New Website Launched to Promote Yes Vote on Pierce’s Disease Referendum

Pierce’s Disease Website to Help Inform Winegrape Grower/Vintner Community

Winegrape growers and vintners anxious to better understand why their “yes” votes are needed for the upcoming Pierce’s Disease / glassy-winged sharpshooter (PD/GWSS) Referendum can now turn to a new comprehensive website: www.YESonPDref.org.

Designed and launched by a coalition of the California Association of Winegrape Growers (CAWG), Family Winemakers of California and Wine Institute, the new site provides in-depth analysis of the PD Referendum and the critical work the assessment has supported since 2001.

Up-to-date information on a variety of aspects concerning the PD Referendum can be found on the site, including voting procedures, facts about PD and GWSS, statistics on expenditures, the latest news and links to other sites with information on the PD/GWSS threat.

With passage of the last referendum in 2010, the PD/GWSS Board was given the authority to designate other pests and diseases detrimental to winegrapes for research funding. Since then the Board has designated the European grapevine moth (EGVM), red blotch (GRBaV), vine mealybug (VMB) and  (BMSB) as serious threats to winegrapes.

“Through the industry supported Pierce’s Disease Control Program, we helped stop the spread of PD and soon commercial nurseries will have access to a variety of PD-resistant winegrapes–none of which would be possible without the PD assessment,” said CAWG President John Aguirre. “The program is operating at the lowest assessment rate since its inception; yet it continues to deliver tremendous value.”

Ballots for the vote on the PD Referendum will be sent out the week of March 30th. It’s important that every winegrape grower return his/her ballots no later than April 18th.

At least 40 percent of eligible growers must cast ballots to validate the referendum. Passage requires either: a “yes” vote by 65 percent of those voting who represent the majority of the assessment that was paid in 2014; or a “yes” vote by a majority of those voting who represent 65 percent or more of the assessment that was paid in 2014.

CDFA Announces Dates for PD/GWSS Winegrape Grower Referendum

The California Department of Food and Agriculture (CDFA) has announced important dates for this year’s vote on the continuation of the statewide Pierce’s Disease and Glassy-Winged Sharpshooter (PD/GWSS) winegrape assessment.

Current plans call for the ballots to be mailed to California’s winegrape growers on or about March 30, 2015. The ballots will be due back 30 days after mailing, although this date can be extended. The results of the vote will be announced about two weeks after the voting period concludes.

Since 2001, the PD/GWSS assessment has been one of the primary sources of funding for research on PD and its primary vector, the glassy-winged sharpshooter. In 2010 winegrape growers voted to not only continue the assessment but authorized the PD/GWSS Board to spend assessment funds for research and outreach on other pests and diseases that are serious threats to California winegrapes. Since then, the Board has designated the European grapevine moth, red blotch, vine mealybug, and brown marmorated stink bug as serious threats to winegrapes.

Growers (whether individuals or companies) who paid the assessment on grapes grown in 2014 are eligible to vote. Accordingly, growers will receive a ballot for each of the separate legal entities they represent.  Growers are urged to verify that the number of ballots they receive is correct and report any discrepancies to CDFA. Winegrape growers with any questions about the assessment can contact the CDFA Pierce’s Disease Control Program at (916) 900-5024. Questions about the referendum (including the number of ballots you received) should be directed to the CDFA Marketing Branch at (916) 900-5018.

The PD/GWSS winegrape assessment was established in July 2001 to support scientific research to find solutions to Pierce’s disease. The PD/GWSS Board, composed of winegrape growers, advises CDFA on the use of the assessment.

Pierce’s disease has no known cure and, left unchecked, could be devastating to the winegrape industry. A study released in 2009 by the Wine Institute and the California Association of Winegrape Growers estimated the total annual economic impact of California’s winegrape industry at $62 billion within the state and $122 billion nationally.

California expects more competition for wine market

Source: Steve Adler; Ag Alert

A new report showing that the United States continues to lead the world in wine consumption is viewed as good news for the California wine sector—but it shouldn’t lead to complacency, according to three experts.

This country’s No. 1 ranking in total consumption in 2013 marked the third consecutive year of that achievement. U.S. wine consumption topped 3.3 billion liters, an increase of 5.4 percent compared to the previous year. France retained its hold on second place, with 2.8 billion liters—but that represented a 6.9 percent decrease in consumption.

California’s share of U.S. wine production is about 90 percent, although there are wineries in every state.

“Our consumption is growing in this country, but everyone realizes that the U.S. is the largest wine market in the world because we have such a large population base. Everybody in the world wants to sell their wines here, so there is a lot of foreign competition,” said Gladys Horiuchi of the Wine Institute in San Francisco.

Mendocino County grape grower and winery owner Bill Pauli said last week’s report on wine consumption underscores the importance of the U.S. market not only to California producers, but to producers around the world.

“With America’s expanding growth and improved economic times, consumption has improved and people are drinking better wines. But we still have to compete, not only amongst ourselves, but with all of the foreign competition. And that foreign competition is really the challenge in not only flavors, but price,” Pauli said.

The challenge comes not only in finished products, but from the foreign producers who sell bulk wines into California to be blended or bottled here, competing directly with California grape growers, he said.

Horiuchi said lighter crops produced in California prior to 2012 allowed foreign producers of bulk wines to make inroads. But because of the large crops in 2012 and 2013, the availability of California grapes has eased that threat, she said.

“The good news now is that the wineries are brimming with California wine of excellent vintages, so naturally the wineries have gone back to their local sources. But in order to maintain their shelf space, when the production in California is down, they will import wine from other countries,” Horiuchi said.

Competition from foreign producers was also noted by Glenn Proctor of the Ciatti Co. in San Rafael, who cautioned the state’s growers and wineries not to become complacent.

“When you are No. 1 in the world, it is not just California wines and U.S. wines that consumers are buying, but other countries are trying to get their wines into the U.S. market too,” he said. “So I think we will continue to see a very competitive environment.”

Proctor said it is important for California wineries to continue producing wines that U.S. consumers want, at prices that allow them to purchase more.

“We have to be on our game and remain competitive. The opportunities continue to grow, but we have to be ahead; we cannot be behind,” he said. “We’ve seen countries like Australia, Chile, Argentina and South Africa do a pretty good job of bringing bottled product into this country.”

While this year’s winegrape crop in California is projected to be normal in size, it follows two years of record production, resulting in large inventories in most of the state’s wineries. Proctor said that will allow California wineries to hold onto highly competitive shelf space.

“We have had two bumper crops in a row and this year looks to be a healthy crop, but not large per se. But we do have some excess of wine, especially in the Central Valley. I think we will work through the excess, and it is helpful that we don’t have a big crop this year. But we do need to increase our sales and grow. Any kind of stagnation in case-good sales would not be a good thing for the industry,” he said.

Proctor predicted that in the near term, there could be some “corrections” in prices that wineries pay to growers.

“Prices received by growers are healthy right now and some wineries may think they are too high,” he said. “We may see some correction in the marketplace in the Central Valley in the next year or two, to get inventory costs back in line.”

In the long term, he said, wineries will need a steady supply of grapes coming from California, “and you want to have new and efficient vineyards so growers and wineries can continue to be profitable.”

Proctor said some older and less-productive vineyards in the Central Valley will probably be removed and replanted, either with better-producing grape varieties or other commodities such as almonds or pistachios.

On the marketing side, Horiuchi said wineries continue to target baby boomers, people ages 50 to 68.

“The baby boomers are the ones who have the income and the ones who are dining in restaurants. But at the same time, there is a transition taking place as wineries are starting to market to the next generation, where the consumers are more involved with social media, taking pictures of wine labels and so on. They are willing to try a lot of different things,” she said.

 

California Wine Sales Grow 3% by Volume and 5% by Value in the U.S. in 2013

California wine shipments within the U.S. were 215 million cases in 2013, up 3% from the previous year, with an estimated retail value of $23.1 billion, up 5%. California wine sales to all markets, both domestic and international, increased 3% by volume to 258 million cases in 2013.

“With two record winegrape harvests in 2012 and 2013, California wineries were able to meet consumer demand, and these recent vintages are receiving high praise worldwide,” said Robert P. (Bobby) Koch, Wine Institute President and CEO.

“In 2013, wineries gradually released the highly acclaimed wines from the large 2012 California harvest, offsetting the slowdown in American wine market growth due to short vintages in 2010 and 2011 and continuing soft economic conditions,” said wine industry consultant Jon Fredrikson of Gomberg, Fredrikson & Associates in Woodside.

“In response to these market factors, California wineries focused on sales of premium table wines priced at $10 and above, which increased by 9% in volume and made up nearly half of winery revenues.”

Fredrikson explained that 2013 remained highly competitive. The U.S. Tax and Trade Bureau approved nearly 99,000 wine label registrations, the majority of these from foreign producers, which crowded trade channels and vied for consumer attention and shelf space.

In addition, over the past five years the number of alcohol production permits increased by 4,100, up 47%, not only for new wineries, but for craft breweries, distilleries and cider producers, expanding the product mix offerings.

The large number of beverage alcohol products continued to squeeze distribution channels, and many small- and medium-sized wineries looked to direct-to-consumer sales through tasting rooms, wine clubs, online marketing and other direct sales channels, using social media and other digital communications to reach out to consumers.

Brick and mortar retail outlets selling wine continued to increase, expanding by 62,000 locations over the last five years, up 12% to 550,000 outlets, according to the Nielsen Company, a global provider of information and insights into what consumers watch and buy.

“Retailers are stepping up their game with more sales locations, making wine more accessible to consumers than ever before,” said Danny Brager, Senior Vice President of Nielsen’s Beverage Alcohol Practice Area. “Consumers have also shown that they’re willing to spend a bit more on a bottle of wine than in previous years.”

According to Nielsen measured U.S. off-premise channel numbers, the most popular wine types were Chardonnay (20% share), Cabernet Sauvignon (13%), Merlot (9%), Red Blends/Sweet Reds (9%) and Pinot Grigio (9%), followed by Moscato (6%), White Zinfandel (5%), Pinot Noir (4%), and Sauvignon Blanc (4%). Moscato, Malbec and Red blends experienced double digit growth, while after that, Pinot Grigio and Pinot Noir exhibited the next strongest upward trends.

The U.S. Wine Market

Wine shipments to the U.S. from all production sources—California, other states and foreign producers—grew 3% to 375.2 million cases with an estimated retail value of $36.3 billion. This represents 21 consecutive years of volume growth.

The U.S. has been the largest wine consuming nation in the world since 2010. California’s 215 million cases shipped within the U.S. represent a 57% share of the U.S. wine market.

Sparkling Wine and Champagne

Lifted by the popularity of Prosecco, shipments of sparkling wine and champagne to the U.S. reached 18.4 million cases in 2013, up 4% over the previous year.

U.S. Wine Exports

U.S. wine exports, 90 percent from California, reached $1.55 billion in winery revenues in 2013, an increase of 16.4% compared to 2012. Volume shipments reached 435.2 million liters or 48.4 million cases.

Wine Institute is the voice for California wine representing more than 1,000 wineries and affiliated businesses from the beautiful and diverse wine regions throughout the state.