TIME: Almanac 1995

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<text id=94TT0873> <title> Jul. 04, 1994: Agriculture:The Wine Portfolio </title> <history> TIME--The Weekly Newsmagazine--1994 Jul. 04, 1994 When Violence Hits Home </history> <article> <source>Time Magazine</source> <hdr> AGRICULTURE, Page 58 The Wine Portfolio </hdr> <body> Beset by sagging sales, the government and a new bug, California's vintners try to promote their wares By John Elson--Reported by David S. Jackson/St. Helena An old adage has it that the way to make a small fortune in the wine business is to start with a large fortune. For all its aura of romance, making wine is an enterprise fraught with woes--both man-made and natural. Government regulators have been acting lately as if wine were as much of a health hazard as tobacco. Even in sunny, bountiful California, frosts can shrivel vulnerable young grape buds. Untimely rains can ruin a harvest. And periodically, vineyards are assaulted by plagues of voracious insects. Grape growers in Northern California have not one but two of these hungry bugs to contend with. About 30,000 acres in Napa and Sonoma counties, site of the state's most prestigious vineyards, will eventually have to be replanted because of infestation by minute root lice called phylloxera. Now many of those same vineyards, as well as others in Lake and Mendocino counties, are battling even more dangerous pests: tiny insects called "sharpshooters," which spread a bacterium that causes Pierce's disease (PD). Phylloxera can be stymied by regrafting grape buds onto resistant varieties of rootstock. No such defense is available against PD. The sharpshooter aphids attack the moisture-carrying vessels of vines and can kill them off in a year. Particularly vulnerable are vineyards near lakes and rivers, where the bug lives, since spraying with pesticides is banned because of the danger to fish and water. In case of a sharpshooter onslaught, says viticulturist Jim Wolpert of the University of California at Davis, a grower's only recourse is to "yank the vines and start over." The plagues could not have come at a worse time for the California wine trade, whose annual sales exceed $3.6 billion. The Treasury Department's Bureau of Alcohol, Tobacco and Firearms, which regulates the wineries, appears to be following a neo-prohibitionist agenda. The bureau requires wine labels to carry warnings about drunken driving and the danger of alcohol to pregnant women. At the same time, the bureau refuses to allow vintners to promote or advertise research indicating that drinking wine in moderation has some health benefits. Although shipments of American wines abroad reached record highs in 1993, the industry is coping with stagnant sales in the intensely competitive domestic market. Sonoma County alone has more than 135 wineries, and many producers of premium brands find it harder than ever to get space on crowded shelves. In April the Safeway supermarket chain decided to drop 100 of the 1,000 or so labels it had previously carried in stores across the country. Some wineries have found ingenious ways to boost sales and instill brand loyalty. Traditionally, wineries have been financed by bank debt or their owners' wealth. Now a few vineyards are selling stock to the public. A pioneer example is the Chalone Wine Group. In addition to Chalone Vineyards near Monterey, Chalone owns Acacia, Carmenet and part of Edna Valley. Although the shares have never paid a dividend since they were first marketed in 1984, the 10,000 or so stockholders have become enthusiastic ambassadors for the group's wines. One reason: anyone who owns at least 100 shares is invited to an annual celebration party at Chalone to feast on oysters and salmon--and sample freely the group's products. "These people are absolutely rabid Chalone fans," says company spokeswoman Sally Gordon of the 1,200 shareholders who showed up for this year's affair. "You can't buy brand loyalty like that." Investor Peter Truce, 43, says he is not worried about the stock: "It's not a major part of my portfolio. It's a fun part of my portfolio." A more popular way to reach the public directly is through winery-sponsored "clubs." Sterling Vineyard's Collections Club and Grgich Hills' Pre-Release Club, for example, publish newsletters that provide subscribers with discounts on newly released wines and "library" selections of wines in limited production. Sterling, which is owned by Seagram's, recently offered its club members two new Italian wines that the company represents and markets in the U.S.: a white Pinot Grigio and a red Sangiovese. "We're trying to `loyalize' our customers," says Samuel Bronfman II, president of Seagram's Classics Wine Co. "We also want to introduce them to different tastes." Considering all the woes they face, why do winemakers persist? Well, there is something magical in helping turn the juice of lowly grapes into a beverage that is like none other on earth. And having survived a mountain of troubles, veteran vintners can look upon something like PD as just one more hazard of the business. "What the hell," says Jack Cakebread of Napa's prizewinning Cakebread Cellars. "Agriculture has always been that way. But it's a bummer. I just planted 350 prune trees that host the wasps that prey on the sharpshooter." He pauses to sip from a glass of his 1991 reserve Chardonnay and laughs. "Now if I can just figure out how to make prune wine." </body> </article> </text>