WEST COAST PRODUCERS FOCUS ON QUALITY, NOT QUANTITY
Debby Hartke, Contributing Editor
In commodity agriculture, the producer comes out ahead with high yield and low cost. That isn't the winning combination in winegrape production. In fact, it's likely a losing strategy.
A high level of consumer knowledge about production geography and demand for an identified product drives the California wine industry.
"A grape producer can't afford to cut costs and risk fruit quality. He can't afford the risk of getting a disease on the grapes," says Nick Frey, executive director of the Sonoma Country Grape Growers Association (SCGGA). "In the commodity market, you want cheap and interchangeable. Here, the last thing you want is cheap and interchangeable."
Frey knows both sides of this story. Before joining the SCGGA in May 1999, he spent 25 years working for Pioneer Hi-Bred International, leaving there as a vice president with Optimum Quality Grains, the Pioneer/DuPont joint venture.
"Commodity producers have incentives to produce minimum quality and maximum yield," Frey says. "Grapes are the opposite. Quality specifications of the wineries are high and, in fact, maximum yield reduces quality. Grape growers are paid a higher price per ton of grapes to maintain quality and the grower may need to limit yield."
This is sometimes a hard reality for growers.
"Wine is one of few areas of ag processing where quality still does reap a real reward," says Sonoma County winegrape grower Bob Hopkins. "We haven't had to do a lot of thinning on our place, but we're starting to. My employees just hate seeing those grapes on the ground. They still have the farmer's mentality. They want to see production. I have that in my heart, too."
The Hopkins River Ranch is located in Healdsburg, Calif., in the Russian River Valley region of Sonoma County, a cool area near the coast good for producing Chardonnay and Pinot Noir grapes. He describes his 80 acres of vines as a "big small vineyard."
"We're likely to stay at that size, given land prices these days," Hopkins says. In some recent land sales, prices ranged from $70,000 to $100,000 an acre.
Hopkins produces about 300 to 400 tons of grapes per year, averaging about 5 tons per acre.
Good grape prices, averaging $1,890 per ton for all winegrapes, allow hundreds of small growers with less than 100 acres to thrive in Sonoma County and other grape-growing regions of California.
It costs a producer about $15,000 to $20,000 to plant an acre of flat ground, probably double that for steep, difficult-to-plant ground, or ground with other special problems. Producers must prepare the land, install trellis systems and irrigation systems, and purchase vines and crop protection products including fungicides and insecticides. The natural pesticide sulfur constitutes more than 75 percent of all the pesticide used to produce grapes in Sonoma County.
Once a producer plants his or her vines, three years will pass before he or she has any grapes to sell and five years before the vines produce at full capacity of four to seven tons per acre.
"We have the same problems as anyone growing a perennial crop like apples or another tree crop," Hopkins says. "We have to plan ahead."
Vines typically are planted four to eight feet apart in rows six to eight feet apart. Trellises are used to carry the vines' load and provide for the best possible exposure to the sun. Hopkins buys most of his trellis supplies from nearby Vineyard Industry Products, Windsor, Calif.
MARKETING TO PRODUCERS
According to Vineyard Industry Products owner John Downer, a trellis system is in place for the life of the vine, or about 20 years, so it's a one-time purchase.
"The term we use to describe the business is 'site-specific'," says Downer, who's been selling products to grape growers since 1979. "Each grower has his own budget, his own planting schedule."
Trellis-related purchases can be spread over three years, as the vines come into production. First growers buy stakes, then they add wires, then they put a trellising system over the top.
Because growers don't always share their expansion plans or, may change their mind by the next year, suppliers like Downer have to use their best guesses to help project how much product to have on hand.
"That's what's nerve-wracking about this business," Downer says. "We get our guidelines from the nurseries. Each of four major nurseries produces about 10 million vines a year. When I know that they're sold out of 40 million vines a year in advance, I know I'll likely get a piece of that business."
Downer has a second store location in Paso Robles, Calif.
"We keep a massive inventory, where some other suppliers might not have the nerve to do that," he says. "I look out my window and think, 'Oh boy, there's $3 million worth of stuff sitting on the ground.' But if I have it available, I will sell it."
Hopkins typically sells grapes to about a half-dozen wineries, including Dry Creek Vineyard, Matanzas Creek Winery, Taft Street Winery and Kendall Jackson.
"A lot of a vineyard's marketing is based on where you are and what you're growing," he says. "We try to tailor our growing practices to what the wineries want."
The growers of Sonoma County over the last 15 years have created a number of appellations, or geographic designations which are officially recognized by the federal Bureau of Alcohol, Tobacco and Firearms (ATF) as growing areas.
These appellations, and not a vineyard name, are what most often appear on the bottle's label.
"These are important distinctions that the winemaker makes and the consumer can taste," Frey says.
Having those recognized appellations has done a couple of things. It's allowed each area to promote itself individually while still being under the umbrella of Sonoma County. It's given a brand identity to the grapes of a given region. Some wineries and some growers have gone even further and labeled with a specific ranch name. The individual vineyard designation is less common and most of that wine probably doesn't even leave California, according to Hopkins.
"Use of a vineyard designation on a wine label is kind of a two-edged sword," Hopkins says. "If it's successful, it's a good tool, but the winery is locked into buying from that grower. Legally, they can't change the content without changing the label.
"If you don't have a winery yourself, that's the most personalized branding you can do," he says. AM
Debby Hartke is a writer and communications consultant based in St. Louis, Mo.