North Bay growers navigate challenging times as the wine industry experiences a generational shift in consumption
By Karen Hart
Harvest is underway for North Bay grape growers, and it’s been an ideal growing season for the 2024 vintage, though warmer than last year. The 2024 crop size is average to below average, which is considered a positive in the current market. Grape sales are soft this year — across all varieties — and a generational shift in wine consumption is a looming topic of concern. Those in the industry are feeling a shift and, in some cases, the economic pain. Change is in the air, and grape growers are making tough decisions.
Fewer Americans are drinking wine, as reported over the last several years, according to the 2024 U.S. State of the Wine Industry Report. Instead, they’re selecting alternatives such as ready-to-drink beverages, spirits and cannabis. Or, they’re abstaining all together. It’s a change in consumption that’s been noted around the globe.
“A generational shift is affecting our industry with Baby Boomers slowing down and new generations not picking up the pace,” says Christian Klier, North Coast Grape Broker, Turrentine Brokerage. Meanwhile, the current economy isn’t helping matters. “With less disposable income, people are buying fewer luxury items such as wine. This is a worldwide situation.”
As a result, growers are making some tough decisions. “We’ve already seen 20,000 acres pulled out of the central valley, and more vineyards will have to come out to find balance in the marketplace,” Klier says, adding that there are more vineyards for sale than he’s seen in 20 years.
“There’s no question that signals from the wine sales landscape have caused stagnation for grape sales, especially on the spot market. But the vast majority of growers in Napa County have long-term relationships with wineries and many others have diversified their operations by producing wine of their own,” says Executive Director Caleb Mosley, Napa Valley Grapegrowers. “Proactive growers are in close contact with their winery partners, discussing the realities of the market with an eye towards crafting alignment with future vintages.”
The marketplace is hard to read, says Glenn Proctor, a Sonoma County grower and a partner for Ciatti Company, a global wine and grape broker. “We’re trying to understand where consumption patterns land,” he says. “That’s our biggest challenge. It’s tough on the industry and tough on the growers. Buyers are very cautious right now and hesitant this harvest season. We’ve seen this hazy dynamic for a few years.”
Karissa Kruse, president and CEO of Sonoma County Winegrowers says, “Sonoma County grape growers, like growers around the world, are facing a more complex climate, rising costs and shifts in the marketplace.” In addition, she adds, “The cost of doing business is incredibly difficult, especially for our smaller, family farmers. Many grape contracts with wineries are long-term, so sharp increases in business costs are difficult to manage for the short term.”
Tough decisions
Whether to pull out vineyards or wait until the market stabilizes is on the mind of those in the winegrape business. Some growers are assessing whether to sell or hang in for the long-term. “This question is unique to every operation, and there will be varied discussions post-harvest,” says Mosley. “We are fortunate that most growers have strong connections with winery partners, with both parties fully aware of the need for mutual success. We are not expecting a substantive change in planted acreage in Napa moving forward into 2025.”
“Our farmers are a relentless group constantly taking challenges head on,” says Kruse. “But, make no mistake, this may be the toughest time for farmers and ranchers in our country’s history,” she says, adding that there are many factors to consider when deciding to sell or keep a vineyard. “Some of the key drivers are succession planning, ability to financially navigate the market fluctuations, and long-term family goals. This is truly a personal decision — and certainly never an easy one.”
Future-proofing vineyards
For those who plan to ride out the slowdown in the marketplace, some are looking to future-proof vineyards with new technologies. “Many of the forward-thinking approaches have been put in place to protect against high-heat events, preserving both fruit quality and quantity,” says Mosley, adding that automated irrigation valves are making inroads, which allows for close water use monitoring and enhanced efficiencies. “Early adoption of AI technology has allowed viticulturists to quickly determine vine water stress. We’re still in the nascent stages of adding AI to our suite of tools. However, advances in remote sensing technology, traditional cameras and data management systems are quickly influencing our industry.”
The Farm of the Future effort at Sonoma County Winegrowers helps farmers adapt to an increasingly complex climate, says Kruse. “Through Farm of the Future, we can pilot and create a case study for new technology or equipment,” she explains, “so we can better understand the return on investment to help growers make the best decisions for their business.”
While efficiency is a common goal for most businesses, it’s not necessarily going to solve the shift in the marketplace. “There is no magic bullet here. This market is not favoring a specific varietal or farming practice,” says Klier. “Everyone is affected by this downturn. I would say the best a grower could do is try to implement more mechanization in the vineyards to lower farming costs.”
There’s opportunity with investing in efficiency practices, adds Proctor. “But it’s hard to consider when you’re treading water to stay afloat.”
Grape demand and pricing
What can growers do to ensure top pricing and demand for their fruit? “Quality is the main driver of pricing in Napa and our practices have evolved over the years to ensure fruit quality is optimized vintage after vintage,” says Mosley. Growers who’ve worked with their winery partners over time to match stylistic goals, he adds, will differentiate themselves from others, as strong relationships and synergy always yield benefits. “Certifications and efforts towards environmental stewardship coinciding with excellence in viticulture practices also create demand.”
In Sonoma County, sustainability farming practices and winery partnerships are also key. “Sonoma County grape growers continue to focus on sustainable farming, the highest quality grapes and investing in their relationships and partnerships with wineries,” says Kruse.
“Relationships and reputation matter in this business,” adds Proctor. “When wineries come back and buy from growers, they’ll be looking for a good reputation from those they’ve had the best partnerships and relationships with in the past.”
Adds Klier, “Wineries are looking for great partners who grow high-quality fruit and are easy to work with. Your current grape buyers are your best bet in a slow market.”
The future of grape farming
As harvest season continues, and growers around the North Bay grapple with a changing marketplace, there is hope for the future. “Wine has always been the beverage of choice when it comes to meal enhancement,” says Proctor. “Wine will always be around. That makes me optimistic for the future.”
While everyone in the industry adjusts to a shifting marketplace, Napa growers continue to focus on quality. “We owe a huge debt of gratitude to the visionaries that helped establish Napa Valley as one of the premier growing regions on the globe,” says Mosley. “We will continue to take a proactive approach, doing everything possible to help our members navigate these challenging times.”
Kruse sees opportunity for those working in the wine industry. “A more competitive marketplace with shifting trends, especially among a younger demographic, is not insurmountable, but rather an opportunity for the wine industry to be more creative, innovative and relevant. Wine is one of the most unique products in the world. Every bottle represents a place, a time, a farmer’s touch and a winemaker’s style.”
In the meantime, Klier offers growers practical advice for the short term. “Mitigate loss as best you can without compromising quality,” he says. “Mechanize as much as the wineries allow and try to control input costs. Accommodate your current buyers and try to foster a long-term relationship that will facilitate you through the markets’ good times and bad times.”
Karen Hart
Karen Hart is a freelance writer, who’s been writing about wine and the business of wine for nearly 15 years. She lives in Sonoma County and always appreciates a good glas of vino from the North Coast. Contact her at writerlady.sonomacounty@gmail.com.
