Wine Industry News Round-Up for the Week Ending October 27, 2023

A look back at the events of the wine industry from the previous week.

Table of Contents

Here’s some insight into the last week of wine. E. & J. Gallo, the largest wine company in the U.S., has decided to close the Columbia Winery wine club, signaling a shift towards traditional wine sales. This move follows the non-renewal of Columbia’s Woodinville tasting room lease and may indicate a change in Gallo’s business model. This decision comes after Gallo acquired luxury wine brands Rombauer and Massican, suggesting a strategic focus shift.

Wine Clubs

Gallo shuts down Columbia Winery wine club

  1. & J. Gallo, the largest wine company in the U.S., has decided to shut down the Columbia Winery wine club, as announced in an email to club members. While the email assures that Columbia wines will still be available for purchase in various outlets, the closure of the wine club signals a shift towards a more traditional approach of selling nationally distributed wines for Gallo’s Columbia Winery. This move follows the company’s decision not to renew the lease on Columbia’s Woodinville tasting room and the departure of a senior manager. The decision may indicate a departure from the wine club-driven business model, as Gallo focuses on selling wines through more conventional channels. The closure comes less than a year after Gallo purchased Rombauer and Massican, both luxury wine brands, suggesting a change in its strategic focus.

Industry Trends

Why Are So Many Wine Regions Dealing With Oversupply? | VinePair

Wine regions worldwide are grappling with oversupply issues, as changing consumer behavior and market dynamics create a global wine glut. The French government has allocated funds to destroy surplus wine production, and Bordeaux received financial support to remove vineyards. Behavioral changes, such as the rise of low-alcohol and non-alcoholic options, have led to declining wine consumption. Chateau Ste. Michelle’s decision to purchase less fruit reflects a trend of people drinking less but opting for higher-quality wines. Additionally, global incidents like China’s tariff on Australian wine and the COVID-19 pandemic have affected the wine industry. Factors like grape growing practices and climatic conditions also influence supply and demand. Some regions are incentivizing vine removal and promoting sustainability efforts to address the oversupply challenge.

Wine grape growers moving away from shiraz, cabernet sauvignon amid global red wine oversupply – ABC News

Grape growers in Australia are shifting away from traditional red wine varieties like shiraz and cabernet sauvignon due to a global oversupply of red wine, partly driven by Chinese tariffs. Growers are diversifying their vineyards with lighter red and white grape varieties to cater to changing consumer preferences. While more than 10,000 wine grape varieties exist worldwide, Australia primarily relies on 20, with shiraz and cabernet sauvignon making up a significant portion. However, there is a growing trend in planting lesser-known varieties, such as Italian grape fiano, and grafting vineyards to alternative varietals from Spain, Greece, Italy, and Georgia. This shift aims to provide consumers with new options, but it may be better suited for the Australian market than for exports.

Napa County approves its first micro-winery

Napa County has granted its first-ever permit for a micro-winery to Dharam Goel and Myrto Frangos. The micro-winery, named Goel Estate Vineyards, is located on a 20-acre property in Carneros, where Chardonnay and Pinot Noir grapes are grown. The winery will operate in a former mushroom barn, and plans include repairing the barn, adding awnings, and painting it in county-approved earth tones. The micro-winery law was approved in Napa County in 2022 to simplify approvals for small wineries. Goel Estate meets the criteria, including annual wine production of up to 5,000 gallons, a maximum of 5,000 square feet of indoor space, and growing at least 75% of the grapes used on-site. This law aims to support small winemaking enterprises that may not afford full-scale wineries.

Harvest 2023 Updates

Sonoma Valley vintners rush to finish harvest before rains

Sonoma Valley grape growers are racing against time to complete the harvest before a recent rainstorm threatened to bring mold and disease to their vineyards. The region is experiencing one of the latest harvests in a decade due to slower grape ripening caused by moderate temperatures. The rain, which arrived just before Halloween, has created anxiety among farmers, as early rains can lead to the growth of mold and diseases like botrytis, making the grapes unusable for winemaking. While the rain is a challenge, growers remain optimistic that wind and warm weather can mitigate the damage, and the vintage is expected to be one worth celebrating despite the weather’s unpredictability.

Pinot Noir Harvest 2023: The Race to Ripen

The Pinot Noir harvest of 2023 has been marked by unique challenges, with varying ripening stages across different regions of the state. While some areas have already completed their harvest, others are grappling with unexpected rainfall and the threat of botrytis. Tank space has been a concern due to the compacted crush timeline. Winemakers, like Erica Stancliff, have focused on phenolic development and flavor rather than just sugar content in their decision-making. The late harvest has led to concerns about achieving the desired Brix levels. Despite the challenges, the quality of the fruit appears exceptional. Some areas, however, are struggling with late ripening, and oversupply issues are affecting the Pinot Noir market. Overall, the vintage is expected to be promising, thanks to the prolonged hang time that allowed for flavor development.

NEW Napa Tasting Room Alert

Famed Napa winemaker takes over historic building for edgy new tasting room

Renowned California winemaker Dave Phinney, known for his iconic brands like The Prisoner and Orin Swift Cellars, has expanded into a historic building on St. Helena’s Main Street for an edgy new tasting room. The building, formerly the Bank of Italy dating back to the 1920s, underwent a significant renovation that unveiled its striking Art Deco structure, with vaulted ceilings, exposed walls, and a bar adorned with back-lit bottles. Phinney’s punk rock and surf culture-inspired design sense is evident throughout the space, offering a unique and creative tasting experience. While he retains creative control over Orin Swift wines, Phinney’s brand is now under the umbrella of wine giant E. & J. Gallo, with a recent contract renewal that allows him to continue shaping the brand’s vision.

Litigation

Underground Cellars Saga Rumbles On | Wine-Searcher News & Features

The legal battle surrounding the failed wine club Underground Cellars (UC) continues to revolve around the ownership of the wines involved. The case has been ongoing for six months, with multiple hearings and auctions taking place. Two new bidders and lender TriplePoint Private Venture Credit Inc have intervened in an attempt to prevent UC’s former CEO, Jeff Shaw, from buying the company back. The legal question hinges on who owns the wines, as they were stored in a cellar operated by Shaw and only delivered on request. The case remains unusual, as the majority of the remaining assets belong to the customers, and the ongoing storage costs have led to the Trustee seeking to abandon financial interest in the wine. The final outcome remains uncertain, with further hearings scheduled for November 7.

Acquisitions

Presqu’ile Winery Buys Former Cannabis Ranch in Sta. Rita Hills – The Santa Barbara Independent

Presqu’ile Winery has acquired a 1,100-acre property known as the Donovan Ranch in the Sta. Rita Hills appellation, located in the Santa Ynez Valley southwest of Buellton. The winery plans to plant 45 acres of grapevines on the property in the spring of 2025, expanding its grape sources beyond their 123-acre estate in the Santa Maria Valley. The Donovan Ranch is situated in an area renowned for pinot noir and chardonnay production and is adjacent to the Sanford & Benedict Vineyard. The Murphy family, owners of Presqu’ile, is considering conservation options for a significant portion of the land, which may involve participation in the county’s trail system plans. The acquisition price was not disclosed, but the property was last listed for $7.5 million.

 

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