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California Vintners Feel the Crush of Anti-Alcohol Forces, Increased Foreign Ownership

September 08, 1987|BRUCE KEPPEL | Times Staff Writer

SONOMA, Calif. — Only one of every six American adults now drinks even one glass of wine a week, and--worse yet for California's wine makers--70% of those who do can't recall what wine they last drank.

That may have been a bit hard to swallow for the brand-conscious vintners who gathered here at the very cradle of their industry--130-year-old Buena Vista Winery--to assess the outlook for the year 2000.

While the new century may bring the "golden age of wine" forecast by Richard L. Maher, president of Christian Brothers Sales Co., he and other experts also pointed to obstacles that will have to be negotiated before reaching that promised land.

Growth Threatened

The very setting--ivy-clad buildings erected in 1857 by Hungarian Count Agoston Haraszthy but no longer used to make wine--suggested some of the fundamental structural changes the future holds for the alcoholic beverage industry in the form of internationalization.

Moreover, the host of last month's Vintage 2000 symposium was Marcus Moller-Racke, the 31-year-old president of Buena Vista, whose German family firm, A. Racke, now owns the winery, which claims to be the state's first producer of premium wines.

Aside from the bleak present state of U.S. wine consumption, as described by Donald E. Payne, a psychologist specializing in consumer behavior, the wine industry will have to contend with:

- A likely increase in the federal excise tax on wine and beer, similar to that imposed two years ago on the already troubled liquor industry.

- Continued efforts by anti-alcohol advocates to restrict television advertising and push for further warnings on beverage labels--a campaign that has already succeeded in requiring wine labels to indicate whether the bottles contain sulfites.

- A shrinking number of beverage distributors at the same time that wineries continue to proliferate, making it increasingly difficult to find a niche in an already thin domestic wine market.

But the threat to growth of the wine business by anti-alcohol forces--or "neo-Prohibitionists" as the industry calls them--seemed foremost on the minds of most of the symposium experts. Robert Mondavi, chairman of the Napa Valley winery bearing his name, lamented the lack of understanding of wine's role as a civilizing agent in society.

"Damn it, wine is liquid food!" Mondavi exclaimed.

Dr. David N. Whitten, a senior health consultant to Kaiser Permanente in Oakland who supports wine consumption, urged the industry to seize the initiative by voluntarily making their labels reflect current social concerns by adding, for example, the wording "Alcohol is harmful to your fetus."

"Don't make them cram it down your throats," Whitten advised. Rather than become defensive and inflexible, he said, wine makers should take the position that "we are the new temperance movement," and that wine is the beverage of moderation.

Consumer expert Payne later brightened his somewhat gloomy assessment of the current wine market by visualizing a potential high-growth market for premium wines among the nation's higher-income households. These are increasing with the rise of two-income families, he said, and higher income generally means more education and travel, among other things, which are elements that generally fit the profile of the wine drinker.

Indeed, U.S. wine consumption per person, though extremely modest compared to Europe, continues to grow even though beer sales have flattened and consumption of spirits has plunged more than 16% in the last five years, according to Bill Slone, director of New York-based Beverage Network, a group of trade publications.

"California wines have really come into their own over only the last 10 years or so," Slone said in an interview, "and sales should increase to reflect the growing familiarity of consumers with wines."

According to the Wine Investor, a Los Angeles newsletter, shipments of all table wines--domestic and foreign--within the United States grew 17% between 1982 and 1986 to top 600 million gallons for the first time. U.S. shipments of California wine increased 26.4% to 365.8 million gallons last year, commanding 86.3% of the national wine market (up from 82.8% in 1982).

Much of this growth has come from the popularity of wine coolers--the current manifestation of the American consumer's seeming penchant for fizzy, sweetish drinks--but higher-priced wines are commanding a significantly larger share of the market, too, Frank M. Woods, who heads Sonoma County's Clos du Bois winery, told the Buena Vista symposium.

Woods predicted that by the year 2000 annual production of premium wine will triple, to 70 million cases, and account for 28% of total wine sales, up from 10%.

The number of wineries has increased, too--not only in California but also in the nation's other wine-producing states. However, Woods warned, at the same time the number of distributors, both nationally and internationally, is shrinking.

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