The Wine Industry Is Not Exempt From Changes In Consumer Preferences

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Change Is A Constant

It’s been more years than I would like to admit when I met a gentleman that owned a nursery that sold rootstock to vineyards. The question that puzzled me: Is there that much demand for new rootstock? The thinking, albeit wrong, assumed sales must be predicated on disease and/or vineyard expansion that should be about it for new vines. His comment back to me was, to the effect, “wine is like fashion, there is always something new in blending, changes in consumer taste, competition, and new clones that keep rootstock nurseries busy.” If you look at vineyards you will often see where established vineyards have been ripped out and a new one planted. The point being, even in wine there is always change.

In the last few years technologies have been introduced where a winery can adjust the alcohol in a wine via mechanical processing without impacting taste and aromas. New yeasts have come to market with promises of great wines. In early March 2016 a new hour-glass shaped wine fermenter barrel has been introduced, called the Upside-down fermenter, and it is said to produce more complex aromas with gentle extraction of color and tannins. These are just three recent examples of changes/innovations occurring in the wine industry.

But as great as some of these innovations may be, it is still a moving target to figure out what the consumer’s next “hot button” will be when it comes to new tastes in wine. For example, let’s take a look back about 15 years ago when Syrah was forecasted to be the next “in-demand” wine. Vineyards were planted and some replanted with this Rhône varietal. Remember, the above comment about how rootstock nurseries make a living–changes. Richard Nally a wine columnist for Copley News Service wrote the headline in April 2000–Syrah: The Next Big Grape. He went on to say, “Syrah, the noble red grape of the northern Rhône region of France, is the grape of the moment in California. This isn’t altogether surprising, for Syrah is one grape that can out-Merlot Merlot (America’s favorite red varietal). It’s just as smooth-drinking, but even juicier, fruitier, spicier, more luscious. In fact, as Next Big Things go, Syrah has a lot going for it.” Even Food and Wine Magazine made the proclamation, “California is experiencing a Syrah boom.”

It does now appear the wine consumer has spoken and Syrah is falling out of vogue; at least in California. Ship Compliant and Wines and Vines produces a report, 2016 Direct to Consumer, which reports on the growing trend of consumers buying wine direct from wineries. These are wines delivered in 43 states via such services as UPS, FedEx and other local shippers. They break-down the report by nationwide deliveries by varietals. In 2015 it was reported that Syrah had a decrease in DtC (Direct to Consumer) volume sales of -7.6% while the industry grew 11%. Interestingly, Rosé and blended red and white wines are generating the most interest in 2015 and 2016.

Granted, the Direct to Consumer report only highlights wines sold via wineries and delivered to consumers in 43 states. Massachusetts just started allowing wine shipment to their residents in 2015. Having said this, it seemed appropriate that we see what the largest wine producing state (California) has done relative to Syrah production. The USDA produces a report that denotes the acreage of bearing vines by varietal. That report presents some interesting data.

In 2013, in California, there were 19,019 acres of Syrah grapes planted. In 2014 the Syrah acreage decreased by 5% to 18,000 acres. It was approximately 2008 when the increase in Syrah acreage plantings started to wane. And by 2013 the Syrah was no longer in favor. Even in the San Joaquin/Central Valley around Sacramento there is plenty of evidence that the farmers have taken out wine grape vines and replanted with nut trees. When you realize that farming, whether wine grapes or any other agricultural product is a business the common language is generating maximum revenue per acre. In the wine grape business it takes 3 years to see any results by way of grapes; that is a long time.

No matter the industry, trends must be researched, anticipated and actions taken to respond profitably to changes. Even the agricultural business of wine grape production is not immune to the vagaries of change. One year it can be disease and the next year drought. This is to illustrate that Syrah as a varietal wine is still strong but just not as strong a seller as it once was. The only constant is change.