Are you sure your California wine is from California? Money and wine.
Larry Leigon's Secret Life of Wine Newsletter #188
Ancient Vines in Lodi. from winefolly.com. All rights reserved to Wine Folly.
Too much wine
4 min read
When I was a younger man I found myself riding in an old rattling bent-wheel pickup truck through rolling hills thick with grapes in a place and time that shall remain unknown.
My boss was driving and he was depressed. You’re probably thinking it was the truck, but he loved that truck and even though he was a multi-millionaire, he liked dressing like a farmer and driving around in farm related vehicles.
Why then you ask, was he depressed? It was the grapes. When you first read that opening paragraph above you most likely pictured abundance, romance and all manner of plants and creatures bursting from the fertile earth amidst the vines.
The thing is, it was October and all those grapes were left hanging on the vines because there were so many grapes in the world, he couldn’t sell them for a price that would cover the cost of harvesting them. So there they sat and there they would sit, waiting to be harvested until the end of time.
Or until they fell off and rotted and the birds got them.
Oak Fram Vineyards in Lodi. from mantripping.com
To say there is a world wine glut is to invite economic analysis, intellectual discussions of supply and demand, breakeven analysis and the slow nodding of heads inside the cold marble walls of big banks with big front doors.
Grape gluts are nothing like that. They are like getting kicked by a horse and then stomped on. The adults are tossing in their half sleep like little children because the next time there’s even a chance for money to come is over a year away.
But the bills keep coming endlessly like a swarm of paper locusts.
There is a world wide grape glut this year. Right now as you read this bankers all over wine country are demanding payment from wineries who have nothing to sell. They could harvest of course, but that just makes their losses bigger.
France is spending over $200 million to destroy excess wine and pull out vineyards. In Australia wineries have to stockpile over two years worth of inventory they can’t sell. In California, there’s major financial pressure to pull out tens of thousands of vines in Lodi alone.
Lodi is the most diverse wine growing region in California with over 125 different varieties of grapes in the ground. Shades of the way grapes were grown in Italy for generations. And the Lodi growers are as depressed as my boss was, excpet they don’t have Citroen or a Mercedes in the garage.
Places like Napa and Sonoma, or Willamette Valley in Oregon aren’t nearly as exposed as the growers in Lodi. Those places grow better grapes, concentrating on major varieties, and sell at much higher prices. They may need to lower the price on a bottle of Cabernet sometimes, or wait longer to sell it—but Napa Cab will sell sooner or later.
Lodi grows the grapes that go into brands like Gallo, Constellation and Delicato. Big operations selling mostly low end wines in big bottles or boxes. If you are a fan of wines like these you probably think that the wine you’re getting a bargain in is all from California.
But you’d be wrong.
Up to 25% of those wines are from foreign countries. The law allows that. And the big brands can import wines from Australia and Chile and Canada, Argentina, and New Zealand for less money than it takes to buy the wine from around their wineries. And so a quarter of the California wines you buy from those places aren’t from California at all.
This is when conservative growers become socialists. If you are a free market kind of wine drinker then you’re glad to see the glut, because you get better wine for less money. If you are a Lodi grower though, you can’t feed your family or pay your bills and you demand subsides from any government that will listen.
You can’t feed your children an economic analysis with a side of a banker’s opinion.
Money, scratch, moola
Imagine your are a grape farmer in an area thick with giant wine companies that are buying wines twenty four hours a day all around you. But none of them will buy from you. They can import wine for less than you can grow it. Fifth generation farmers are facing losing their farms and hungry families. Most of them don’t grow the kind of grapes that end up in wine in four star restaurants.
Most of them never wear a tuxedo. Or drink from crystal.
But financially they are the heart of the wine business. Ask any banker. And the heart of the wine business is in trouble.
No matter how many bottles of Napa Reserve Cabernet you have in your cellar, I hope you will take time to think of the people growing grapes the way it has been grown for at least 6000 years.
And the next time you’re in one of those expensive restaurants I spent my life in, I hope you’ll lift a glass to those among us that literally give their lives for wine.
Larry Leigon, author of “The Secret Life of Wine”
Click on the photo to see “Inside the Book” on Amazon