www.montereycountynow.com JUNE 19-25, 2025 MONTEREY COUNTY WEEKLY 17 decline is oversupply. Wine brands had been experiencing heady times. Beer consumption in the U.S. peaked in the early 1980s. Meanwhile— spurred by the famous “judgment in Paris,” where California wines beat the best of France in a blind tasting, the Hollywood hit Sideways and some prosperous years—interest in wine took off. Garrett Bowlus of Albatross Ridge, with vineyards in the hills above Carmel Valley, recalls being in Oregon’s Willamette Valley in the early 2000s. He watched people arrive in private jets from places like Texas to load up on cases to fill their personal cellars. The number of vineyards in that region doubled in just a few years, thanks to low interest rates and corporate brands expanding. “The big beverage companies went on a spending spree over the last 20-25 years,” he says. “They were thinking market share.” In the early 2000s, the wave of young winemakers that established California vineyards in the early 1970s began to age out, or their families tired of the challenges of farming. In Napa County, few of the wineries from that original entrepreneurial rush remain under family ownership. Seeing steady market growth, wine conglomerates and private equity firms began purchasing smaller operations. Talbott Vineyards, for example, sold to E&J Gallo in 2015. While Gallo maintains a diverse and balanced portfolio, many corporate owners sought quick expansion—not only of acreage, but also in the amount of wine distributed. “That was not sustainable,” Bowlus says. “We’ve had nonstop growth since 1991,” Heidi Scheid of Scheid Vineyards adds. “There was a lot of optimism.” A correction between supply and demand was bound to happen, winemakers agree. And on that matter, there is little panic. The market has always experienced up-and-down trends. Even with recent losses, wine consumption in the U.S. remains well above 2000 levels. Global production, meanwhile, plunged almost 5 percent in 2024. “A lot of vineyards have been removed,” Scheid points out. “If we produce an average harvest, we’ll be closer to balance.” There are, however, a slew of other factors at work. And those have been troubling many in the wine industry. ••• Decades may have erased Scheid’s embarrassment. She readily tells of her first encounter with wine, when not yet of legal drinking age. “Mine was Boone’s Farm Tickle Pink,” Scheid says with a laugh. While the fruity and overtly sweet Strawberry Hill was the label’s most popular bottle, Tickle Pink had a friendly cotton candy appeal. Others in the industry share similar stories, often chuckling with chagrin or even a regrettable memory—wine coolers, Cold Duck, Blue Nun, MD 20/20. The bottles were affordable, sugary and, with the wrenchingly notable exception of “Mad Dog,” relatively impotent. While fine wine has always been something consumers aged into (“You’re not going to start by drinking Pinot [Noir],” Scheid notes), trends show young adults moving away from wine—and alcohol in general. And that has furrowed some brows. Silicon Valley Bank’s analysis put the situation bluntly. If oversupply was the primary cause of the market imbalance, tearing out vineyards to reduce cut production would bring an easy correction. But the study highlights “an unprecedented change in consumer demographics and attitudes.” Just 20 years ago, according to survey data from Gallup, young adults made up the segment most likely to drink on a regular basis. In 2023, only 38 percent of young adults reported drinking regularly, compared to almost half of middle-aged Americans. In addition, while earlier generations learned that red wine in modest amounts had health benefits, many young people today fear that even drinking alcohol in moderation can be harmful. Gallup’s report found that as recently as five years ago, just 34 percent of Americans aged 18-34 considered a few drinks as unhealthy. That figure now stands at 52 percent. Boone’s Farm and wine coolers were entry-level wine drinks in an era when American wines were still gaining traction. For many people— especially those with less disposable income—beer or spirits were the average day alcohols. Fine wine was more sophisticated, meant for occasions. That one segment of the young adult market is spurning alcohol while the whole of the group is imbibing less frequently is to the wine industry like a war on two fronts. Despite the past appeal of novice wines as a gateway to the good bottles, the industry has in general been stubborn. Wine has a bottle, a cork, a mystique and a price point. The global firm Tetra Pak introduced lightweight, portable containers for wine in the 1980s. These were easy to carry for cycling or other outdoor activities. Boxed wines also reached the market, and in 2003, Constellation Brands took a stab at revolutionizing this segment by introducing Black Box, a more premium wine with a handy pour spout. But the fine wine labels—and wine aficionados themselves—scorned such innovations. Canned wine met resistance, as well. Meanwhile younger generations are turning to pre-mixed cocktails, cannabis-infused drinks, spritzers, flavored waters and other drinks. “There’s concern about the spritzer market, concern about the no-alcohol market, there are CBD-infused drinks,” observes Sabrine Rodems, winemaker for Wrath and Scratch. “There are a lot of options for young people.” Wine scholar Mike Veseth of The Wine Economist newsletter summed up the industry’s fear of a sustained generational shift in a tone of resignation. He told NBC News in January Top: Bottling and packing cases at Albatross Ridge winery in the hills near Carmel. There are a lot of upfront costs before bottles hit the shelves. Bottom: Vineyards cover more than 40,000 acres of Monterey County. In 2023 the winegrape crop generated $194.6 million. DANIEL DREIFUSS DANIEL DREIFUSS
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