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Placer County wine on the way to China?

Global wine shortage, increasing demand could make shipments a reality
By: Gus Thomson, Journal Staff Writer
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A couple sharing sweet nothings and a bottle of Wise Villa Winery wine in a Beijing restaurant?

A Mumbai family sitting down to dinner with a bottle of wine made in Placer County prominently set in a place of honor?

It’s more of a possibility as a global wine shortage looms large after a drop in European production that is being matched by a growing demand for the product in countries such as China or India.

A report from Morgan Stanley Research released this week stated the global market was undersupplied in 2012 by an estimated 300 million cases. It was the largest deficit the wine world had experienced in almost half a century.

The Morgan Stanley report blamed a sharp drop in wine production in Spain, France and Italy – much of it attributed to a decrease in the amount of land in those countries growing grapes. While the European wine industry is declining, the demand for wine in China has grown 150 percent since 2008.

Wise Villa Winery, on Wise Road between Auburn and Lincoln, is positioning itself to possibly tap into the China market. Owner and chief winemaker Grover Lee is planning to travel to China to show off Wise Villa wines to some of the top purchasers in China.

Kevin Luther, a winemaker with Wise Villa, said that European wines are playing catch-up with more distinctive wines from California, as well as Australia and Argentina.

“Ever since Bottle Shock in the 1970s (when California wines started to compete on the world stage) we’ve been on a consistent upward trend,” Luther said. “We may end up seeing $100 bottles of Wise Villa Winery wine in China before long,”

Jocelyn Maddux, part of the family wine-making business at Lone Buffalo Vineyards, also on Wise Road, said that Placer County’s new wave of wineries are more “micro” than “macro.” But the idea of exporting wine to China and other markets is an opportunity worth looking at in the future, she said.

“Only a few wineries even have distribution outside of California right now,” Maddux said. “It could be an opportunity, but I don’t know if our industry is really at a point of looking at the larger global market.”

While Europe’s grape-growing regions are having their challenges, California and Placer’s harvest was bountiful this season.  

“Everyone’s saying it’s one of best harvests ever,” Maddux said. “It started early with hot weather but then there was a cooling period for extended ripening. Everyone’s finishing up their harvests this week or next.”

Stewart Perry, Fawnridge Winery owner in Auburn, is on the board of California wine-industry advocacy group The Wine Institute, which tracks worldwide wine issues.

The fact that China and India have an emerging interest in wine is sure to put pressures on global production, Perry said.

Perry said he sees the impact of a wine shortage pressuring supplies of lower- or mid-priced wines, forcing wine buyers to move up to bottles in the $20-or-above price range.

Fawnridge has witnessed a better crop of grapes and increased sales this year.

“At Fawnridge we’ve seen an increase in sales, but that’s likely because of the improvement in the economy over past few years,” Perry said. “It hasn’t been driven by the so-called wine shortage.”

Wine production reached an apex in 2004 and has been declining since then, the Morgan Stanley report said.

If conditions fostering a wine shortage persist, Luther said Placer County vintners are well-positioned to continue seeing good harvests. Global warming has been producing weather conditions in areas such as Northern France that have cut into grape production, he said.

“Northern France is suffering because of more rains whereas in California, it has typically in the past been a little too warm and dry,” Luther said. “It could be one of the side effects of El Niño or just good luck. But when Europe struggles we have good years, particularly in the foothills and Placer County.”