California's wine industry enters new era

Abstract

The wine industry in California and the world is entering a new era, marked by consolidation and globalization. People are drinking less but better wine. Will producers of lower-priced grapes raise quality to attract more upscale wine drinkers, putting downward pressure on all grape and wine prices, or will the wine-grape industry fragment into distinct quality and price segments? In 2001 and 2002, an increased grape supply and the recession led to declining prices for wine grapes in all areas of California except the North Coast. Predictions of a severe wine-grape glut obscure the possibility that a fragmented wine industry is developing in which some segments prosper while others languish.