California Wine Symposium reveals challenging trends for red varietals

The recent Unified Wine & Grape Symposium, a pivotal event for California's wine industry, cast a sobering light on the state of viticulture, particularly for those cultivating red grape varietals. The symposium, which attracted over 12,000 attendees, was rife with discussions surrounding the challenges facing grape growers and winemakers in the current market.

Jeff Bitter, a notable figure in the industry, expressed a particularly stark viewpoint. He advised growers to reconsider their cultivation of certain red grape varieties, which he views as falling out of favor in the market. This recommendation comes amid a larger trend of declining wine consumption globally, and particularly in the United States, where white wines seem to be weathering the storm better than their red counterparts.

In 2023, despite market signals, 63 percent of new vine plantings in California were red grape varieties. This includes a significant investment in Cabernet Sauvignon, which alone accounted for nearly 27 percent of these new plantings. However, the abundance of Cabernet Sauvignon has led to a surplus, with the 2023 vintage facing the grim reality of unharvested grapes due to lack of demand.

This phenomenon is not isolated to Cabernet Sauvignon. The industry's inability to pivot quickly enough has been exemplified in the past, such as with the fleeting Moscato boom. A similar pattern is emerging with rosé wines. Despite recent enthusiasm for rosé, particularly those from Rhône varieties like Grenache, Syrah, and Mourvedre, the market is showing signs of saturation. Danny Brager of Azur Associates noted that the fervor for rosé has cooled, and the market is now crowded with these products.

January's symposium also coincided with several annual reports on the state of the wine industry, painting a picture of a sector in distress. Overall wine consumption is in decline, with no immediate signs of reversal. This decline is part of a broader trend affecting alcoholic beverages, with beer and traditional spirits also experiencing downturns in 2023. Notably, the only category to see growth was ready-to-drink cocktails.

Wine sales have particularly suffered in the restaurant sector, a previous stronghold for the industry. This shift is attributed to changing dining habits, with a move away from fine-dining establishments, which traditionally showcased wine, towards fast-casual dining options.

The reasons for wine's diminished appeal are multifaceted. Younger generations are drinking less alcohol in general and when they do, they often choose options other than wine. Health concerns and a shift in consumer preferences away from premium wines have also contributed to the industry's challenges.

There are, however, some positive signs. Direct-to-consumer shipments of higher-priced wines have shown growth, indicating a market for premium products, albeit a niche one. This is particularly true for expensive Cabernet Sauvignons, which are finding a diverse market across the United States.

However, the situation remains dire for certain varietals like Zinfandel. Bitter's recommendation to uproot old-vine Zinfandel vines, especially in regions like Lodi and Sonoma County, underscores the economic challenges these varieties face. The labor-intensive nature of these vines, coupled with a market that does not command a premium for such grapes, is leading to their decline.

The industry's current state calls for innovative thinking. One speculative idea is repurposing Zinfandel grapes for rosé production, though this comes with its own challenges given the current state of the rosé market.

California's wine industry is at a crucial juncture. The declining popularity of red wines, combined with shifting consumer preferences and market dynamics, presents significant challenges. The industry's resilience and ability to adapt to these changes will be critical in shaping its future.