Four years of drought in California has taken effect on U.S. wine industry, as the amount of harvested grape reduced significantly. The drought is recorded as one of the most severe in the history. Meanwhile, there is a shift in wine consumption in newer generation.
Fortunately, starting the second week of January, El Nino storms have hit Southern California, bringing rain and heavy snowfall in some areas. This has brought a hope of more rain to help vintners increasing their harvest to produce more wine.
Vintner Michael Mondavi in an interview with Tanya Rivero in Lunch Break on Wall Street Journal said, "We're actually going from famine to feast with the rainfall. We had for years of drought, the water tables are dropping."
This week, thousand of California's vintners met at Sacramento Convention Center this week in the Unified Wine and Grape Symposium. As reported by CBS Sacramento, there are 14,000 of the top wine and grape industry professionals gathered, selling and checking out the latest and greatest technologies and equipment in the industry.
Ken Freeze from the organizer said the drought has reduced the amount of grapes harvested in California over the past four years. However it has not made a major dent in the $63 billion U.S. wine industry, and they are still optimistic about the future. "Fortunately it looks like we're going to have a good wet winter," he said regarding recent storms.
David Criveller, whose company is in business of selling large wine processing tanks to vintners said he experienced drop of sales in some areas as he said, "Lodi is a little slower I would say. Napa, Sonoma I would say pretty good." Furthermore he added "Everybody is optimistic now with this rain and we're hoping that brings in more tank sales so that we can build more."
In the wine consumption, there will be decline in U.S. consumption. The annual State of the Wine Industry 2016 report released by Silicon Valley Bank predicted the first time of decline in 20 years because of millennials demand.
According to Harpers, founder of Wine Division in the Silicon Valley Bank Rob McMillan said, "While demand for premium wine will increase this year, there are clouds on the horizon that should be considered. We believe total and per capita wine consumption in the U.S. will drop for the first time in more than 20 years due to emerging generational shifts in consumption patterns that we see accelerating in the near term."
Four years drought in California has begun to end with storms bring rain in the vineyards regions, increasing grape and wine production. However, a change of preference from the millennials in wine consumption may change the industry to produce more premium wine.
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