Napa, Calif. -- The weather was picture perfect; the attendees were old friends, and the stage was set Monday for an outdoor networking luncheon at the Napa Valley Marriott. But as the Dow sunk nearly 373 points Monday, erasing Friday's 368-point surge, attendees of the 2008 Wine Industry Financial Symposium were left wondering if and when the chaos would hit home.

About 200 bankers, vineyard and winery executives and service providers attended the first day of the two-day symposium, according to Waunice Orchid, conference coordinator for the Wine Industry Symposium Group, which organized the meeting. Orchid said that a session on equity and debt markets was very popular, as were back-to-back workshops on honing business succession plans.

"I'm in the accounting profession, so I like to know what's going on in the wine industry at a high level to help understand some of the accounting aspects and some of the risks," Sandy O'Shea, a CPA with Moss-Adams LLP, told Wines & Vines. "I like to look at the marketing outlook, the price of grapes and consumer trends."

A global economy

Appraiser Tony Correia hosted a popular workshop titled, "Recession? What Recession?" He opened the talk by saying the economy isn't broken -- it's global.

California isn't seeing a significant increase in vineyard acres, Correia said. So if domestic wine sales continue to grow, as they've done for the last decade, wineries inevitably will need more grapes. And when buyers can't find the quantity, quality or varietals for the prices they desire, they'll start seeking fruit elsewhere -- namely Australia, New Zealand, South America and, to a lesser extent, South Africa.

Supporting the theory is the fact that some Central Valley growers are finding it more profitable to dig up their vineyards and plant almonds, pistachios and olives, Correia said. Chardonnay prices started falling at the end of the 1990s, and they haven't really rebounded, he added. Meanwhile, vineyards in Australia are in close proximity to high-tech grape-processing centers -- and the quality is world-class. "They've really been kicked in the teeth the past few years," Correia said of the Australian wine industry. After a few years of low production and reduced market share, "There's a lot on market for very attractive pricing right now."

Across the globe in Argentina, buyers should be aware that while prime grapegrowing land is in large supply, economic stability is not. About once every decade, Correia said, the country's financial system collapses and starts up again. But for those willing to take a risk, the price is right at an exchange rate of about three Argentinean pesos per dollar.

Directly outside the symposium, on the other hand, the real estate picture is darker. At $150,000-plus per acre, the yields don't justify the cost of buying a Napa vineyard, Correia said. Crunch the numbers any way you like, he said, but the profit just isn't there until years later, when you're ready to sell and see what capital appreciation you've earned.

Since 1997, bumper crop years have bought California growers some time before winemakers go looking offshore. The hauls tend to fill tanks and slow the cycle down for a year or two, but according to Correia, vineyard developers and vegetable farmers are competing with each other up and down the Central Coast. Such farmers are driving up land values in San Luis Obispo and Santa Barbara counties, he said. To complicate things further, he said, "The berry guys will pay top dollar for land where they can grow" strawberries, blueberries and blackberries.

If you're a grower looking to sell, the best place to be is next door to a winery looking to move toward all estate-grown grapes. Otherwise, Correia said, overseas buyers who have suitcases full of euros and pounds may perceive California vineyards as being on sale, since comparatively they have a 30% bargain built into the exchange rate.

Of course, what's growing in any given vineyard plays a large role in its value. The good news, Correia said, is "We are planting the right varieties." In Napa, Cabernet Sauvignon planting grew 85% between 1995 and 2007. During the same timeframe, Sonoma County's Pinot Noir crop increased 228%.

Being on the fore of the Pinot Noir boom has worked like a check in the bank for Sonoma County. Whereas a ton of Sonoma County Pinot Noir sold for less than $2,000 per ton in 2004, it regularly nets $3,000 per ton today.

"Wine prices drive grape prices," Correia said, and Sonoma Pinot Noir is "hot as a fire cracker."