The multiple challenges that 2020 has presented may ultimately help to provide some relief to the winegrape oversupply. The pandemic created a variety of issues for the wine industry. Tourism dried up, consumer behaviors shifted dramatically, and working conditions had to be overhauled. The multiple record-setting wildfires added another layer of difficulty to the year. Fires have not only destroyed and damaged vineyards, but the unrelenting smoke has also taken a toll on the industry. Without minimizing the problems that the industry is facing, there may be a mild silver lining to 2020.
“This situation between us having a short crop to begin with and then also the effect of smoke limiting the amount of coastal grapes that are going to get processed this year is actually going to have a balancing effect for us in the marketplace. It’s really just a balancing effect for the current time,” said Jeff Bitter, President and CEO of Allied Grape Growers. “Ultimately, we’re still structurally oversupplied by an abundance of winegrape bearing acres. That will still need to be addressed as we move forward.”
The troublesome events of 2020 will not fix the situation. However, they may provide a window of opportunity to move production more in line with demand. The winegrape oversupply is something that industry members have been closely monitoring. Bitter emphasized reducing winegrape acreage at the most recent Unified Wine and Grape Symposium. The number that was being discussed earlier in the year was 30,000 acres. That was what was estimated as being necessary to address the winegrape oversupply.
“We’ve removed about a net 15,000 acres over this removal season. It looks like after this harvest we’ll probably see some more removals as well. We may ultimately be working toward that longer-term balance but that has yet to be seen,” said Bitter. “But the chain of events in 2020 will certainly help us to work toward a more balanced market at the current time.”
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