How did rap music make more people drink moscato? Should grape growers plant more vineyards with cabernet sauvignon or merlot? And how is the North Coast wine industry going to deal with the state's new frost regulations?
All were topics of discussion Thursday at the 21st annual Dollars and $ense Seminar, organized by the Sonoma County Winegrape Commission.
The conference drew about 500 grape growers and wine industry executives seeking insights into the rapidly changing market for North Coast grapes.
Grape prices have risen sharply, but wineries are only just beginning to sell bottles without discounting prices, said Brian Clements, vice president with Turrentine Brokerage, a Novato wine and grape broker.
Lighter than normal harvests, along with other factors, have reduced bulk-wine supplies to the lowest point in a decade.
Currently, there are 4 million gallons of bulk wine on the market, down from about 25 million gallons in 2002. As the supply of bulk wine tightens, wineries began paying higher prices for grapes in 2011, although they have not yet returned to peaks reached in 2008.
"This is the first time that I've been involved in a flip in the market that isn't about sales," Clements said. "This flip is about inventory. Mother Nature kind of flipped this market ... and that makes me a little nervous."
On the consumer side, there has been a resurgence of confidence. More consumers are starting to drink wine and core wine consumers have enjoyed low rates of unemployment, said Mike Colicchio, client business partner at Nielsen.
"However, when we talk to consumers and ask, &‘Is the country still in a recession?' the overwhelming majority say &‘Yes,'" Colicchio said.
Drinkers are scooping up moscato, sweet wines, red blends and unoaked chardonnay in growing numbers, Colicchio said.
"Moscato has been mentioned prominently in rap lyrics," Colicchio said. "Chilling with some moscato, hanging - okay, it works."
Although grape prices are strengthening, North Coast growers are increasingly concerned about their access to water as they scramble to comply with new rules designed to protect local fish habitat.
Growers in the Russian River watershed have until Feb. 1 to obtain state approval for a water management plan, which they can do individually or as a member of a group.
Pete Opatz, vice president of Napa-based grape grower Silverado Premium Properties, recruited growers at the trade show to join a nonprofit group to help them comply with the regulations.
"I'm optimistic that the process will fall together," said Bob Anderson, executive director of United Winegrowers for Sonoma County. "Everyone's aware of the time constraints, but I don't know if the state appreciates how difficult it is."
Nick Frey, president of the Sonoma County Winegrape Commission, said the group will hold upcoming meetings designed to help growers comply with the regulations.
"We do need to use water, conserve as much water as we can, and still protect our crops," Frey said.
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