Wine symposium brings experts together
For the second year in a row, Wine and Roses hosted the Lodi Wine Symposium, giving growers, winemakers and other professionals a chance to meet one another, share their experiences in the business and develop plans to ensure the continuing prosperity of one of Lodi’s most profitable industries.
Joe Petersen, a broker with the real estate firm Petersen and Company, which specializes in agriculture, summed it up his State of the Land presentation: “Lodi is in a good place. It’s got good water, good climate and great soil. It’s almost undervalued.”
But despite the ideal growing conditions, Lodi’s wineries are not without concerns for the future.
“Labor has created pressures that we’ve never seen before,” Petersen said, explaining that labor is one of the biggest costs for wineries in Lodi.
While the minimum wage increase from $10 to $15 per hour by 2023 is expected to raise those costs, Petersen said, the full extent of that impact is unknown.
The price of grapes has remained largely stagnant since 2002, he said, even dropping for some varieties. At the same time, the costs of fuel, electricity and labor have increased.
John Primasing, vice president and chief credit officer at the Bank of Stockton, also spoke during the State of the Land presentation, summarizing the vernal pool issue.
A vernal pool is an indentation in the ground that gathers water, he said. These pools frequently become breeding grounds for fairy shrimp, a freshwater crustacean found almost exclusively in vernal pools throughout California and Oregon that is listed as a threatened species.
As a result, no farming is permitted on lands near vernal pools, Primasing said.
Many vineyards south of Lodi have recently been converted to almond orchards, he added, decreasing the amount of competition in the wine industry.
“A healthy wine industry is extremely good for Lodi,” he said. “This is an ag town — agriculture is who we are.”
Some winemakers are switching to nuts because they pay more per acre and require less money, said Paul Scotto, director of winemaking for Scotto Cellars.
This could actually help Lodi’s wine industry, as growers and winemakers are able to get more value for their wine due to the decreased supply, he said.
One of the topics discussed throughout the symposium was how to increase Lodi’s national recognition as a wine area, encouraging customers to pay more for the area’s wines.
More income from wine sales means more money to spend on grapes, Scotto said, which is especially important for winemakers such as Scotto Cellars who do not grow their own grapes.
Craig Ledbetter, partner and vice president of sales for Vino Farms, particularly enjoyed the Nielsen data information presented earlier in the day.
“It correlates to what we’re doing to promote Lodi,” he said. A shared goals among wineries and growers is to increase the value of the grapes, as well as convincing more wineries to put Lodi’s name on their labels, he said.
Vineyards in the area used to cost between $15,000 and $16,000 per acre in the 1990s, Ledbetter said. They now typically cost between $27,000 and $28,000 per acre. As the value of the land increases, he said, so does the net value for the growers.
Following a complimentary lunch, Erica Moyer and Marc Cuneo of Turrentine Brokerage, a wine wholesaler and importer, presented on the State of the Grapes.
Moyer, a partner with Turrentine, began by discussing the recent migration of wineries from the North and Central Coast regions of California to Lodi and the Delta, citing increased land costs along the coast as a primary reason for the migration.
Lodi wineries have been focusing more of their efforts on producing quality wines as opposed to large quantities, said Cuneo, a bulk wine broker.
“The buyers are willing to pay more money for a quality wine,” he said.
The demand for low-end wines has decreased recently, according to Cuneo. But many Lodi wineries are beginning to sell their bulk wines as a sort of “pressure release valve” to make room for the upcoming 2017 grape harvest, Moyers added.
The duo broke down the data by different wine varietals.
Chardonnay has decreased in volume since 2015, nearly reaching the same levels as the 2012 wine recession, which has generated a renewed interest on the bulk market, Cuneo said.
Meanwhile, Chardonnay accounts for 20 percent of sales, Moyer said, and the rise in Chardonnay prices last year is expected to continue through 2017.
There is a solid demand for Pinot Noir, Cuneo said, but the demand for Pinot Grigio on the bulk market has not increased in a while.
Red Zinfandel was a hot commodity on the bulk market in 2012, he added, but the varietal has faced challenges since then, with some wines from 2013 and 2014 still held by their respective wineries.
With Zinfandels slowing down, Lodi wineries and growers have been moving to Cabernet Sauvignon, as there is an abundance of grapes available for the latter varietal, he said.
Merlot has had a relatively stable market, but has been recently fighting with sweeter, darker wines for space on the bulk market, according to Cuneo.
The market seems to prefer the sweeter, more colorful reds, Moyers said.
Other panels included a discussion of a local industry survey and its results, expanding Lodi’s brand power in the wine marketplace, local takes on grower rights, regulations and other topics, and planning for the future, including succession planning.
The day wrapped up with wine tasting.