The Lodi Grape Festival this weekend promises to be as spirited as ever, with wine tastings, live music and more.
But make no mistake: These are hard times in wine country.
A flood of imports, tariffs, health warnings about alcohol consumption, canceled sales contracts and excess inventory have all combined to sour California wine grape sales like a fine Chablis turning to vinegar.
The pain is especially acute in San Joaquin County, where grapes are the third most valuable agricultural commodity, behind milk and almonds. County Agricultural Commissioner Kamal Bagri reported this week that the value of the grape harvest fell nearly 19% last year to $319.3 million compared to the year before. She blamed lower yields and prices for the drop.
Bagri told Stocktonia that 6,000 to 6,400 acres of grapevines have been taken out of production in San Joaquin County. Some growers are letting their unsold wine grapes rot on the vine.
“We are struggling right now. We are struggling at all ends,” Stuart Spencer, executive director of the Lodi Winegrape Commission, said in a presentation at the San Joaquin County Board of Supervisors meeting Tuesday. “Our margins are getting squeezed and pinched at every step of the way.”
Making matters worse, Lodi grape growers are split over a proposal to impose a 1.5% levy on wine buyers that would be used to boost marketing.
The goal is to raise the profile of the region to something closer akin to more famous California wine destinations, like Santa Barbara County or Napa. The tax would raise $630,000 a year to create the Lodi Winery Business Improvement District. The Board of Supervisors approved advancing the process, but the proposal is due to come back for public hearings on Oct. 7 and Nov. 18.
The Winegrape Commission said other wine grape growing regions in the state, including Temecula, Livermore and Amador County, have improvement districts with levies ranging from 1% to 2%. With about 78% of Lodi wine sales being made in California, the goal is to lure more wine lovers to the region.
“We need this tool to promote our wines,” Spencer said.
Wes Rhea, CEO of the Visit Lodi tourism promotion organization, endorsed the plan. He said robust winery visits drive more hotel nights and helps related businesses. At this point, the tourist-dependent region can use all the assistance it can get, he said.
“We have some days we may have only one or two customers during the week” said Steve Felton of Klinker Brick Winery. “We need help. The time is now. If we wait longer and longer, we just miss the boat.”
Some proponents downplayed the emotional appeal and went straight to a marketing pitch.
Robert Smerling of Cabana Winery said a depressed wine market is the perfect time to launch a campaign.
“You cannot gain market recognition when the market is booming” as advertisers and promotors spend freely, he said. “The only time you can gain an enormous piece of the market share — get recognition — is when the economy is in turmoil.”
And in the wine world, that’s now.
Others, however, said the tax will drive a wedge between wineries and their customers.
People are cutting back, not just in Lodi but everywhere — Las Vegas, Napa and other tourist destinations, said Rachele Spaletta of Intercoastal Winery. Customers shouldn’t have to pay, she said, for a winery’s marketing. They’ll resent being hit with an extra charge aimed at bringing in other customers.
Customers don’t want to be “nickel and dimed,” said Jenise Vierra of St. Jorge Winery, insisting that is exactly what the tax would do.
She also pointed out how the tax issue is creating more friction among growers already beset by difficulties in the industry.
“This is dividing us,” Vierra said.