Challenging year ahead for wine market

The U.S. economy may be showing small signs of life, but it probably will take another year for Sonoma County grape growers to notice an improvement, wine industry analysts warned Thursday.

“I think 2010 is going to be challenging,” Brian Clements, a senior partner at Turrentine Wine Brokerage in Novato, told the audience at the Sonoma County Winegrape Commission’s annual Dollars and Sense conference.

Clements is hoping for a light-to-average grape crop this season, a turnaround in the economy and then by 2011 “we see the market come back into balance again.”

About 500 people attended the annual conference, held Thursday at the Wells Fargo Center for the Arts. The commission represents 1,800 vineyard owners in Sonoma and Marin counties.

The worst of the drop in U.S. consumer spending appears over, said Brian Lechner, a client director with The Nielsen Company, which tracks American spending and entertainment viewing habits.

“But we’re kind of on the slow road to recovery,” he said.

A “new normal” is emerging in dining trends, he said. Consumers are dining out less, especially at white tablecloth restaurants that offer high-end wines.

Shoppers also are looking for deals, with sales “stellar” for wines priced from $3 to $6. But some shoppers also are “trading up,” and many stores are strongly promoting wines at $20 a bottle.

“I think that’s a pretty positive trend for wine,” Lechner said. The wineries that recognize the changes in consumer spending will succeed in the near term, he said.

Grower and vineyard manager Dane Peterson said the speakers confirmed his sense that “we’re through the worst of it.” Even so, Peterson, whose own vineyard is in the Dry Creek Valley, agreed that it could take time for the industry to experience better times.

“When things turn around,” he said, “the grower’s going to be the last one to feel it.”

The state wine grape crop grew roughly 10 percent last year to about 3.3 million tons, the best harvest since since nearly 3.8 million tons in 2005, according to Turrentine estimates.

But prices fell significantly for all varieties. Even for highly desired pinot noir, the price in Sonoma County fell from $2,881 per ton in 2008 to an estimated $2,293 last year.

Even so, Clements predicted that pinot noir acreage in California will increase from less than 10,000 acres in 1995 to 50,000 acres by 2013. He attributes much of the varietal’s popularity to the 2004 film “Sideways.”

“What a difference a movie can make,” he said.