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California's Bittersweet 2002 Harvest

Coming during an economic slump, this year's huge crop could hurt growers, but be a boon for consumers.

Tim Fish
Posted: August 19, 2002

With a weather-perfect spring and summer in California this year and a record-setting crop potentially bulging on the vine, you'd think that growers and vintners would be kicking up vineyard dust in a happy harvest two-step.

But for the California wine industry, 2002 is a bittersweet harvest. Consumers may be the only ones doing any dancing (in the aisles of their local wine shop) over the vintage.

After nearly a decade of unprecedented growth and record profits, the industry is suddenly in a slump. A sluggish economy, combined with a wave of new vineyards coming into production, means supply is greater than demand for the first time in years.

With wine clogging up the distribution pipeline, even collectible wines -- long gone from retail stores -- are increasingly back on the shelves. Consumers are beginning to see the first sign of lower prices as producers eliminate inventory in anticipation of the new vintage.

But it's hard for winemakers to complain. To quote the classic 1970s comedy Young Frankenstein: "It could be worse. It could be raining." While fall could bring challenging weather, the growing season leading into harvest has been nearly flawless.

"You never really know until you start picking the grapes, but as long as we don't get any major rain events in September or October, everything looks good," said Dennis Martin, director of winemaking for Fetzer Vineyards, which harvests grapes from throughout California.

The growing season has been typical. Temperatures early on were cooler than normal in some regions, yet slightly higher in others (in the North Coast, a July heat wave pushed temperatures into the 90s and low 100s for days), growers reported. A hard spring rain during bloom in some areas of Northern California reduced the size of several crops, particularly Merlot, but also Chardonnay and Pinot Noir in Carneros.

The sparkling-wine harvest got under way at some estates last week, and crush was poised to go into high gear in mid-September, also typical.

What isn't typical is the size of the crop. Yields are expected to pass the record 3.3 million tons of wine grapes that the California Agricultural Statistics Service recorded for the 2000 crush. The North Coast Winegrowers Association -- which represents Napa, Sonoma, Mendocino and Lake counties -- estimated the crop size will reach about 403,000 tons in those four counties, up 5 percent from 2001.

The harvest might have been even larger if growers had not significantly thinned the crop over the summer, doing a so-called green harvest. Growers, who are paid by the ton, tend to resist cutting profit from the vine, although wineries argue that a lower yield provides a more intensely flavored wine. Considering the state of the industry, producers such as Fetzer and Kendall-Jackson Wine Estates, which have sizable inventories of existing wine, have been particularly insistent on a smaller crop this year.

"We're talking to our growers all the time," said John Grant, president of Kendall-Jackson Wine Estates. "And we're asking them to reduce tonnage and improve quality."

For growers such as Ulysses Lolonis, who is president of the North Coast Winegrowers and farms 300 acres in Mendocino county, it's not easy. "It used to be 'Wow, I've got a big crop this year, and I'm going to make a lot of money.' But now it's 'I'm going to have to spend a lot of money to thin and then make even less on the crop.'"

Nick Frey, executive director of the Sonoma County Grape Growers Association, said growers are trying to look at the long-term health of the industry. "But if you're pretty leveraged and have notes to pay to the bank, it's a pretty bitter pill to swallow."

Even with a radical thinning, grapes such as Chardonnay, Merlot and perhaps Cabernet Sauvignon are still expected to be in oversupply, according to growers and vintners. Some growers, such as Lolonis, are having trouble finding a home for all of their grapes, and more than a few growers are expected to let some grapes rot on the vine, something California hasn't seen in recent years.

Demand was so high during the boom, many growers -- particularly if they were new to the business -- didn't bother arranging for long-term contracts, a decision that is haunting them this year.

"I've heard more than one say they were going to make their own wine this year," said Ned Hill, president of the Sonoma Valley Vintners and Growers Association. Hill oversees 400 acres of vines, including Durell Vineyards.

Bad news for growers and vintners, however, could translate into good news for consumers, if the quality of the vintage lives up to anticipation. "And consumers," Martin said, "will soon be taking advantage of some of those discount prices."

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