Those in the grape and wine business know that it's full of challenges and risks, and the current situation provides some good examples.
To no one's surprise, the 2014 grape crop was down from the previous year, by 9% to 188,000 tons, with the value of utilized production down 7% to $69.4 million. But some perspective: The 2013 crop was the largest on record, so things are not nearly as dismal as they might seem; in fact, a smaller 2014 crop provided a good balance in terms of supply and demand.
And among fruit crops, grapes fared quite well compared with apples (down 11% in volume), peaches (14%), strawberries (16%), tart cherries (17%), sweet cherries (40%), and pears (52%). Only blueberries improved (up 66%), but that was over the smallest crop in history the year before. It's all a vivid reminder that Nature is in charge.
And out in the market, the consumer is in charge. This week the Wine Market Council, the foremost organization for research on trends in wine consumption, hosted its annual conference to divulge the latest as presented by WMC President John Gillespie and Danny Brager of The Nielsen Company.
Among many valuable insights was that the explosion of craft beers is primarily cannabalizing market share from the large traditional brews, but may also be eroding interest in inexpensive "entry level" wines below $10, particularly among the younger wave of "Millennial" consumers who have less discretionary income than their older brothers and sisters due to changes in the American economy following the 2008 crash.
This is not a doomsday scenario for wine, just the latest example of the fact that the only constant in life (and wine) is change. Therefore, we must adapt to survive. A couple decades ago the Zinfandel grape in California was on life support until Sutter Home created a "White Zindandel", spawning a totally new category of sweet pink wine called Blush which exploded in the market and has now given way to Dry Rose. In New York and nationwide, wine has certainly been the original farm-based craft beverage, but with its continuing success it's no surprise that entrepreneurs are now adopting the model for craft beer, spirits and cider. Imitation is the sincerest form of flattery!
Even growth within the wine industry, a great thing(!), has its own set of challenges. Once again, a core of pioneering entrepreneurs invested their money and dreams in the risky business of wine, building a following for their brands and interest in their regions. Seeing their success, others then followed but in many cases have not made a commensurate contribution to the common good, instead benefiting from the existing consumer base. In other words, the number of wineries has increased substantially, but the number of tourists, while up also, has grown more slowly. We need a bigger pie.
In my view, the creation of other craft beverages and the growth within the wine industry are opportunities, not problems. We are generating more investment, jobs, tourism, taxes, and quality of life. Now we just need to be creative and resourceful in successfully adapting to change. We've done it before, and we can do it again.
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