It’s not that consumers are drinking less – it’s that they’re drinking less expensive wines and liquors, as we’ve reported in brandchannel.
That fact of economic life is causing a great deal of stress in California’s wine country. While France and Italy seem capable of producing “inexpensive young table blends,” California can’t compete. It’s not that they don’t want to – it’s just not economically feasible.
Jason Haas of Tablas Creek Vineyard tells The New York Times, “We realized that just to break even with our farming costs we would need to sell the wine on the wholesale market for about $20 if it were white, $25 if it were red, just to cover the costs of production.” Haas pointed out that in Europe, vineyards are handed down through generations, so the land is “long paid for.” In California, the land and development to turn it into a vineyard might cost as much as $20,000 per acre.[more]
While cheaper California wines exist on the market, they are typically mass produced or of such low quality that they aren’t taken seriously. Some California vintners are now exploring less expensive table wines made from “less fashionable varieties like carignane, grenache and petite sirah, from less fashionable places like Lodi and Mendocino.”
Still, in order for wines to be priced on the low end, it requires “high yields and low-cost mechanized production, both enemies of wine quality.” So until the economy improves and consumers start drinking wines over $15 a bottle again, California winemakers may have to just tough it out.