Pan­demic sours wine in­dus­try

Coro­n­avirus dis­rupts every­thing from grape farms to ta­ble.

Orlando Sentinel - - Front Page - By Eric Asi­mov

Ann Krae­mer’s vine­yard, Shake Ridge Ranch, cov­ers 46 acres of rocky hill­sides near Sut­ter Creek, in the Sierra Foothills of Cal­i­for­nia.

Krae­mer takes scrupu­lous care of the vines, farm­ing or­gan­i­cally and main­tain­ing a per­ma­nent cover crop on the well-drained basalt soils. The grapes, in­clud­ing zin­fan­del, Gre­nache, bar­bera, syrah, tem­pranillo and pe­tite sirah, have for years been in high de­mand.

Or­di­nar­ily, she sells to roughly two dozen wine­mak­ers, in­clud­ing in­flu­en­tial old­guard pro­duc­ers such as Steve Ed­munds of Ed­munds St. John, and an ar­ray of in-de­mand, new-wave wine­mak­ers such as An­gela Os­borne of A Trib­ute to Grace and Hardy Wal­lace of Dirty & Rowdy. Krae­mer has a wait­ing list of new cus­tomers.

But this year is dif­fer­ent. The coro­n­avirus pan­demic has jolted the Amer­i­can wine in­dus­try across the board, af­fect­ing each el­e­ment all the way back to the source, the farm­ers who grow the grapes.

For many grow­ers, the year has been thrown into tur­moil.

At this point in an or­di­nary sea­son, buy­ing ar­range­ments have largely been made based on winer­ies’ pro­duc­tion pro­jec­tions.

But the dis­rup­tion in sales, whether caused by restau­rant clos­ings, dis­tri­bu­tion slow­downs or the in­abil­ity to make mar­ket­ing trips, has forced many wine­mak­ers to reeval­u­ate their ar­range­ments for 2020.

Some are plan­ning to cut pro­duc­tion be­cause their in­ven­tory is over­flow­ing with un­sold bot­tles. Oth­ers see the mar­ket shrink­ing in the fu­ture de­spite mo­men­tary sales spikes as the nov­elty of locked­down life wears off. And many small pro­duc­ers, whose sales this year fi­nance the next year’s pro­duc­tion, lack the cash to buy as many grapes in 2020 as they had wanted.

Krae­mer has talked to many of her cus­tomers, and un­der­stands their plight. They have dis­cussed cut­ting prices, de­lay­ing sched­uled pay­ments and re­duc­ing grape or­ders.

“They’re small, they’re suc­cess­ful, but they’re still strug­gling,” she said of the winer­ies that buy her grapes. “I love th­ese guys and gals. At the same time, I don’t want to end up with a bunch of fruit. I re­ally don’t know.”

In the pop­u­lar imag­i­na­tion, a win­ery grows grapes in its own vine­yard and trans­forms them into wine. That sim­ple setup is of­ten true, and for many in the wine busi­ness it rep­re­sents the ideal.

But mak­ing wine is just as of­ten a far more com­pli­cated sce­nario in which grape grow­ing and wine pro­duc­tion op­er­ate as sep­a­rate en­ti­ties.

Es­pe­cially for younger wine­mak­ers who have not in­her­ited vine­yards or made a for­tune in other busi­nesses, buy­ing vine­yard land is of­ten out of the ques­tion. Real es­tate prices are too high.

In­stead, they buy grapes, in­vest­ing in long-term re­la­tion­ships to as­sure a steady sup­ply. Of­ten, roles over­lap.

Wine­mak­ers may ar­range to take over the man­age­ment of a vine­yard and farm it them­selves, even though they don’t

own it. And vine­yard own­ers such as Krae­mer may make a lit­tle wine as a side busi­ness.

In the Ap­ple­gate Val­ley of south­ern Ore­gon, Herb Quady also does some of every­thing. He owns a vine­yard, sells grapes and makes wine un­der the la­bel Quady North.

His com­pany, Ap­ple­gate Vine­yard Man­age­ment, man­ages the farm­ing at a num­ber of small vine­yards. He owns a cus­tom-crush op­er­a­tion, Bar­rel 42, where clients can use equip­ment and the fa­cil­ity to make wine.

He has had dis­cus­sions with his grape-buy­ing cus­tomers and said that, with an ex­cep­tion or two, hardly any­body is pro­ceed­ing with busi­ness as usual.

“Ev­ery­body wants to stay in­volved, but they’re cut­ting back some,” he said. “It makes sense to cut back if you are wor­ried about cash. We all sort of do that, but it be­comes a crisis when they all do that at once.”

Bri­anne Day of Day Wines in the Wil­lamette Val­ley is one of Quady’s cus­tomers. She makes a wide ar­ray of wines, buy­ing grapes from sources through­out Ore­gon. She hopes to keep her pro­duc­tion steady in 2020, mak­ing the same num­ber of bot­tles but with a few ad­just­ments.

“I am go­ing to fo­cus my ef­forts on grow­ing the wines that are in very high de­mand, and rein my­self in on my flights of fancy,” she said.

In the Rus­sian River Val­ley of Sonoma County, Steve Dut­ton and the Dut­ton

fam­ily farm Dut­ton Ranch, some 1,200 acres, mostly pinot noir and chardon­nay, and work with about 70 winer­ies that buy grapes.

Dut­ton, who also makes wine at Dut­ton-Gold­field, knows that many of them are con­cerned, but ex­pects to be able to sell all the Dut­ton grapes, in part by be­ing flex­i­ble.

“We’re work­ing with them to try to come up with a plan to make sure we don’t over-de­liver, or we cut prices,” he said. “We’re in it with them, that’s for sure.”Ben Merz is a part­ner at Coastal Vine­yard Care As­so­ciates in Buell­ton, Cal­i­for­nia, in the heart of the Santa Bar­bara wine re­gion, which man­ages more than 4,000 acres of vine­yards. It also serves as a con­duit be­tween grow­ers and buy­ers for the grapes.

Many pro­duc­ers in Santa Bar­bara de­pend on tourism to sell wine, he said. But winer­ies and tast­ing rooms are closed to tourists for now, with no prospects as of yet for re­open­ing. As a re­sult, Merz and his clients are dis­cussing some dif­fi­cult so­lu­tions, in­clud­ing not har­vest­ing parts of some vine­yards.

“For some clients, al­low­ing cer­tain less-pre­ferred blocks to go fal­low this year is the an­swer,” he said. “For oth­ers, it is yield man­age­ment (or) farm­ing cer­tain va­ri­eties and not oth­ers. And for some it is more mech­a­niza­tion and less hand farm­ing. There is no one-size-fits-all an­swer, but we are do­ing every­thing we can to help sus­tain our clients’ busi­nesses.”

For many farm­ers, let­ting a vine­yard sec­tion go fal­low is a short-term, money-sav­ing so­lu­tion that can have long-term con­se­quences.

“If you let it go, it be­comes re­ally ex­pen­sive to bring that back,” Quady said. “And you run the risk of caus­ing prob­lems for the rest of your vine­yard.”

If things don’t turn around, other pos­si­ble op­tions for grow­ers in­clude sell­ing grapes in­tended for small winer­ies in­stead to bulk wine pro­duc­ers or large com­pa­nies hop­ing to im­prove their blend. Some farm­ers may even lease por­tions of their vine­yards to larger com­pa­nies to farm them­selves.

Doug Margerum of Margerum Wine Co. is one of Coastal’s clients. Margerum, a veteran of the Santa Bar­bara wine in­dus­try, grows about 25% of the grapes he needs at his own vine­yard and buys the rest.

Much of the wine he sells has been through restau­rants and a new tast­ing room, which opened in May in a de­vel­op­ing part of Santa Bar­bara known as the “Funk Zone.”

“It was just killing it, and then March 16 came and we had to close it,” he said.

Margerum Wine Co. has tried to swivel toward di­rect-to-con­sumer sales. Margerum said he has re­lied on the help of his 24-year-old son, Remy, to de­vise in­ter­net sales strategies, but still he’s an­tic­i­pat­ing changes.

“We’re not go­ing to make as much wine as we did, and we’re not go­ing to buy as many grapes as we do,” Margerum said. “We know it’s go­ing to end at some point, and we’re not go­ing out of busi­ness. But it forces us to fo­cus a lit­tle more on what we do and how we do it.”


Ann Krae­mer prunes vines on her 46-acre vine­yard Shake Ridge Ranch, in Sut­ter Creek, Cal­i­for­nia.


Steve Dut­ton, an owner of Dut­ton Ranch based in the Rus­sian River Val­ley of Sonoma County, in Se­bastopol, Cal­i­for­nia.

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