More bottles of wine were sent around the country from California last year than ever before, according to a state wine industry organization.
But whether those numbers will translate to more business for Mother Lode wine companies is not so clear yet. Some in the local wine industry say last year was as successful for them as it was for the state as a whole, while others say that more wine flowing from California doesn’t necessarily mean more business locally.
According to a report released last month by the California-based Wine Institute, state wineries shipped 256.6 million cases of wine in 2011, 211.9 million cases in the U.S. alone. That business amounted to almost $20 billion for California wineries last year and a 5.6 increase in volume compared to the previous year.
The shipment numbers are the highest dating back to 1998, and showed a more-than 11 million case jump for U.S. sales from 2010, according to The Wine Institute. The report also states that the U.S. is the largest wine market in the world, with a 5.3 percent jump in cases purchased in the country from 2010 to 347 million.
According to The Wine Institute, this growth has been largely driven by “millennial’ customers between 21 and 34.
“California’s vintners grew the wine market with creative, innovative offerings at all price points,” said Robert P. Koch, institute president.
In Calaveras County, Murphys-based winery Newsome Harlow experienced strong business in 2011, according to winery owner Scott Klann.
“Things are up for us,” Klann said earlier this week. “All signs are pointing to a higher level of shipments.”
Klann said they’ve seen an increase locally in wine club memberships, something that drives shipments in the area due to its connection to tourism. Klann also attributed the numbers, both at his winery and around the state, to the growth in wine culture and food culture in general.
Klann has been working in the central Sierra Nevada wine industry for about 20 years, and he said he believes the region’s wineries used to be more independent from the rest of the state. He described the foothill industry in the past as one of “boom and bust” dynamics, with economic cycles that “weren’t in line with the rest of the state.”
But while Klann said the local wine-economy especially in the Murphys area is still “a bit of a bubble,” it’s following the rest of the state more as local labels reach more people.
“It actually models the rest of California much more now than it ever used to,” he said.
Not all local winemakers have seen those trends. Matt Hatcher, of Hatcher Winery in Calaveras County, said overall business is not particularly up for him compared to the boom before the economic crash. In fact, Hatcher said things have been about the same for the past four years.
He said he believes equating high volumes of wine shipments to improved business to all wineries is a “flawed” way to look at the numbers. While more wine is being sold in California, it’s being sold at a lower cost, he said.
Hatcher pointed to a multi-year glut of surplus grapes that have led to a lot of “bulk wine.” That’s led to more bottles going for around $5 at the grocery store.
Wineries like Hatcher that sell higher quality bottles — his are closer to $15 — haven’t necessarily been affected, he said.
“It’s a frustrating thing,” he said earlier this week. “At the end of the day, do you count units or do you count dollars?”
Hatcher said he wishes he had the answer to when the economy would turn around and give tourism in the area a bump. But his “educated guess” predicts another couple years before a significant upturn.
“I’ve been doing this 10 years, and it’s not getting any easier,” he said.
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