Monterey County grape growers adapt to new market

Salinas Valley a 'backbone' for low-cost wines

Monterey County grape growers are profiting, if not prospering, from a trend toward less expensive wines.

Demand for California wines has risen slightly despite the recession or because of it. Consumers are favoring bottles in the $7-to-$15 range, whose content largely comes from Central Valley grapes.

The Valley's higher yields and lower costs keep prices down. But the wines might not sell as well if they didn't also contain grapes from Monterey and other coastal counties.

Grapes grown on the coast have more flavor, more color, more acid and a lower pH, said Richard Smith, owner of Paraiso Vineyards in Soledad.

"The wonderful thing about the Central Coast is that we are the backbone of the $7 to $15 wines," said Smith. "Really nice table wines that are competitively priced usually have a Valley and a coastal component. Overall, Monterey County is in the sweet spot."

At Scheid Vineyards in Salinas, Chief Operating Officer Kurt Gollnick was satisfied, if not thrilled, with where the wine market is going.

"That $7-to-$15 works for producers," Gollnick said. "It fits our cost structure, but it ain't the glory days we had a few years ago. The margins are tighter than they used to be."

Retail sales have been strong enough to keep Paraiso Vineyards profitable even though it had been making 60 percent of its sales to restaurants, where demand has fallen. Before the recession, you might find a Monterey County wine for anywhere up to $80 in a restaurant.

"It's really the restaurant sales that have impacted the higher-priced wines," Smith said.

Paraiso got a nice bump in July from a favorable review in Wine Spectator magazine. The company sold in six weeks what it had sold in six months.

Most Monterey County grapes are made into wines somewhere else, like Napa or Sonoma. Paraiso, for one, only makes wine out of 3 percent of its grapes. Seventy percent of grapes here are shipped out of the county, Gollnick said. It's a situation many growers and value-added exponents would like to see changed.

"Unfortunately, most [grapes] make it into labels that say ÚCalifornia' and don't give attribution to our local growing region," Gollnick said.

That's in contrast to wines from Napa and Sonoma and even Paso Robles which bear the name of the place of origin.

Gollnick favors creation of a winery corridor in an update to the county's general plan. The corridor would ease the permit process for new vintners and increase production and marketing activity, he said.

Scheid Vineyards tried to anticipate shifts in the market by completing construction on a wine-processing plant in Greenfield in 2007.

"By processing the grapes into wine, we're able to release the wines when markets are more favorable in price," Gollnick said. "You take a perishable and turn it into lasting value. Monterey has a great disproportion of acres to winery, which turns us into a commodity-producing region."