Central Coast growers seek consolidation benefits

Wines & Vines, May, 2005 by Kathy Marcks Hardesty

Crossland farms 23 properties, with grape prices ranging from $400 to $3,000 per ton. "Given a free market, every grape will end up in bottle and priced according to its quality," Crossland said, adding that he's worked at getting more wineries to sign contracts and to understand the need to communicate with growers. But he also envisions more global companies like Diageo and Constellation in the future. He advised growers to look at competition from other regions, rather than supplier versus maker.

"After 33 years in the business, I'm cautiously optimistic. But there will be more pressure from imports over the next few years," Crossland admitted. "More of the pie will be going to imports if we don't meet the challenge. We need to work together for all components of the industry."

RELATED ARTICLE: 2005 Central Coast Insights Survey

This year's Central Coast Insights survey had 38 vintners and growers participating, slightly down from 40 responses in 2004, with winery owners representing the majority at 73%. Most attendees (41%) were from San Luis Obispo County, doubling the number from Monterey and Santa Barbara at 19% each.

When asked about the growth of wine sales in California, 84% of respondents said they believe sales will increase in 2005, while 86% expect sales to grow in 2007. However, responding to the same question about the Central Coast (CC), an impressive 92% said they expect sales increases in 2005, and 100% expect increases in 2007.

In past surveys, respondents said they believed quality would have the most positive impact on CC wine sales over the next three years. But this year, image and CC identity were credited first, followed by the economy, the Supreme Court, expanded consumer base and then quality.

On current events creating positive growth in the CC, most respondents credited the movie "Sideways," followed by Robert Parker's Future Predictions in Food & Wine, October 2004, in which he claimed: "California's Central Coast will rule America." On the other hand, respondents said the Chalone and Mondavi acquisitions had negative effects on growth.

Growth in sales by price segment showed wines priced under $10 declining between 2005 and 2007, but respondents said they believe growth will be stronger in wines priced $10 and up. Chairman David Freed pointed out: "Just one year ago, Two-Buck Chuck, in the under $3 level, seemed a positive segment, but it went back to former (growth) levels."

When comparing sales in 2004 to 2003, respondents' answers were divided: in 2004, 57% said sales were higher; 39% said sales were lower and 4% said sales hadn't changed. In 2003, 73% of respondents said sales were higher, while 27% experienced lower sales.

In a four-year comparison of sales by venue, respondents said wine shop sales were up in 2002 and 2003, but dropped in 2004 and 2005. But most noted sales increases in restaurants, chains, clubs and Web sites between 2002 and 2005.

K.M.H.

RELATED ARTICLE: "Enoventor" Invents Wine Closure

Inspired by a misplaced corkscrew, restaurateur and self-styled "enoventer[TM]" Achilles Ligeros has developed a new wine closure, the EZCORK[TM]. The device combines a natural cork and a screwcap/capsule, secured with a screw.