Dean to Present Results of Wine Industry Survey

The wine industry is toasting a sales boom that will last three more years even as it grapples with Internet sales and, well, snobbery. That's according to an annual survey of the wine industry conducted by Robert Smiley, dean of the Graduate School of Management at the University of California, Davis. About 475 wineries, growers, distributors and wine sellers responded to the survey. Smiley will discuss the survey results and his views on industry issues when he speaks on "The American Wine Industry: Issues for the Future" at the Wine Industry Financial Symposium in Napa Thursday, Sept. 16. Almost 80 percent of wineries said they were more profitable last year than in 1997 and more than 90 percent expect to be more profitable this year. They attribute the health of the industry to a strong economy and reports of the health benefits of drinking wine in moderation. However, plantings in the Central Valley and Central Coast areas now reaching maturity will contribute to an oversupply of grapes that will lead to price decreases for lower-end wines. The prices of higher quality wines from the Napa and Sonoma valleys will continue to increase at rates greater than inflation. Next to an improved economy, expanding the consumer base was recognized for the first time as the key opportunity for continued wine industry growth, surpassing publicity over wine's health benefits. The challenge, Smiley says, is to make wine a regular accompaniment for meals. "The industry has to figure out how to remove the 'snootiness' of wine, to make wine more accessible." He suggests the industry consider replacing cork stoppers with something easier to open and using smaller bottles more appropriate for serving two people. Regarding the Internet, the survey found most wineries have Web sites but few make direct sales over the Internet. Smiley says vineyards should use the Web sites to let wineries know about the status of the fruit they have under contract as it's growing, and wineries should post reviews of their wine and information about special events. While shipping wine to many states is currently illegal, Smiley says customers are going to want to buy directly over the Internet, and, eventually, state legislatures will have to reconsider allowing direct shipments to consumers in their states. However, he says, wineries do experience a tension between their desire for more direct sales -- they wouldn't have to share the revenue with distributors and retailers -- and maintaining a place on retail shelves. "The more sales you make directly to the customer, the less inclined the distributor is to carry your wine." The eighth annual symposium, to be held at the Silverado Resort, will begin Wednesday, Sept. 15, with afternoon seminars on topics ranging from legal issues to sustainable agriculture. The program will resume at 8:15 a.m. Thursday with Smiley's presentation, and seven other sessions will follow. Attending the by-invitation-only event, organized by the Wine Industry Symposium Group, will be about 400 winery owners and executives, grape growers, financial service providers and other industry professionals.

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Julia Ann Easley, General news (emphasis: business, K-12 outreach, education, law, government and student affairs), 530-752-8248, jaeasley@ucdavis.edu