If the wildfires of 2020 hadn’t already served as a wake-up call for California’s wine industry, just wait until it sees the bill.
The damage to the state’s wine companies by last year’s fires, according to one industry analyst, may amount to as much as $3.7 billion. That’s taking into account the losses of property, wine inventory, grapes and future sales of the wine that those grapes would have made.
It’s just an estimate, emphasized the analyst, Jon Moramarco of the firm BW166 and author of the Gomberg Fredrikson Report, a widely cited and reputable annual resource. He partnered with the California Wine Institute to undertake the study that resulted in that $3.7 billion figure. It’s the first such estimate of the economic toll that the 2020 fires took on the wine industry; other sources will likely come out with their own estimates at later dates.
The reason they sought to quantify the damage, Moramarco said, wasn’t just for shock value. Rather, it was to make the point that the stakes for the industry are high — and will continue to mount if it doesn’t invest in more research about how to mitigate the effects of wildfire and smoke on wines in the future.
“UC Davis probably needs $10 million over five years,” Moramarco said, referring to the country’s preeminent academic institution for wine science. “That’s a lot of money, but it’s a small amount of money relative to the risks that we face.”
Moramarco shared his findings during a webinar on Tuesday about the state of the wine market, hosted by North Bay Business Journal and open to the public. He stressed the idea that “the industry needs to fund this research itself,” he said. “Whether we like it or not, tax dollars are not going to pay for it.” He landed on the $10 million figure based on conversations with UC Davis scientists, he said, though the research would not need to be confined to that university, and Moramarco himself does not have a specific research proposal.
California has never seen anything quite like the wildfires of 2020, and they affected wine businesses in particularly painful ways. A series of lightning sieges in August caused fires to break out across the state, all at once, right as the wine harvest was beginning — thus imperiling the viability of an unprecedented volume of California wine grapes. Then, in late September, a blaze known as the Glass Fire surged through Napa and Sonoma counties. It ultimately destroyed more than 1,200 buildings, including about 30 winery or vineyard properties.
At a time of year when vintners would typically be throwing harvest parties and stomping grapes, they were instead faced with mounting uncertainty about the viability of their crop. Many of them decided not to make some or all of the wine that they’d planned to bottle because of the smoke damage. Months later, wineries are still deliberating over those decisions.
Some of them can collect insurance or stomach the losses of one year’s production. But what will those wineries do when they find themselves faced with another smoke-tainted crop a few years from now, Moramarco asked? “It’s unsustainable to say ‘we’re not going to make any wine’ every time this happens,” he said.
The COVID-19 pandemic has made these considerations all the more urgent. The closures or restrictions of two of the main sales channels for California wines — tasting rooms and restaurants — have already led to difficulties for many businesses, especially small wineries, and Moramarco said it’s unrealistic to expect that things will return to normal anytime soon.
He ventured a rough estimate that the number of restaurants selling wine may decline by 25% in the medium-term. “And in the restaurants that can get back to business, you’re going to see their menu items reduced, their wine lists shorter,” Moramarco said. “They’re going to be much more cautious about how they’re spending.” Fifty-page lists full of prestige Napa Cabernet may become rare.
This roughly $10 million worth of scientific research that Moramarco is suggesting would mainly address how wineries can mitigate the effects of wildfires and smoke — essentially, how to live with this new reality. Techniques that wineries can use to lessen the taste and smell of smoke in the wines. Better, more efficient methods to test for the smoke compounds that lodge themselves inside the grapes. A database of baseline chemistry levels for various types of wines, so that wineries can understand how worried they should be when they learn that their grapes have a certain level of a compound that could manifest as smokiness.
“We’re just trying to put things into perspective,” Moramarco said. Spending $10 million to save what could potentially be a $3.7 billion annual bill — well, suddenly that doesn’t sound like such a bad bargain.
Wine of the Week
This week, our featured wine is an affordable example of one of my favorite white grape varieties, Chenin Blanc. The Field Recordings Central Coast Chenin Blanc 2018, whose fruit comes from a number of old-vine plantings, is a remarkable value at $20, and the sort of wine that I believe will appeal to a diverse range of palates. Here’s my review.
...and mocktails!
In a departure from my typically alcohol-fueled reporting, I spent some time with nonalcoholic drinks in honor of all my readers observing dry January. Although my philosophy for booze-free drinking has always been to just drink something that’s not trying to taste like booze, this time I actually found some pleasant mocktail ingredients. You can find my mocktailing tips and top five nonalcoholic drink recipes here.
What I’m reading
• The always entertaining Randall Grahm has written a characteristically dense-but-fascinating blog post about how California should define its own wine identity. Rather than compare California Pinot Noir to Burgundy or our Syrah to Cote-Rotie, Grahm writes, maybe the paradigm should shift toward asking how these grape varieties can best reveal California terroir. The grape varieties are simply the means to the end, no longer the end in themselves. It’s an interesting argument (and one that, it should be noted, serves Grahm’s own interests at his Popelouchum project, which I’ve written about before).
• More than 50 restaurants, wineries and other businesses in Wine Country have sued Gov. Gavin Newsom, claiming they should be allowed to reopen for outdoor dining, reports The Chronicle’s Janelle Bitker. It’s the latest suit to be filed against the governor over his pandemic reopening policies, after complaints filed by the owner of Napa’s Caymus Vineyards and a group of craft breweries.
• The United States has a new president as of yesterday morning, and one thing the country’s wine industry will be watching for is whether he will reverse any of the tariffs on European wines, especially the new fee that took effect last week. In SevenFifty Daily, sommelier Christy Frank considers the likelihood of President Joe Biden acting quickly on the matter.
Drinking with Esther is a weekly newsletter from The Chronicle’s wine critic. Follow along on Twitter: @Esther_Mobley and Instagram: @esthermob
January 22, 2021 at 01:07AM
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The 2020 wildfires could cost California’s wine industry $3.7 billion — but it doesn’t have to be that way - San Francisco Chronicle
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