Tough business climate will test North Coast wineries in 2019

Wineries will have to grapple with flat sales and a consolidated marketplace making their business much more difficult as they head into 2019, industry leaders and analysts said last week.

Recent events foreshadowed those expectations, particularly the North Coast grape harvest that wrapped up a month ago. There was an excess crop, many buyers were reluctant to buy the surplus grapes and more wine was forced into the bulk market. Wine sales for the past 52 weeks as of mid-July declined 0.1 percent in volume, according to Nielsen. The dollar volume of those sales advanced 1.7 percent.

“I’m sorry it sounds like gloom and doom. But it is like it is,” said Bryan Foster, national sales manager of strategic brands at Turrentine Brokerage in Novato, at the seventh annual North Coast Wine Industry Expo and Conference at Sonoma County Fairgrounds. “We have hit a plateau.”

Wineries are taking steps to try to adjust, which is especially difficult given consolidation among wholesalers and grocery stores.

“The game is going to be stealing share,” said Dale Stratton, vice president of commercial insights at Constellation Brands.

Most wineries outside the multinational companies have to devote much of their business in selling direct to the consumer, many through their own wine club.

Kosta Browne, which this summer was acquired by private-equity backed Duckhorn Wine Co., recently opened a tasting room in The Barlow. That allowed customers to build a stronger relationship with its brand, which has been pioneer in the cult pinot noir wine sector.