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How sick is our Golden Goose?

How sick is our Golden Goose?

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By now, most people in the Napa Valley are aware of the acres of unpicked grapes and thousands of gallons of unsold wine. The problem includes Sonoma County and stretches from Washington state to Oregon and Santa Barbara. Experts believe that in the face of changing consumer demographics and drinking habits (Millennials’ being one of them) and an industry growth rate at a mere 1.2 percent, the problems will last for many years.

As valid these generic factors are, it is difficult to throw the Napa Valley into that mix. This is the queen of wine quality in the nation after all and ought to be immune to them.

Featured in a last February Press Democrat article, Paul Mabray of Napa-based Emetry Consultants believes that our wine industry does not understand its customer, neither do most of its members have the resources (like E&J Gallo and Treasury) to adjust to the new marketing digital age. According to Mr. Mabray, both Napa and Sonoma counties still view tasting rooms the best way to draw customers. But direct-to-consumer sales now make up 61 percent of an average family winery’s revenue according to a January survey by Silicon Valley Bank. The problem is that this number has been steadily declining over the past five years in Napa and Sonoma counties compared with other regions.

A five-year decline is proof that the model has outlived its sustainable limits. Established basic economic policy would be to limit the supply. Instead our planning officials do exactly the opposite. One more would be to make access to tasting rooms easier and more pleasant rather than more exasperating as our planners’ policies have been doing while on myopic autopilot.

While Mr. Mabrey sees solutions in adjusting to a digital age of marketing – if you don’t fly to Detroit to buy a Ford, why would you fly in to buy a few bottles of wine? - he is not recognizing the proliferation of wineries and tasting rooms as undermining the second strongest statistical reason why visitors come here: the valley’s natural beauty, the one which inspired wine critic Robert Parker to pronounce the Napa Valley the most beautiful wine region to visit in the world. But this was a few decades ago.

Since then, while overall visitor numbers have not declined, the steady undermining of the overall Napa Valley experience, tasting room visits and direct-to-consumer sales have.

The long-term damage to the Napa Valley has been the long-term refusal of the local government to acknowledge the negative impacts and put the brake to the increasing number of new wineries, their production and visitations just for the asking even when they have flaunted existing laws. Planning officials dress up this practice as a policy “to bring their violations into compliance” all the while assuring the public that in doing so, the impacts are less than significant.

But the piling up of less than significant impacts is finally hitting home, not the least being the spending one full hour driving from Napa to Calistoga at most times of the day and more than two to two-and-one-half from the San Francisco airport. In this fast-moving world – especially for analytically minded Millennials - why would they subject themselves to this ordeal for a few bottles of wine when they can buy them on the internet at a substantial discount and have shipped free to their home?

Many of us have been sounding the Golden Goose alarm but our government officials have been ignoring it as a too-often-invoked slogan and continue to pursue their policy of unfettered growth and unsustainable competition while degrading the environment and the overall Napa Valley experience.

Our farmers, our wine industry and government officials must finally recognize the existential threat unfolding right before our eyes and adjust to a model which safeguards the overall resource. The health and quality of this resource - not wineries at all cost - are the Golden Goose. New ideas sacrifices and restraint while still an option are preferable to digging deeper into the permanent hole of an irreversible negative image and economy.

George Caloyannidis


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