New Chapter for Vineyard Business

(Wines&Vines) - In preparation for the 2013 Vineyard Economics Seminar on May 23 in Napa, founder David Freed conducted a survey of attitudes and concerns among wine industry executives.

Freed, who also is chairman of Silverado Premium Properties, a leading wine industry vineyard investment company, added some big concerns of his own to the findings.

“Through the years, the industry has cited the wheel developed by Bill Turrentine of economics 101: When grape prices rise due to shortages, people overplant, then prices drop and the cycle continues.”

For example, in 1995, prices were way up and people planted heavily. In 1998, wine grapes were in oversupply. Unfortunately, says Freed, “That’s the last time the prognosis worked.” He notes that there wasn’t much planting from 2005 to 2008 as would have been expected, and in fact, there hasn’t been much vineyard planting in California between 2008 and 2013. California non-bearing (newly planted) acres are down from 2001, yet consumption has grown at 2%-3% annually even during the recession as people traded down.