The Wine Business Institute at Sonoma State University in California has released preliminary findings of its wildfire impact study of the north coast wine industry, which is based on a survey of more than 200 vineyard and winery stakeholders across Lake, Mendocino, Napa, Solano and Sonoma counties in California, in addition to early analysis of available economic data.
The study was launched in October following inaccurate accounts of the extent of damage to the region's wineries and vineyards from wildfires in the north San Francisco Bay Area of the state.
While the wildfires were unprecedented in northern California, findings indicated that the actual impact on the north coast wine industry was localized and limited. Labor and employment data across sectors showed a statistically insignificant decrease in October and November consistent with historical averages. Indirect impacts of the wildfires were more widespread, including a short-term reduction in visitors to the region.
“The most significant impact on the north coast wine industry was an immediate and temporary slowdown of visitors to the region. We believe this was driven by images and reports at the height of the disaster,” said Honore Comfort, wine business executive in residence. “Fortunately, the numbers show that this trend has corrected and continues to improve. We also have early indications from the broader economy that our regional recovery will be strong.”
Going forward, Comfort said a team of economists, industry executives and scientists will apply these findings in a coordinated plan to ensure confidence among consumer, media and trade organizations in the quality standards for the 2017 vintage.
Key findings to date include:
- 99.8% of vineyard acres (138,937 of the total 139,204 acres) in the north coast region were reported to be unaffected by recent fires.
- 93% of wineries (950 of 1,025) were reported to be unaffected by the fires in terms of structural damage or long-term impact.
- 99.5% of the total crop value was recovered (calculations based on 2016 crush report).
- 90% of affected wineries and grape growers reported that vineyards would not need to be replanted or replaced, and most of those that do would be fewer than 10 acres.
- 71% of survey respondents reported an immediate drop in tasting room traffic compared to the same period last year, although this trend started to recover in November.
- 62% of respondents reported a drop in tasting room sales compared to this period last year.
- 50% of respondents reported that visitors from the San Francisco Bay Area increased or remained constant, while visitation from outside California and the U.S. was most affected.
- 75% of respondents noted that online sales were equal to or higher than this period last year.
In the affected areas, vineyards often served as firebreaks that prevented the spread of fire, which is considered a primary reason for the limited damage.
“The reduction in visitor traffic and tasting room sales is thought to be the result of inaccurate national news reports and subsequent public misperception that a large portion of the wine region was damaged or closed due to wildfires,” the report noted. “Beginning in November, this trend reversed, with visitor numbers returning to or exceeding prior-year numbers for the same period. Other wine regions in the state reported a significant increase in visitor numbers during this period.”
Based on historical data following natural disasters of this scale relative to the size of the region, local economies often recover with no negative long-term effects. Early indicators contributing to a positive outlook for broader economic recovery include timely insurance payouts, an expedited process and reduced government fees for building approvals and property tax reassessments.
An anticipated construction boom is expected to drive growth in employment and related sectors. Additionally, more than $15 million in charitable contributions have been made through a local credit union and other channels in support of those directly affected by the fires.
A second phase of the study is planned wherein the Wine Business Institute will convene an industry working group for additional quantitative and qualitative analyses. This group will include representatives of the California Wine Institute and the California Association of Winegrape Growers, faculty from the University of California-Davis department of viticulture and enology and grower and vintner organizations throughout the north coast.