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What To Do In Tougher Times?!?!?!

There have been a number of recent stories about wineries making changes of some sort in order to ride out the downturn in our industry. The most visible current story involves Pali Winery, a Santa Barbara County-based winery that actually has been proactive in trying to move wines.

A recent article by Reuters suggests that Pali has made choices out of desperation in order to ride out this downturn. In fact, though, Pali had already started earmarking fruit last year that did not meet its standards for its $50-60 single vineyard wines into lower priced appellation wines that retail for 1/3 the price. This is nothing new, though – wineries have been doing this for a very very VERY long time!

I’m not as old as others in this industry, but I can remember back two decades when wineries in Napa were starting to offer second labels for wine that didn’t make the cut for their best stuff. My first recollection was Hawk’s Crest, the second label for Staps Leap Wine Cellars. But that said, there have been many many cases of this, and most wineries have offered appellation blends, or other types of blends, for a long time.

It simply makes sense. If you have barrels of wine that simply do not live up to your standards, is it best to blend these with your better barrels and therefore bring DOWN the quality of your better wine? Or does it make sense to isolate these and create another wine that is made up of good but maybe not GREAT stuff?!?!?

A few other things I’ve witnessed this harvest:

Wineries choosing to ‘skip’ a vintage – not bringing in grapes at all – to try to keep their cash flow up and keep their doors open.

Wineries choosing not to bring in fruit from specific vineyards because of the cost of that fruit, and in some cases, the unwillingness of the vineyard owner to drop per ton or per acre prices.

Wineries offering ‘special deals’ to increase cash flow to pay for upcoming grape bills – ex. Buy one case at full price, get the second for a penny . . .

There is no doubt that the consumer will come out the winner in the end . . . assuming consumers have any money to spend, of course . . .

I’d love to hear your thoughts on this . . .

Cheers!

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