Issue link: http://winesandvines.uberflip.com/i/766392
January 2017 WINES&VINES 159 PRACTICAL WINERY & VINEYARD BUSINESS on DtC (direct-to-consumer) business and specifically winery tasting rooms. There will be an aggressive move to restrict and en- hance traffic flow, that will be a big issue." " We may see a DtC model that actually starts to work across the price ranges. It's going to take a while. We've talked about this before, the logistics of the supply chain of wine are tough and so heavy, and that's why most of your average price point is between $30 and $40 per bottle on DtC. But we're starting to buy our laundry deter- gent from Amazon. Somebody, or over time, is going to figure out how to have this DtC model work on wine in a way that makes sense—not only at $30 a bottle." " Wine brands continue to proliferate; whether it is existing large wineries adding new brands or brands popping up, we don't see a reduction in that yet. But consolidation of distributors will rationalize these brands and say, 'We don't need 10,000 brands.' They will start forcing the reduction in brands be- cause they won't be distributing." " On a national level there are too many wineries and too many brands. Either some will go away, which seems unlikely, or we are setting ourselves up for a very competitive price war situation. The water thing is clearly an issue over the next 10 years, but it is so regional. The guy in Kern County (southern end of the Central Valley) versus the guy in the (Sierra) Foot- hills, versus Mendocino County, versus Santa Barbara County, versus Napa Val- ley. The dynamics of the problem are quite different by region. The North Coast will weather long-term climate change and water issues better than almost any wine- growing region in the state." " Water and the economy. With the curren- cies and the uncertainty out there. There will be more volatility, and that is going to impact this industry tremendously. Cur- rencies. If the euro collapses, then wine is much cheaper to ship in here, and we can't ship over there, for example." " We are well overdue for another reces- sion. If you look at the whole international landscape and craziness and volatility in this world, that will eventually trickle down and cause us some problems in some way, shape or form. We just don't know what that is right now." " Imports. They aren't regulated. They are subsidized. Back in the 1970s they were 5%, then 10%, then 20%, now it is a third. There were more imported SKUs in America than American-made products. On the West Coast all you see is Califor- nia wine. Anywhere on the East Coast you only see imports." " Competition from imports continues to be a significant issue for California wines. Not just from overseas but competition from Oregon, Washington and overseas. The competition is coming from every- where. It is something we have all been aware of but no one has come up with any significant strategy to deal with it be- sides better brand marketing and better quality and the like." " We've got a huge labor issue. Certainly in California over the next five years, with the raising of the minimum wage, farming com- panies are going to have to be—especially in the premium wine areas of Napa and So- noma—a few dollars higher than the mini- mum wage to attract labor." " Labor prices and shortages will not be in- surmountable but will radically change