Back to the Future!

California wine industry is in a sea change. Industry consolidation, aging core consumers, improving world economies and complacency are fomenting major changes to the staid, high-brow, industry we have known and loved.

The industry is consolidating into several global players reminiscent of the current grocery industry. These mega-players have the power to command shelf space at the retail level, control distribution channels at the wholesale level and dictate price and terms at the supply level. As with many consolidated industries, choice and preference opportunities are sacrificed for economic and logistical advantages.

The "boomers" are aging and with their increasing wealth they tend to be drinking better but less. A potential benefit to the higher end players and potential disaster to the high-volume, value lines. Only now are the marketing departments embracing the next generation of consumers with their lack of reverence for all that was wine with new labels, packaging and age specific targeting. The newly launched Virgin Vines by Richard Branson a notable example of this change. Change will be slow and small, agile, producers with courage to adapt will be rewarded.

The changing world economy and the change in nations standings will alter the source, production and marketing of wines globally in radical and diverse ways. The rising fortunes of China, the changing tastes of Eastern Europe, aging of America and the rise in Latin America will alter the world of wine. We are not prepared. We lack products to meet these changing markets and their taste, packaging and distribution channels. The global players are not prepared for this and lack the ability and the focus needed to prospect these new landscapes. A wonderful opportunity for a small, innovative, nimble company?

Meanwhile back on the farm, in the vineyards and wineries of California and elsewhere, we are plodding along. Thankful for the rebound in our business cycle we are setting ourselves to repeat the mistakes of the past. Complacent in our past successes and current good fortune and riding the wave of 5000 years of wine history, we "dogged another bullet", totally unaware the actual game we think we are playing may no longer be governed by the same rules.

The cumulative impact of these changes is opportunity. With the global giants providing a safe ceiling in the marketplace and their focus on market share and profit margins, there exits a great void for an established player or a rising upstart to enter the market and establish new channels, new brands, new products and blends and meet the growing needs of, as yet , untapped and little understood markets