Milestones in California Wine Fredrikson...Wine drinking is an "old world custom." • Favorite...

Milestones in California Wine1934-2009

(Part One)

Presented by:Jon Fredrikson

PresidentGomberg, Fredrikson & Associates

`|ÄxáàÉÇxá1934

• to open markets to California wine.• to reduce burdensome and punitive taxes.• to oppose prohibition.• to educate consumers and the trade.

Original Purposes of the Wine Institute, 1934

• Prohibition - wine legal in only 26 states.• Restricted outlets and other trade barriers.• Only about 11 million cases of wine (mostly

dessert wine) were sold.• Wine consumption was much higher as many

consumers legally made their own wine.

Wine Sales Obstacles in 1934

• A marketing order established the Wine Advisory Board in 1938. Wine Institute administered many functions under contract.

• The Wine Advisory Board's purpose was to promote the uses, joys, and benefits of California wine.

• Early advertising campaigns focused on wine as a mealtime beverage.

• This advertising helped convert the industry from dessert wines to table wines.

Wine Advisory Board Advertising & Promotion

Wine Advisory Board

U.S. Wine Consumption Per Capita

0.3

0.70.9 0.9

1.3

2.1 2.0 2.0

2.5

1934 1940 1950 1960 1970 1980 1990 2000 20080.0

0.5

1.0

1.5

2.0

2.5Gallons of Wine Per Capita

Dessert & OtherTable Wine

Sources: Wine Institute, GFA, Dept. of Census

Dessert Wines (Port, Sherry and Muscatel) Were the Largest

Selling Wines until 1967.

• "Wine is not regarded as a familiar part of American life." Wine drinking is an "old world custom."

• Favorite wines: Port, Sherry, Kosher, Sauterne, Burgundy, Muscatel.

• Wine is a special occasion beverage.• Most respondents agree that wine is healthful.• Wine rates high on prestige, but is not considered to be

an expensive drink.• Wine perceived as being for older people, and

particularly older women.

Roper Wine Attitude & Usage Study (1955)

Wine Advisory Board

Wine Institute’s Work on Opening Markets• Wine Institute began work on opening closed markets in 1934.

Hundreds of obstacles to orderly wine marketing were proposed and defeated.

• Prohibition remained in Kansas until 1948, in Oklahoma until 1959 and in Mississippi until 1966.

• Even in 1970 there were local prohibition laws in 32 states.• Many Prohibition moves defeated, including major attempts to

establish local prohibition by constitutional amendment in California in 1936, 1948, and 1954.

• Wine Institute’s work on opening markets continues today with direct-to-consumer shipping in many states.

Evolution of California Winery Advertising Over the Decades

`|ÄxáàÉÇxá“We, at Roma, have an idea that our forward march together is traceable to … free-enterprise competition…Because all have this freedom to fight … we, at Roma, take off our hats to the system…”

1952

`|ÄxáàÉÇxá

California Wine Grape Acreage 1968 to 1977

1968 1969 1970 1971 1972 1973 1974 1975 1976 19770

50

100

150

200

250

300

350Bearing AcresNon-Bearing Acres

Sources: Calif. Dept. of Food & Agriculture.

Planted Acreage Soared by 200,000 Acres Up 140%

1942

The Emergence of Varietal Wines

Frank Schoonmaker – Champion of Varietal Wines

•Was a respected writer, the author of the Complete Wine Book (1934) and Frank Schoonmaker's Encyclopedia of Wine (1964).•One of first importers of wines bottled by the grower/winemaker rather than by a negociant. Owned five retail stores in major markets.•Became the Champion of varietal wines. As a consultant to Almadenand other wineries, introduced the idea of labeling wines using varietal names rather than semi-generic names borrowed from European regions ("Burgundy", "Chablis", "Rhine", etc.).•In 1956, convinced Almaden to plant the largest single planting in history of varietal grapes in Paicines in San Benito County.

1942

The Emergence of Varietal Wines

“MR. PRODUCER: You have been selling most of the wine you make for somewhere between 20 and 30 cents a gallon.You will always sell some wine at such prices. But some of your wines are better than others, and you should get a premium for these superior wines. So we urge you to keep your superior varieties apart, to give special care to such wines, to age them and bottle them yourself, and to sell them for what they are worth. You will be able to do so when the public comes to understand the meaning of varietal names.”

GAMIT Brands of the 1970s

In the 1980s,“Fighting Varietals” Introduced American Consumers to Affordable California Varietal Wines

• For decades, wine has been going through a remarkable transformation.

• The increase in American consumer demand for wine coincides with the enormous breakthroughs in enological and viticultural technology, improving quality.

• The emergence of varietal wines provided consumers with an understandable “common language” for wine, boosting consumption.

• The victory of California wines in the 1976 Paris tasting brought world recognition to California wine.

• The quality bar rises every year - today California wines deliver more quality at all price points than ever before.

Wine’s Global Transformation

1912

1916

192 0

1924

1928

1932

1936

1 940

194 4

1948

1 952

1956

1960

1964

1968

1972

1976

1 980

198 4

1988

1 992

1996

2000

2 004

200 8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Sources: California Department of Food & Agriculture.

California Wine Grape Crush, 1912 to 2008

Demand for Quality Wine Has Driven Up the Crush

by Nearly Sixfold Since the Early 1970s

Millions of Tons Crushed

j|Çx \Çáà|àâàx `|ÄxáàÉÇxá Éy à{x ctáà JH lxtÜá1935 - Advocates legislation preserving sales at wineries, allowing for the development of winery retail sales and tourism.1949 - Adopts principles of good advertising practices, later published as Wine Institute Code of Advertising Standards.1982 - Starts Washington Week program bringing California vintners to the nation’s capitol.1984 - Congress passes the Wine Equity and Export Expansion Act to help reduce barriers to trade abroad for American wines.1985 - Wine Institute advocates for the passage of direct-to-consumer wine shipping legislation in California, the first in the U.S. 1995 - The U.S. Dietary Guidelines acknowledge for the first time that moderate wine and alcohol consumption can reduce the risk for heart disease for some individuals.2001 - Wine Institute and the California Association of Winegrape Growers introduce the California Code of Sustainable Winegrowing.2005 - The U.S. Supreme Court rules “that states cannot ban out-of-state wineries from shipping wine directly to consumers while allowing in-state wine producers to do so.”2007 - Wine Institute partners with the California Travel and Tourism Commission on national television to promote the state’s wine, food and travel offering.

U.S. Wine Consumption Per Capita

0.3

0.70.9 0.9

1.3

2.1 2.0 2.0

2.5

1934 1940 1950 1960 1970 1980 1990 2000 20080.0

0.5

1.0

1.5

2.0

2.5Gallons of Wine Per Capita

Dessert & OtherTable Wine

Sources: Wine Institute, GFA, Dept. of Census

The U.S. Wine Market, 1934 to 20082008 Industry Shipments Rose to 317 Million Cases

34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 080

50

100

150

200

250

300

Sources: Wine Institute, BATF, DOC. Includes bulk wines.

Millions of Cases Shipped

317 Million Cases

Wine Institute’s 75 Years of Work Helped Build the

U.S. into a 317 Million Case Wine Market in 2008

• Seventy-five years after the repeal of prohibition, the United States is on the threshold of becoming the world's largest wine market.

• Wine Institute played a major role in this achievement, opening markets, fighting taxes, opposing prohibition, and educating consumers about the healthful benefits of moderate wine consumption.

• The principles on which Wine Institute was founded have not changed and neither have the challenges that confront it today.

• Just as those who forget history are condemned to repeat it, those who remember history know full well just how much there is to celebrate on an occasion such as this.

A Time to Celebrate

Milestones in California Wine Fredrikson...Wine drinking is an "old world custom." • Favorite...

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