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THURSDAY THORNS
12/04/2014
Sonoma State Spills The Beans About The Wine Business

By Stephen Eliot

We may not buy and sell wine, and public relations, advertising and marketing are not our niches either, but we still see ourselves as part of the wine business all the same, and, over the last forty years, we have watched that business grow in ways no one could predict. The wines that are offered and the ways in which they are made have changed, and the very big business of wine has become ever more complex as the decades have passed. The latter point was driven home a couple of weeks back when I accepted an invitation to sit in on a seminar and panel presentation at Sonoma State University that was intriguingly titled “Wine Trends: What’s Hot and What’s Not.”

It is worth noting that Sonoma State was the first university in America to offer undergraduate and graduate degrees focused exclusively on the business aspects of wine, and its Wine Business Institute, under whose aegis the discussion of wine trends was conducted, now provides a full range of both degree and seminar programs that aim to meet the needs of most everyone who aspires to succeed in the wine industry.

On this particular afternoon, a panel of industry veterans moderated by writer/consultant Liza Zimmerman offered their thoughts about various aspects of the wine industry in 2014 and, appropriate to the business environment, backed up those views with data galore. I drove up Highway 101 without pressing questions in mind, and I did not anticipate any revelatory insights would be gained. My real curiosity and interest lie in discovering just what the assembled professionals would think was worth talking about when invited to speak. And, as is occasionally the case when listening to bright people who have something to say, I was pleased to find answers to worthwhile questions that I had not thought to ask.

I was pleasantly surprised by Peggy Gsell’s presentation of Nielsen findings that the market for wines priced at $20.00 and higher showed far and away the greatest growth over the last year despite internet grumblings that economy-stressed consumers were turning their backs on finer wines. That the Sonoma Coast, Russian River Valley, Paso Robles and Lodi appellations exhibited strong growth was expected, but Carneros surprised with a healthy increase, and I found the two-year slide in sales from Santa Barbara County wholly unexpected.

Jim Gordon of Wines and Vines Magazine spoke succinctly of the significant rise in direct-to-consumer sales on the part of a good many wineries, and Nielsen’s numbers suggesting that some 45% of Napa Valley wine revenue now came from consumer-direct sales was nothing less than a shock. It seems that there are reasons that so many noteworthy wines are getting harder and harder to find on retailers’ shelves.

There were panel predictions regarding an increase in red blends owing to a new generation of wine drinkers who were less concerned about varietal labeling, and there was general agreement that prices could be expected to rise despite the ample supply of wines from the sizeable 2012 and 2013 vintages; on the low end because of cost and on the high end due to demand.

My real take-away from the day is that wine, however artful, is still a business; a business that comes with the need for knowledge and one with no guarantees regardless of just how good the stuff in the bottle may be. The wine world has changed, much for the better if you look at the astonishing range and numbers of fine bottles to be had, but the session underscored the fact that wine has become a complicated and highly competitive affair.

I suppose, in the end, that I found those who were listening as interesting as those who were speaking. Those in attendance ran from seasoned professionals to neophytes; from tasting room managers and grape-growers to CPAs and marketing specialists with no wine experience whatsoever, and the receptive room full of students left me convinced that there are plenty of motivated folks who are willing to study and do the work that real success demands.


 

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