Wine Industry News Round-Up for the Week Ending November 10, 2023

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

Table of Contents

The Washington wine industry is undergoing significant changes, with a shift in ownership at Chateau Ste. Michelle and a generational shift towards showcasing unique terroir and varietals. Smaller wineries are experimenting with lesser-known varietals and sustainable farming methods. Efforts to attract younger consumers involve innovative marketing and maintaining price points above $15. However, there is growing debate about the sustainability of super-premium wine pricing. Meanwhile, France is expected to regain its position as the top wine producer despite challenges in some regions. Global wine production is expected to be the lowest in 60 years due to extreme weather conditions. Penedès aims to become the world’s first 100% organic wine region, and frost damage in Australian vineyards prompts warnings from the Australian Wine Research Institute. In Ohio, an important lawsuit concerning wine shipping laws won’t be escalated to the Supreme Court, potentially impacting wine shipping regulations nationwide. Australian winemakers celebrate the rejection of an EU trade deal restricting the use of the term “Prosecco.” Lastly, Napa wineries claim restrictions on public tastings violate their constitutional rights, urging an investigation by California’s Attorney General.

Industry & Economic Trends

Washington Wine Industry at a Crossroads –

The Washington wine industry is undergoing significant change following Chateau Ste. Michelle’s shift in ownership and a decrease in grape purchases by the state’s largest producer. There’s a generational shift in winemaking, with younger individuals focusing on showcasing the state’s unique terroir and varietals instead of solely pursuing big, impressive wines. Despite sales decline for major brands, there’s an emergence of experimentation with lesser-known varietals and sustainable farming methods among smaller wineries. Efforts to attract younger consumers involve innovative marketing strategies, new product lines, and engaging experiences, while aiming to maintain price points at $15 or higher for most brands. However, there’s a growing debate about the sustainability of super-premium wine pricing given the current market trends. The industry’s focus remains on recruiting and engaging new consumers while navigating these transformations.

Naked Wines shares dive as it ousts boss and warns of falling revenues

Naked Wines experienced a drastic plummet in its share price, dropping over a third, following the resignation of its chief executive, Nick Devlin. The online retailer adjusted its full-year revenue forecast, expecting a decline of up to 16 percent, blaming the CEO’s responsibilities for both the UK and US operations for the company’s disappointing performance, particularly in the US market. The founder, Rowan Gormley, noted Devlin’s departure, emphasizing his positive contributions to the company and acknowledging ongoing efforts to enhance their customer proposition. Despite the departure, the company foresees challenges and is actively seeking a replacement for the CEO position.

France raises wine output estimate, regains top producer spot | Reuters

France is expected to regain its position as the world’s top wine producer, with the farm ministry increasing its estimate for this year’s wine production to 47.2 million hectolitres, up 2% from last year. Despite disease affecting major regions like Bordeaux, overall production rose, particularly in Champagne. However, some areas, including Bordeaux, Languedoc-Roussillon, the South-West, and South-East, experienced declines. The increase in French wine production contrasts with a global trend, as the International Organisation of Vine and Wine predicts the lowest world wine output in 60 years in 2023, influenced by unfavorable weather conditions in Italy, Spain, and Latin America.

Climate & Sustainability

In 2023, world wine production is expected to be the smallest in the last 60 years | OIV

The 2023 global wine production estimates, presented by Giorgio Delgrosso from the OIV’s headquarters, reveal a substantial decrease primarily due to extreme weather conditions affecting major wine-producing countries. Southern Hemisphere harvests, including Australia, Argentina, Chile, South Africa, and Brazil, are significantly reduced, with only New Zealand surpassing its five-year average. In the Northern Hemisphere, Italy, Spain, and Greece faced adverse weather, while the USA and a few EU countries like Germany, Portugal, and Romania observed average or above-average production. The projected global wine output for 2023, based on data from 29 countries, is expected to range between 241.7 mhl and 246.6 mhl, approximately 7% lower than 2022. This decrease, the smallest since 1961, is attributed to weather-related challenges. Despite this, the lower production may help balance the global market amidst declining consumption and high stock levels in various regions.

Penedès to become world’s first 100% organic D.O

Penedès, located near Barcelona, aims to become the world’s first entirely organic Designation of Origin (DO) by 2025, as confirmed by D.O Penedès president Joan Huguet. The Spanish wine region perceives organic practices as essential for a healthier, sustainable landscape, attributing climate change as a driving force behind the transition. While this shift poses challenges due to varying altitudes across vineyards, the DO is providing support and financial aid to aid the conversion process for growers and wineries. With a focus on promoting their indigenous Xarel.lo grape, known for producing versatile wines that complement diverse cuisines and have potential for extended oak aging, Penedès aims to position these wines prominently in international restaurants, particularly in the on-trade sector.

Frosty start to growing season – WBM Online

Frost damage across Australian vineyards due to the El Nino weather pattern has triggered warnings from the Australian Wine Research Institute (AWRI). They advise waiting a week to assess the extent of the damage before taking action, as the impact may take time to show. The severity determines the course of action; for minor damage, no immediate action is necessary, while severe damage early in the season allows the vine to produce secondary shoots. However, significant damage in more developed shoots presents challenges for fruit quality and canopy management, leaving the decision to either remove damaged primary shoots or follow a ‘do nothing’ strategy, both with implications for the following season’s yield and fruit quality. The AWRI recommends accessing the Bureau of Meteorology’s frost potential maps for information on frost risk outlooks and warnings to aid in vineyard management

Lawsuits & Litigation

Wine the Winner in Ohio Court Case | Wine-Searcher News & Features

In an Ohio lawsuit concerning wine shipping laws, the state decided not to appeal a federal appeals court decision, a win for out-of-state wine lovers and retailers. The case, involving restrictions on out-of-state wine shipments to Ohio, won’t be escalated to the Supreme Court, prolonging the process. The court ruling demands actual evidence that Ohio’s shipping laws benefit public health and safety, unlike justifying support for the three-tier system. The case, returning to the district court, could significantly impact wine shipping regulations if evidence of the law’s beneficial impact isn’t demonstrated. The decision’s implications may eventually influence wine shipping nationwide, yet the process is expected to take time, as the Ohio case challenges the traditional three-tier system and necessitates evidence to support claims against shipping.

Winemakers share excitement for safeguarding of Australian Prosecco – The Shout

Australian winemakers, including Christian Dal Zotto of Dal Zotto Wines and Katherine Brown of Brown Family Wine Group, celebrate the rejection of an EU trade deal that aimed to restrict the use of the term “Prosecco” to Italy. Minister Don Farrell’s decision was met with relief and excitement, acknowledging the importance of the Prosecco grape as a significant part of the Australian wine industry. The winemakers emphasized the grape’s growth in popularity and its suitability for the Australian lifestyle, fostering casual moments and daytime entertaining. They also highlighted concerns about stifling the planting of uncommon varietals and the importance of safeguarding future grape variety naming rights. Both Dal Zotto and Brown praised the collaborative efforts of winemakers, thanking the industry for its unity and support throughout the campaign to preserve the Prosecco name for Australian winemaking.

Napa Wineries Claim Tastings as Human Rights | Wine-Searcher News & FeaturesThree Napa wineries, including Hoopes Vineyard, are urging California’s Attorney General to investigate Napa County for alleged civil rights violations, claiming that restrictions on public tastings and events violate their constitutional right to pursue business. Lindsay Hoopes, a former prosecutor, argues that the county’s actions constitute a violation of civil rights akin to law enforcement citing someone for a legal activity. The wineries face challenges from Napa County’s restrictions, with conflicting interpretations of use permits and ordinances. While the wineries may have a legal case, the practical uphill battle is highlighted, as civil rights investigations by the California Attorney General typically focus on issues such as discrimination, police misconduct, and workers’ rights rather than property rights.

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