Outside Napa, Wine-Grape Growers Fight for Survival

Wine grape growers are being split into two classes in California, an industry official warned.

“California is moving toward two distinct markets--varietals as a commodity, like corn, and varietals as a specialty crop,” said John Ledbetter, chairman of the California Assn. of Winegrape Growers.

Ledbetter was illustrating the wide differences in perception, problems and profits between coastal growers, whose specialty grapes are in strong demand, and San Joaquin Valley growers, whose jug wine varieties bring much lower prices.

“Thirty percent of the growers get more than 50% of the price; the other 70% get less than 50%,” Ledbetter told a state Senate Select Committee on California’s Wine Industry.

Other speakers cited specific problems that seem to underline differences among wine-grape growers in various state regions.

Poorest Situation

The poorest situation for wine-grape growers is in the southern San Joaquin Valley. Robert Denney, chairman of the fledgling San Joaquin Winegrape Growers Assn., said varieties in that region generally do not bring enough revenue to cover costs.

“In Napa and Sonoma, there are literally hundreds of small wineries competing,” Denney said. “In the south (San Joaquin) valley, there are hundreds of producers and only a few buyers, so there is much less opportunity for a true market to be created.”

He also expressed concern with “the current consumer perception” that coastal premium wine grapes are far superior to valley wine grapes. He pointed out that valley grapes often are blended with the more desired and more expensive varietals.

“The consumer trend today is toward products that have a premium perception,” Denney added. “The consumer is asking for Cabernet Sauvignon instead of burgundy; Chardonnay is replacing chablis and white Zinfandel has replaced the traditional rose.”

As a result, 31% of the southern valley’s wine grapes, largely French Colombard, have been yanked out in the last five years, he said.

Other growers have grafted more popular varietals onto their vines, but “the trouble is that is a costly business, and there’s not a lot of capital left in the industry to do that,” Denney said.

Joseph Jackson of Kingsburg urged more research to discover byproducts from wine and vines and bemoaned the difficulty growers have in getting preharvest contracts with the few buyers.

The sense that wine grape growers are failing fast dissipated after hearing from farmers from farther north, even as close as 100 to 200 miles away in the Lodi region at the head of the San Joaquin Valley.

At least 75% of the wine grapes in that area are “in the jug wine category and could be sold this year at below costs of production,” said Richard Watts of the Lodi District Grape Growers Assn.

“The good news is that the district has been discovered by several major premium wineries, and demand for premium varietal grapes is strong,” Watts added. “This transition from jug wine grapes to premium varietals is extremely time-consuming and expensive.”

Other Worries

Growers on the coast may have desired varietals, but they have other worries.

Richard Smith of Monterey County and secretary of the Winegrape Assn. is worried that there is not enough data available on wine sales and inventory so farmers can figure out whether wineries are offering fair prices.

Even some growers on the North Coast, considered the nation’s premier wine region, face an image problem unless they are in the Napa Valley, said Brian Gebhart of Sonoma County Grape Growers Assn.

“The reality is your palate and your personal taste,” Gebhart said. “The marketplace has dictated that Napa is king.”