Central Coast Insights is a popular wine industry conference most recently hosted on March 26th at the Paso Robles Event Center. All the top industry issues are covered from mergers and acquisitions to legislative and regulatory issues, water update, consumer brand positioning, and more! Now here are the key takeaways you need to know:
Outstanding Regional Growth
Opportunities abound! The Paso Robles wine region and California’s Central Coast at-large continue to be on the rise. WineBusiness MonthlyPresident Eric Jorgensen shared that there are 987 wineries on the Central Coast and counting. Pair that fact with our wildly unique AVAs and high-quality fruit priced well below Napa and Sonoma, it makes sense that an increasing number of companies are buying brands and forging companies here.
What Leaders Are Saying
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Aaron Fishleder, VP of Operations at Cakebread Cellars, describes the Central Coast wine vibe as “unabashedly itself” in the best way. He recognizes that the region is not looking at what Napa or anyone else is doing. Instead, everyone is themselves. People are increasingly attracted to the people and community that make Paso Robles extraordinary. Fishleder mentioned they have a rigorous growth plan for their Bezel brand, which includes a Paso Robles Cab and Sauv Blanc along with a SLO Coast Pinot and Edna Valley Wine test market response has been phenomenal and he expects the program to grow significantly over the next six years.
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In a recent issue of Wine Business Monthly, Shawn Schiffer of Foley Family Wines shared “As we look at opportunities, Paso Robles is top of mind for us without a doubt.”
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“President of Vineyard Professional Services, Randy Heinzen, discussed how he views the area from a vineyard perspective and highlighted the unique and creative spirit of Paso Robles. Not only does the region have an incredible diversity of soils, but it has the ability to make different wine styles from different cultivars, and it even has a wide variety when it comes to vine training and pruning. He said the ability to adapt and challenge the methods we have all been taught is encouraging here on the Central Coast; it allows grapegrowers to help express the land.” (Source: Wine Business)
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Heidi Scheid of Scheid Vineyards highlighted that the Central Coast can grow a number of varieties and offer them at different price points. She also emphasized that younger drinkers want a price-friendly intro to wine that’s delicious and delivers. When it comes to shipping, Scheid encourages an easy ordering process because consumers expect a speedy and streamlined process. Communication and setting clear expectations are key.
Source: Wine Business
Wine & Grape Supply
Beyond a long and late harvest, our 2023 Central Coast vintage is defined by unusual weather from intense February rains to snow on the ground in Paso and the consequent challenges of rot and mildew. Through it all, the 2023 vintage is exceptional.
Cabernet Sauvignon
The demand for Paso Robles Cab continues to be strong and the most recent harvest yielded a historic amount of Cab crushed in the region.
Chardonnay
Turrentine Brokerage’s Audra Cooper noted that the amount of Chardonnay could’ve been larger, but ultimately there’s more Chardonnay than what we need in the marketplace.
Pinot Noir
Pinot markets have been challenging recently with glimmers of optimism in 2021 and 2022. Conference speakers noted there’s been a call to remove acres of Pinot Noir over the years and there isn’t as much going into the ground. Jenny, can you offer a more positive twist here?
Sauvignon Blanc
Historically a bright spot in the market, demand for Sauv Blanc dropped off in the second half of the year.
Challenges
- Supply and Demand
- Pricing
- Inventory Carry Over
- JIT Sourcing
- Marketing Timing & Decision Making (due to the nature of the growing season)
Opportunities for Innovation
According to conference speakers, it’s time to step on the gas! Leaders emphasize that innovation is what gets us through tough times and breeds evolution. DAOU is a phenomenal example of this. Azur Associates Founder & Principal, Pat DeLong, said “They were not afraid to bet big.” while Broken Earth Winery General Manager & VP, Justin Tooley, complimented DAOU for doing a good job of sticking to their vision.
Feeling the Squeeze
Feeling the margin squeeze? You're not alone. Everything is expensive and staying adaptable will only serve you. Take a hard look at your expenses to identify where you're spending the most. In looking at businesses, “...interest expense comprised between 1-5% of total costs and labor was the highest expense category, as high as 40-50% of costs.” Knowing that—Bank of the Sierra SVP, Lee Ann Pearce, recommends being mindful around decisions to add permanent staff or invest in significant equipment that you could alternatively lease or borrow instead.
Meet Consumers Where They Are
Between the rise of non-alcohol products and increasing cannabis consumption, it's important to get strategic about what the next generation wants.
Brand Positioning for Gen Z:
Sustainability Focus
Gen Z cares about environmental responsibility in a big way. They want a behind-the-scenes look at your sustainability efforts—so leverage your green values and specific practices across your marketing efforts!
Highlight Signature Story
Identity is also deeply important to this consumer group. If you're a woman or minority-owned business, be sure to promote that fact directly on the bottle, your website, sales collateral, and more. The more unique your brand story, the more opportunity your business has to stand out.
Diversity
When it comes to influencers, are the people representing your wine brand aligned with Gen Z? From age to gender, background, and beyond—meaningful diversity matters to this consumer group.
Keep it Spicy
Gen Z is all about bold flavors and their purchase power reflects that. Bank of the Sierra SVP, Lee Ann Pearce, shared that 1 in 10 restaurants in the U.S. serves Mexican food, so think creatively about opportunities to get wine on the table at Mexican restaurants.
Looking Ahead
How is the market? Vineyard Professional Real Estate (VPRE) broke our “PR” (Personal Record) in the first quarter with 6 vineyard sales averaging $4 million each.
The spring listing pipeline is filling quickly and buyers are emerging. Well-priced lifestyle vineyard properties in the Paso Robles area are extremely popular.
The VPRE team expects continued momentum into summer and fall.
Paso Robles Vineyard Real Estate
California's #1 vineyard broker, Jenny Heinzen and the VPRE team serve wine industry clients, investment funds, and high-net-worth individuals. We are an independent luxury brokerage with in-depth understanding of the Paso Robles American Viticulture Area (AVA), long-standing relationships, and insider expertise. Together we’ve sold 10,000+ acres across more than 50 California vineyard transactions.
Now we'd love to be of service to you.
(805) 610-6741