A bit late to the news on this, but found this case interesting. https://lnkd.in/gxBhm6p Supreme Court rules against TN residency requirement: “The Court’s decision referenced the Constitution’s Commerce Clause to assert that Tennessee’s two-year residency requirement ‘blatantly favors the state’s residents and has little relationship to public health and safety” and is therefore unconstitutional.'” See Laurie Wachter’s very good article at: https://lnkd.in/gKiNMk4 I can’t agree however with the conclusions drawn by Hinman (and perhaps others) that this ruling with lead to a robust Direct to Retailer industry, since the practical realities of developing and maintaining such a business are clearly outside the core competencies of any small to medium sized winery — and likely almost all large wineries to boot. I’d argue instead that developing relationships in the 3-tier system is ultimately more advantageous to the vast majority of wineries.
The ongoing fight for the soul of Napa Valley continues: Disneyfication v. The Family Farm. This week the Napa County Board of Supervisors is taking another look a simplifying the winery permit process. There has been a clear need for this kind of change since the original winery ordinance went into practice. Interestingly, the driving force behind the push to streamline the application process is coming from Save the Family Farms.
If you are planning a small farm or winery, contact us for assistance with the approval process. We can help guide you through the application process and help shepherd the application through approval.
My votes for biggest news in wine this week…I love Alain Ducasse but is #dryJanuary really a threat to the wine industry? See fermentationwineblog.com …PG&E wins its battle over Napa Valley — do we really need more natural gas up valley. #BURYTHELINES … see https://lnkd.in/g-Amg5m … AND SVB RELEASES STATE OF THE INDUSTRY REPORT…get ready for some killer wine discounts in 2020. https://lnkd.in/g9yTxx2
The Wine Institute (link below) has launched a new portal in collaboration with Compli offering guidance on the rules that govern the sale of wine in the three-tier system. Many have already used the Wine Institute’s “shipping state” maps for information regarding DTC licensing and reporting requirements. The new portal will provide a similar service for the wholesale tier, but only for members of the Institute. “We’re making these rules accessible so that wineries can easily understand how to do business in each of their sales channels and maintain compliance,” said Steve Gross, VP State Relations, Wine Institute. Find the press release here: https://www.wineinstitute.org/resources/pressroom/12042018
We would be happy to assist you with any of your out-of-state licensing needs; either on the DTC level or wholesale. Please contact us for more information.
As reported in Wine Business.com, Governor Tom Wolf of Pennsylvania signed a bill permitting out of state wineries to ship wine to PA residents. There is a limit of 36 cases annually per person. The bill makes PA the 44th state in the USA to allow DTC shipments; it will go into effect August 8, 2016. Licensing procedures and other bill requirements may take some time to implement, but this does open up the 12th largest U.S. wine market to out of state wineries. Please contact us for more details.
The bill also provides for groceries and restaurants to sell wine to consumers. Prior to the Governor’s signature on H 1690, alcohol sales were controlled through state liquor stores and sales were not allowed on Sundays. The Sunday rule has been eliminated, although the Liquor Control Board will retain control of spirits sales for the time being. Find the full story here.
The Wine Industry Symposium Group is hosting their 21st annual Vineyard Economics Seminar this Wednesday, May 25, at the Napa Valley Marriott Hotel. The all day seminar includes breakfast, all seminar materials, lunch, and wine tasting at the conclusion of the event. The cost is $400/person.
The line-up this year includes speakers from banks, accountancy firms, government entities, engineers, and brokers to name just a few. Topics to be discussed cover a broad spectrum and include “the current grape and bulk wine market”, “vineyard risk factors”, “tax updates for growers”, the drought and lenders. If you are interested, you can register below.
We’ve noticed a lot of activity in winery sales recently. The list includes Copain, Far Niente, Patz & Hall, MacPhail, and Stryker of Sonoma to name a few. Not all of the sales include real estate. The buyers have been various, but one common trait of the sellers has been notable. The selling wineries have been well-run operations. These were not distressed wineries. Not operations looking for a savior. For any of you small wine operations looking for additional capital, now might be a good time to put the word out.
For news on the Far Niente investment, see the article in Wine & Vines here.
Originally outlined in The Press Democrat, April 14, 2016, vineyard acreage in the North Coast was down slightly for the second year in a row. The breakdown of this decline is what is most intriguing. Napa, Sonoma, and Mendocino counties all decreased a bit, while Lake County acreage jumped 7.7%.
In an article titled “North Coast grape acreage losing ground,” Kevin McCallum suggests that cost and disease are the primary reasons for the increase in Lake County plantings. Cost is fairly straight forward as Napa grapes command an average $4336/ton, Sonoma at $2443/ton while Lake is at $1601/ton. Mendocino grapes are listed as $1520/ton. These prices per ton are tied somewhat to the cost of land and Lake County is significantly cheaper. Some winemakers have taken to blending Lake County grapes with fruit from Napa and/or Sonoma to reduce costs. Another cost factor has to do with a tight labor market and multiple years of drought.
Aside from cost, red blotch has been a huge problem affecting grapes in Napa and Sonoma. Some vineyards have been completely removed, but growers are hesitant to replant until more is known about the disease and how to prevent it. It seems that winemakers facing a dearth of grapes from Napa/Sonoma due to scarcity and/or cost can look to Lake County for fruit.
We posted a recent blog breaking down the drinking population. While it’s true that Millennials (ages 21-37) now outnumber babyboomers (ages 50-67), there has been some debate over which group is actually drinking more wine. In an article in The North Bay Business Journal on April 4, 2016, Jeff Quackenbush discusses the enigma. There have been reports (Rob McMillan of Silicon Valley Bank) that baby boomers buy more bottles of premium wine (over $20) than millennials, while the Wine Market Council reported at their conference in New York that millennials buy more cases of all still and sparkling wines than baby boomers. The council then revised their figures to state that baby boomers consume more wine at each outing than millennials. The discussion is important if wineries take this information and craft their marketing strategies based on any one of the aforementioned reports. What the Business Journal concluded after much analysis was that baby boomers “drink more wine in total than do millennials, but the gap is closing”. So in terms of creating a marketing strategy for the future, it makes sense to target the growing drinking population of millennials.
Per Wines & Vines (3/17/16), the drinking population is now dominated by the Millennials (ages 21-38), followed closely by Baby Boomers (ages 51-69), then trailed by Gen X (ages 39-50) and lastly Seniors (ages 70+). Wine consumption in general has risen since 2000 with a compound average growth rate of 4%. In general, Millennials are drinking more wine than they were 2 years ago while Baby Boomers are drinking less.
What does this mean for wine producers? Well, one aspect of marketing to Millennials is the requisite use of social media. In particular, consumers use Facebook to talk about wine more than any other vehicle. Millennial drinkers are also particularly enamored with “red wine blends, sparkling wines, sweeter wines, some imports and anything new.” So committing to making that sweet red sparkler may make a lot of sense!