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Lodi’s amazing opportunity for trade with China

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Posted: Wednesday, July 31, 2013 12:00 am

After 20 years in law enforcement, I am sensitive to the need for adequate police, court and prison resources.

And I am keenly aware of the crime that infects Stockton and other communities.

But I guess, like everyone, my opinions have been shaped by the sum of my life’s experiences.

Maybe that is why I believe in another solution: Create more private sector jobs. How? By developing a comprehensive plan to dramatically increase the exportation of a variety of value-added agriculture, with branded wine (not just selling grapes or bulk juice) being a great lead example. It is estimated that an increase in exports by $1 billion can create 5,400 to 12,000 local jobs.

Considering that the already-at-full-capacity Port of Oakland currently exports approximately $6 billion a year in agricultural exports, creating 5,400 new local jobs is a very reasonable and achievable goal. We are so fortunate to have the deep-water Port of Stockton — with lots of room to grow, an international airport and the world’s greatest agricultural land — within our reach.

We have all the pieces of the puzzle, we just need to put them together.

According to the California Wine Institute, U.S. wine exports — 90 percent from California — reached $1.43 billion in winery revenues in 2012, up 2.6 percent compared to the previous year and a gain for the third consecutive year.

Of the top markets for California wines, the European Union’s 27-member countries are the largest, accounting for $485 million. Hong Kong was at $115 million, and China was at $74 million.

Other than those in the wine industry, who cares? And since China is not even California’s largest wine export market (yet), why should the local media constantly bombard us with stories of visiting Chinese delegations coming to Lodi? I thought you would never ask.

China is already the second-largest economy in the world. Over the next 15 years, regardless of all its challenges, it is still expected that 500 million Chinese citizens will enter the middle class. In comparison, the entire population of the United States is around 316 million.

China has over 20 percent of the world’s population, yet only has 9 percent of the world’s arable land. They need food, we need jobs. Thank God for Lodi’s superior soil, and its unique Delta breeze-influenced climate.

Craig Watts, owner of Upstream/Watts Winery, says that thanks to a coordinated effort, the Lodi brand has reached a level of maturity that can benefit all local wineries and other local commodities as they seek to go international, whether that be in China or elsewhere.

“The world is getting smaller,” he said, “while the opportunities are getting bigger for Lodi.”

“Maybe it is the result of hard work starting to pay off that our expansion plans and our exports to Hong Kong and mainland China are taking off at the same time.” That’s Layne Montgomery, founding partner and winemaker for M2 Winery, on his plans to move from the current 3,600-square-foot facility on Turner Road to a new facility on Peltier that will be over twice as large.

“My recent sales trip experience to Guangzhou with my Chinese distributor was both very fun and quite profitable,” Montgomery said. “We anticipate that this relationship will continue to bring M2 benefit, while at the same time doing our small part to help Lodi move some more grapes.”

Just how many grapes are we talking about? Chinese buyers typically buy an ocean container-load at a time. A 40-foot container can hold about 14,400 bottles of wine, which, depending on a vineyard’s yield, roughly equates to approximately 3.5 acres of grapes, according to Dave Pechan, owner of Miramont Estate Vineyards.

Keep in mind that Lodi has 100,000 acres of grapes it has to sell each and every year.

Jon Gianini is the director of business development for W.J. Byrnes & Co. Headquartered in San Bruno. They have essentially been “travel agents for international cargo” since 1907.

According to Jon, the future economic outlook for our region is bright.

“California agriculture’s reputation abroad is unparalleled and undeniably favorable all over the world,” he said. “A combination of factors have led to W.J. Byrnes becoming more involved in the Lodi region in the past few years. For example, the Port of Stockton’s new M-580 marine highway offers an efficient and green alternative to traditional logistics for the region’s importers and exporters, and we certainly see a promising impact to the region’s economy. I am personally traveling to China next month to help forge even more relationships for California. Along with some of the absolute finest olive oil in the world, I will proudly be taking some Lodi wine with me for gifts.” Thank you, Jon!

According to the United Nations World Tourism Organization, Chinese travelers are now the kings of tourism. They spent a record $102 billion USD on international tourism in 2012, a 40-percent rise from $73 billion in 2011.

Paige Geweke, sales manager for the Hampton Inn and Suites in Lodi, helps bring these huge global numbers into a better local perspective.

“We have had the pleasure of hosting several international delegations from China. Therefore, we’ve been fortunate enough to experience the impact of this firsthand,” she said. “As a manager, it really hits close to home when I see one of these groups arriving, and gratefully realize that we can schedule a few extra housekeepers or front desk agents during that given stay.”

As for my own personal efforts to contribute to the local economy? Well, I have been known to take as many as 40 international guests at a time to my “office” at the Velvet Grill for either real American pancakes or the world’s finest homemade ice cream.

I call that “shopping local.”

Frank Gayaldo can be reached at frank@gayaldointernational.com.

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  • Frank Gayaldo posted at 11:01 am on Wed, Jul 31, 2013.

    Frank Gayaldo Posts: 26

    For good or for bad, globalization is not going away. China is already the largest luxury market in the world. The perception that Chinese consumers only want to buy cheap wines is highly inaccurate. While certainly medium and large Lodi wineries have a great opportunity in China and other international markets, there are now a significant number of very small family-owned Lodi wineries that are exporting up to 50% of their wine abroad. Something that was totally unheard of just a few years ago. Wine imports into the United States is a concern, which is all the more reason we must succeed at exporting. Bottom line? Look for "Lodi on the Label".

  • Ted Lauchland posted at 10:50 am on Wed, Jul 31, 2013.

    Ted Lauchland Posts: 261

    You really want me to explain it to you?

    "Lodi" on the label means Lodi grapes or the majority of Lodi grapes were used. I do not remember the required percentages as is also a blended requirement for different varieties.

    Large companies own acreages in Lodi and outside of Lodi. They also purchase grapes inside and outside of Lodi to suit a targeted quality and price range.

    Small wineries sometimes own many varieties on a small scale to suite a lesser volume movement but to satisfy the wine buyers interest. Lodi specializes in Zinfandel along with many other varieties.

    Lodi has quality and the key is putting "Lodi" on the label. Individual growers also have a following. Many small wineries produce more grapes than they can make wine out of and so cash flow is necessary and sell the grapes to another entity not limited to the big guys but markets back east or overseas or each other.

    Specific variety trends and a mid-market range has put Lodi on the map.

    Lodi has it's climate and soil boundaries but it's label does not. Delicato for instance is in Manteca but is an excellent representative for Lodi wines.

  • Josh Morgan posted at 9:23 am on Wed, Jul 31, 2013.

    Josh Morgan Posts: 542

    Doug: "just what are the other great Lodi wines?"

    Lucas, Harney Lane, Heritage Oak, Lange Twins, Maccia (best Zins around) and Van Ruiten just to name a few.

    I've had any number of friends call me from all over the country telling me they found Lodi wines in a restaurant they were patronizing. Lodi grapes are also being shipped to Napa and being used in their wines.

    Doug, my question to you is, who are the local wineries that use "cheap South American grape juice" in lieu of their own grapes?

  • Doug Chaney posted at 5:43 am on Wed, Jul 31, 2013.

    advocate Posts: 502

    China loves cheap wines. Perhaps that's why they like many Lodi wines? Other than Michael David and Mondavi, just what are the other great Lodi wines?

  • Doug Chaney posted at 5:40 am on Wed, Jul 31, 2013.

    advocate Posts: 502

    You mean the many wineries that sell their crops for cash and then produce wines with cheap South American grape juice here in the Lodi area?


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