Wineries in Napa and Sonoma counties as well as in other key grape-growing regions in California and in Oregon are not just contending with dead trees and hillside vineyards at risk of erosion. They also may need to contend with not producing a 2020 vintage at all or one that is significantly smaller than normal and may not include any red wines.
The 2020 Glass fire claimed 31 wineries and the 2017 fires destroyed over 6 wineries that are still trying to recover. The Napa Valley Vintners, Napa Valley Grapegrowers and Winegrowers of Napa County estimated that just the 2020 Glass Fire will result in $1 billion in losses to wineries and $50 million in lost wages.
The region’s state senator, Bill Dodd, in a virtual conference organized by the North Bay Business Journal in early November said, “We’ve got a lot of issues we need to deal with, but my biggest concern is what are these insurance companies going to do in these high-risk areas,” Dodd said.
Earlier this month, the state of California issued a moratorium on insurance companies not renewing or canceling resident property insurance policies in ZIP codes within or near fire zones. According to Wines Vines Analytics’ databases, there are nearly 4,500 wineries and winegrape growers in areas affected by just the LNU Complex, Glass and six other fires from 2020 near wine regions.
The abundance of the 2018 crop may help recover from losses taken from 2020. Many wineries are likely to hold inventory from previous vintages or even release 2021 wines early to offset the losses from 2020. A lost vintage upends income projections, particularly if wines from older or yet-to-be harvested vintages have to be shifted into sales during other years.
Lab analysis revealed off-the-charts levels of smoke compounds in the grapes, which persuaded many to make the call and forgo a 2020 vintage. Lost-business and crop insurance will help cover immediate losses, many likely will draw on cash reserves to move forward.
Source: Wine Analytics Report, https://wineanalyticsreport.com
