In the simplest terms, small family-owned grower-producers do not have reasonable access to direct-to-consumer (DTC) sales under current local regulations.
The DTC channel undeniably represents the only viable sales channel for small grower-producers. This reality has grown more acute during the COVID-19 pandemic, as all other sales channels accessible to small producers have disappeared: restaurants have shuttered, foreclosing on-premise sales, consumer events are canceled, and distributors outside of California have consolidated and/or gone out of business, leaving extremely limited wholesale opportunities for mom-and-pop brands.
In Napa County, unlike any other county in California, small producers are required to develop a winery production facility as a condition precedent to hosting tours and tastings at their facility. Thus, in order to host tastings, a grower-producer must convert land from agricultural use to a production facility, even if the small business need is limited to hosting tastings and introducing consumers to their wine.
This results in unnecessary development and conversion of agricultural land, which is directly antithetical to the stated purpose of the Winery Definition Ordinance (WDO). It is also the institutionalization of an insurmountable barrier-to-entry for grower-producers: small grower-producers who disproportionately rely on DTC sales for economic survival are also the businesses least able to financially resource a production facility.
These small grower-producers manufacture wine through a perfectly legal community-based co-production method widely endorsed throughout the wine industry. In every other wine community in California and beyond, small grower-producers are encouraged to produce wine in crush or cooperative facilities to limit industrial development, lower barriers to entry to the market, and maximize the efficiency of resources across small-production communities.
In Napa, however, this optimized resource utilization devastatingly forecloses these small producers from building a sustainable business. Because they don’t own their own production facility, they cannot conduct any meaningful DTC operation.
This limitation on access to DTC sales does not exist outside of Napa Valley, and unnecessarily restricts small grower-producers who are financially unable to construct a full-fledged production facility from generating a stream of income necessary to maintain the viability of their business.
Accordingly, small grower-producers have few, if any, opportunities for financial success in Napa. It is well understood that farmers with de minimis farmland cannot survive off farming income alone. However, these same families cannot afford to build a sustainable business in wine production because they cannot sell their wine without building a winery, and they cannot afford to do that, either.
These families are forced to operate in violation of current regulations (which is widespread) to survive, stop agricultural production and convert to other economic industries, or sell their properties. This reality is not the manifestation of any of the objectives of the WDO.
Contrary to widespread misunderstanding, Save The Families Farms (STFF) does not promote the eradication of the WDO. STFF members are active advocates of the WDO, and ardent supporters of preserving the agricultural and family-farming focused foundation of Napa Valley. The legislative action STFF proposes does not require re-tooling of the WDO and, in fact, one of the two primary legislative calls to action does not implicate or require changes to the WDO in any way.
The other proposals require amendments to or as-applied exemptions from certain limited provisions of the WDO to align the application of the WDO with its stated intent and original purpose. Some limited provisions of the WDO, as applied, will continue to push small grower-producers out of the wine industry altogether as an unanticipated consequence of application at the time of drafting. This has, and will continue to, disrupt the heritage of Napa Valley as a family-centric farming community dedicated to supporting small-agricultural operations. In order to resuscitate the intended purpose and spirit of the WDO, the document must be perfected, not abandoned.
STFF believes that if Napa County does not take action immediately, small family businesses and farms, operating as grower-producers as a primary business, will close and/or leave Napa Valley for lack-of-access to economic viability. This end-cycle has been accelerated in the last three years by devastating wildfires, market factors disproportionately affecting small business and wine producers within Napa, and now, most acutely, as a result of the COVID pandemic.
Lindsay Hoopes is Proprietor/CEO of Hoopes Family Vineyard and is on the Executive Committee of Save The Family Farms Napa Valley. This item first appeared on the Save the Family Farms blog.