Wine report editor predicts tough year for smaller wineries

Increased competition from imports and inexpensive "super value" wines could equal tough times for Lodi's small- and medium-sized wineries in the coming year, the editor of a national wine industry publication said Tuesday.

The wine industry's recent downturn is likely to continue until 2005, Rich Cartiere, editor and publisher of The Wine Market Report, told a group of more than 400 at a luncheon during the 52nd annual Grape Day at Hutchins Street Square.

An influx of moderately priced wines from Australia and other countries and inexpensive labels such as Charles Shaw's "Two Buck Chuck" has left a smaller market for which remaining wineries can compete.

Also hurting smaller wineries is the trend of large superstores such as Costco and Wal-Mart proliferating across North America, Cartiere told those attending the event co-sponsored by the Lodi Chamber of Commerce and the University of California Cooperative Extension. The larger retailers choose to deal with fewer distributors when purchasing products, which can leave wineries without a large distributor off store shelves.

"Wal-Mart says it will have 30 percent of wine sales in the next 10 years," Cartiere said.

Cartiere was the keynote speaker at the event, which featured seminars on issues affecting the grape industry, and tastings with local wineries. Grape growers and vintners from across the San Joaquin Valley turned out for sessions covering such topics as grapevine viruses, weed control and detection of the vine mealybug.

The most controversial of the seminars concerned a regulation recently levied on farmers across the state which requires irrigated farms to test water runoff for pesticides and other potential pollutants. Agriculture had previously been exempt from such regulations, which have been required of other industries for years, said John Meek, president of the San Joaquin County Resource Conservation District.

Meek told the hundreds of growers in attendance that they either had to participate in a coalition -- which would charge $1 per acre to hire consultants to perform the testing -- or they could opt out, which meant performing the complex testing on their own. The second option would require farmers to draw up an elaborate plan on how monitoring and testing would be performed, or else hire someone from the outside.

Either way, outside help would be required, though opting out of a coalition would likely end up costing more, Meek said.

"They don't expect us to run out there with a glass and take water samples," Meek said. "You would probably have to hire a water testing company to come out and take the samples."

After the seminars, a wine tasting session featuring Lodi-area wineries was held, followed by the luncheon and Cartiere's speech. The multimedia presentation featured video clips of commercials selling pizza, cell phones and beer -- advertisements he said illustrated a direction in which the wine industry could go in order to improve sales.

While the wine industry maintains a mystique that most people don't identify with, Cartiere said, other businesses use sex and humor in product advertisements with success. Round Table Pizza inadvertently showed how successful such tactics could be for wineries when commercials for its Napa variety of pizzas -- which featured an "Average Joe"-type poking fun at stuffy wine snobs -- resulted in an increase in wine sales.

"Wine sales took off," Cartiere said. "(The ads) increased wine sales by 30 percent without even thinking about it."

Not all of Cartiere's forecast spelled doom for the industry's immediate future. Experts expect the industry to begin a recovery in 2005, and studies have shown an increase in both per capita wine consumption among adults and popularity among people ages 21 to 28.

"If this generation takes to wine very quickly, perhaps there is some growth to come (for the industry)," he said.

Contact Business Editor Greg Kane at gregk@lodinews.com.

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