Texas Wines Take the Heat in $1.8 Billion Business

(Bloomberg) - Being the fifth largest wine grape and wine producing state in the U.S. might be worth boasting about, but Texas is not a state that takes fifth place lightly.

With 275 bonded wineries producing 3 billion gallons annually and $1.8 billion in sales, Texas’s wine industry is still expanding. But both climate and sales marketing have made it a struggle to compete with California, Oregon, and other states for bragging rights.

“Our state’s top vignerons are among the bravest, most intrepid and most tortured farmers on the planet,” Houston Chronicle wine columnist Dale Robertson wrote last month. “Late freezes, hailstorms and drought wreak constant havoc.”

In fact, a spring freeze in 2013 killed off most of the grapes in the High Plains appellation vineyards, leaving some growers with no grapes at all.

While drought is a disaster for most crops, grapes make the best wines if they are stressed from lack of water. Texas growers have shied away from Bordeaux varietals in favor of more hot weather grapes like tempranillo and shiraz.

However, better grapes mean fewer grapes, so many wineries are forced to source grapes from California to fill their bottles.

By federal law, if a wine has 75 percent or more of its contents from out-of-state grapes, it must be labeled “For Sale in Texas Only,” with no further designation. So, wines with 74 percent California juice may be labeled Texas wines. (The state of Texas has no such laws of its own.)