mainstream." But he cautioned that as profitability increases among U.S. wineries, they become more obvious targets for international competition.
Glenn Proctor of the Ciatti Company, who buys and sells bulk wine, spoke on supply and demand of grapes and wine, explaining the current state of the global bulk wine market. Australia had a short harvest in 2007 because of drought, and may have another below-average vintage this year, too, he said. California had moderate crops in 2006 and 2007. The French government has been incentivizing growers to remove vines. These and other factors have started to dry up the global glut that had growers worried, but which spawned thousands of new, inexpensive wine brands. Proctor observed that imports have continued to grow despite the weak dollar. "It means they're here to stay."
Some of the 11,500 Unified attendees ate between visits to 524 supplier booths.
The publisher of Wine & Spirits
magazine presented a snapshot of the ultra-fine wine on-premise market with his company's annual restaurant wine poll. Joshua Greene said that in high-end restaurants, tastes are changing, and are heavily influenced by restaurant staff. Greene said that diners have moved toward lighter, less rich wines between 1997 and 2006. He said wineries have opportunities to sell more very high-end, lighter style wines, but warned that some California varietals, such as "thick, chunky" Pinot Noir, send mixed messages.
The Unified Symposium is co-sponsored by the California Association of Winegrape Growers and the American Society for Enology and Viticulture. Find more details at unifiedsymposium.org