California Wineries Press On

By Dutton, Gail | Management Review, May 1997 | Go to article overview

California Wineries Press On


Dutton, Gail, Management Review


Lately, it's clear that off-hours nothing beats a fine Chardonnay, a rich Merlot or a fruity Zinfandel. In fact, premium wines have shown an annual compounded growth rate of 15 percent since the early 1980s, the Wine Institute reports, and account for 67 percent of California table wine sales and 41 percent of sales volume. The increase is due largely to shifts in population demographics.

"Baby boomers are entering middle age, slowing down and becoming more health-conscious," says Carolyn Martini, president and CEO of Louis M. Martini Winery. "Many have realized that `there is only one CEO in the company and it won't be me.' So they're taking more interest in life outside of work. Wine is part of the civilizing of a nation."

And California wineries are ushering in the civilization with a spurt of promotion and new production. "Every time there's a tasting, California wines are taking first, second, fourth ... place," says Ed Everett, president of New World Wines, an importer, distributor and marketing agent. "California is at the cutting edge. There's a lot of experimentation, and they have some of the best equipment and vineyard practices in the world." As wine consultant Henry Bishop of Bishop, L'Evecque & Vescovo Wine Consulting attests, "There's rarely a bad vintage." The last time one was bottled was "...maybe 1972," he says.

According to Everett, "Quality worldwide is improving dramatically. Even the cheap wines are vastly better today than they were 20 years ago -- especially in the $5 to $10 bottle range." He's right. For the past 15 years, consumers have been switching from generic jug wines to premium wines -- those in the $3 to $7 per 750 milliliters range -- and to super premiums in the $7 to $14 price range. The reason is the increasing knowledge -- on behalf of the winemakers and the wine-drinking consumers -- regarding both the vines and the wine-making process and the speed at which information flows today.

Meanwhile, California is working its way to market dominance. There is much experimentation coming from its vineyards, with varieties of grape stock, planting densities and orientation to the sun. At Carneros Creek Winery, "we've cloned a variety of pinot noir (grape) with the University of California at Davis and have developed 20 different selections between 1974 and 1986," says William Bishop, director of marketing and sales. Seven of those selections were planted in the vineyards.

The question is how many pounds of grapes per acre can ripen and make high-quality wines. "The standard planting has been 8 feet between vines and 12 feet between rows. Now we have 3 feet between vines and 8 feet between rows and have doubled the number of vines per acre from 570 to 1,140 for some varieties of grapes," he explains. "We use two, three or four clones to create a style (in this case, Fleur de Carneros Pinot Noir), and can vary the mixture to account for climactic changes that affect the grapes and so keep the taste of the wine consistent from year to year."

The Byron Vineyard & Winery, north of Santa Barbara, has developed similar experimental vineyard techniques but uses vertical (rather than horizontal) trellis, and rows that run north to south rather than east to west. Sixty acres are devoted to research. Likewise, Monticello Vineyards in Napa Valley engages in fruit thinning -- removing half the grapes before they are ripe in order to concentrate the flavors of the remaining pinot noir grapes. The cut grapes are dropped on the ground where they dry and eventually work back into the soil.

Even with these changes, there remains a shortage of grapes that will affect the availability of wines throughout the United States. California holds a 75 percent share of the U.S. wine market. Vineyards have nearly finished replacing the vines that were affected by phylloxera in the late 1980s with hardier, disease-resistant vines. But, at a replanting rate of about 10 to 15 acres per vineyard per year, it takes several years to completely replant and also requires at least three years for the vines to produce grapes capable of being used for quality wines. …

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