Cultivation problems: Grape growers react to changes in the industry

North Bay growers are living through the difficult times that the wine industry is experiencing
generational change in consumption

Author: Karen Hart

Harvest is underway for North Bay grape growers and it has been an ideal growing season for the 2024 vintage, although warmer than last year. The 2024 harvest will be average or below average, which is considered a positive in the current market. Grape sales are weak this year – of all varieties – and the generational shift in wine consumption is a topic of concern. Those in the industry are feeling change and, in some cases, economic hardship. Change is in the air and grape growers are making difficult decisions.

According to the 2024 State of the U.S. Wine Industry Report, fewer Americans have been drinking wine for several years. Instead, they choose alternatives such as ready-to-drink beverages, spirits and cannabis. Or they all abstain from voting together. This is a shift in consumption that can be seen around the world.

“The generational shift is impacting our industry, with baby boomers slowing down and new generations not accelerating,” says Christian Klier, North Coast grape broker at Turrentine Brokerage. Meanwhile, the current economic situation does not help. “With lower incomes, people are buying fewer luxury items like wine. This is a global situation.”

As a result, growers are making difficult decisions. “We have already seen that 20,000 acres have been removed from the central valley and more vineyards will need to be built to find balance in the market,” Klier says, adding that there are more vineyards for sale than he has seen in 20 years.

“There is no doubt that signals from the wine sales landscape have resulted in stagnation in grape sales, especially in the spot market. However, the vast majority of growers in Napa County have long-term relationships with vineyards, and many others have diversified into producing their own wine,” says Caleb Mosley, Executive Director, Napa Valley Grapegrowers. “Proactive growers remain in close contact with their wine industry partners, discussing market realities with an eye to creating products tailored to future vintages.”

The market is difficult to read, says Glenn Proctor, a Sonoma County grower and partner at Ciatti Company, a global wine and grape broker. “We’re trying to understand where consumption patterns are going,” he says. “This is our biggest challenge. It’s difficult for the industry and difficult for growers. Buyers are currently very cautious and wary during the harvest season. We have been observing this nebulous dynamic for several years.”

Karissa Kruse, president and CEO of Sonoma County Winegrowers, says, “Sonoma County grape growers, like growers everywhere, are facing a more complex climate, rising costs and changing markets.” Moreover, he adds: “The costs of doing business are extremely difficult, especially for our smaller, family farmers. Many grape contracts with vineyards are long-term, so it is difficult to manage rapid increases in business costs in the short term.

Difficult decisions

Wine producers are wondering whether to withdraw vineyards or wait until the market stabilizes. Some breeders wonder whether to sell or stay for the long haul. “This question is specific to each operation, and there will be various discussions after harvest,” Mosley says. “We are fortunate that most growers have strong connections with their wine industry partners, and both sides are fully aware of the need for shared success. We do not expect significant changes in Napa acreage in 2025.”

“Our farmers are a tenacious group that constantly faces challenges,” Kruse says. “But make no mistake, this may be the hardest time for farmers and breeders in the history of our country,” he says, adding that many factors should be taken into account when deciding to sell or keep a vineyard. “Some of the key factors include succession planning, the ability to financially cope with market fluctuations and long-term family goals. It’s a truly personal decision and certainly never easy.”

Vineyards of the future

For those planning to weather the market slowdown, some are looking for forward-thinking wineries equipped with new technologies. “Many forward-thinking approaches have been introduced to protect against high-temperature events while preserving both fruit quality and quantity,” Mosley says, adding that automatic irrigation valves are becoming increasingly popular, allowing for accurate monitoring of water use and improved yields. “The early adoption of artificial intelligence technology has enabled wine growers to quickly determine the water deficit in vines. We are still at the beginning of adding artificial intelligence to our toolkit. However, advances in remote sensing technology, traditional cameras and data management systems are rapidly impacting our industry.”

Farm of the Future efforts led by winegrowers in Sonoma County are helping farmers adapt to an increasingly complex climate, Kruse says. “With Farm of the Future, we can pilot and create a case study on new technology or equipment,” he explains, “so we can better understand the return on investment and help growers make the best decisions for their business.”

While efficiency is a common goal for most companies, it won’t necessarily solve market changes. “There is no magic bullet here. This market does not favor a particular variety or farming practice,” says Klier. “This deterioration affects everyone. “I would say the best thing a grower can do is to introduce more mechanization in the vineyards to reduce the cost of cultivation.”

Investing in efficiency practices creates opportunities, Proctor adds. “But when you’re treading water, it’s hard to think about staying afloat.”

Demand and prices of grapes

What can growers do to ensure the highest prices and demand for their fruit? “Quality is the primary driver of prices in Napa, and our practices have evolved over the years to ensure fruit quality is optimized from vintage to vintage,” says Mosley. He adds that growers who have worked with their vineyard partners over the years to achieve stylistic goals will stand out from the rest because strong relationships and synergy always bring benefits. “Certifications and environmental stewardship efforts combined with excellence in viticulture practices are also creating demand.”

Sustainable farming practices and winemaking partnerships are also key in Sonoma County. “Grape growers in Sonoma County remain focused on sustainable agriculture, producing the highest quality grapes and investing in their relationships and partnerships with vineyards,” Kruse says.

“In this business, relationships and reputation matter,” adds Proctor. “When wineries come back and buy from growers, they will be looking for a good reputation with those with whom they have had the best partnerships and relationships in the past.”

Adds Klier: “Wineries are looking for great partners who grow high-quality fruit and are easy to work with. Your current grape buyers are your best bet in a slow market.

The future of grape growing

As the harvest season continues and North Bay growers grapple with a changing market, there is hope for the future. “Wine has always been the beverage of choice when it comes to enhancing a meal,” says Proctor. “Wine will always be around. This makes me optimistic for the future.”

While everyone in the industry adapts to a changing market, Napa growers remain focused on quality. “We owe an enormous debt of gratitude to the visionaries who helped establish Napa Valley as one of the best-growing regions in the world,” says Mosley. “We will continue to take a proactive approach, doing everything we can to help our members get through these difficult times.”

Kruse sees an opportunity for people working in the wine industry. “A more competitive market with changing trends, especially among younger demographics, is not insurmountable, but rather an opportunity for the wine industry to be more creative, innovative and relevant. Wine is one of the most unique products in the world. Each bottle represents a place, a time, the character of the farmer and the style of the winemaker.”

In the meantime, Klier offers growers practical advice for the short term. “Reduce waste as best you can without sacrificing quality,” he says. “Mechanize as much as wineries allow and try to control production costs. Adapt to your current buyers and strive to develop long-term relationships that will help you weather good and bad times in the market.

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Karen Hart

Karen Hart is a freelance writer who has been writing about wine and the wine business for almost 15 years. She lives in Sonoma County and always appreciates a glass of good North Coast wine. Contact her at [email protected].