Californian drought continues
The four-year drought in California is having an impact on smaller producers of inexpensive wines. These producers are facing higher costs and lower yields and the demand for their wines is falling.
Shipments of below $7 wines reduced by 2-3 per cent, while higher end wines actually enjoyed double-digit growth according to California trade organization Allied Grape Growers. The trend amongst consumers is for wines at $10 and over, with less demand for cheaper wines.
The prolonged drought means some vineyards are being allocated as little as 20% of their usual water allotment from the State Water Project, making it difficult for vines to flourish. Even though grapes are drought-tolerant, they aren't invincible and extended periods of high stress can cause vines to stop producing fruit eventually and shut down.
While high-end producers in Napa Valley can accept lower grape yields in exchange for more concentrated flavours, sadly the same is not true for wineries at the lower end.