Amid a tough market, wine execs see opportunities
The wine industry is in the middle of a cyclical downturn, but Central Coast vintners have some advantages that will help in recovery.
That’s the view of Rob McMillan, chief of the wine industry lending unit at Silicon Valley Bank. He told the Central Coast MIT Enterprise Forum on June 17 that industry revenue growth has plunged from 20 percent to zero during the past two years amid a sharp pullback in buying, particularly among restaurants.
Richard Sanford, a Santa Barbara County wine pioneer, described the downturn as a “reset” for wine industry pricing. “We are finding that people will buy whites at under $20 per bottle and reds at under $30,” he said, adding that the days when restaurant goers and retail buyers would pay more than $50 for a bottle of wine are over — at least until the next industry upswing.
Sanford, owner of Alma Rosa Winery & Vineyards in the Santa Ynez Valley and founder of Sanford Winery, said there still is a lot of opportunity for Santa Barbara and other Central Coast regions to make a profit from premium wines that sell for more than $15 per bottle. McMillan said that because land prices on the Central Coast are much lower than in Napa and Sonoma counties, the region remains an attractive location for wine grape growing.
Sanford also said the future of the industry may lie in sustainable practices that grow better-tasting wines that attract buyers who want organic products.