On the surface, the wine industry is strong in the U.S., and its future looks bright. Wine consumption has steadily increased every year since 2000, with last year’s overall sales approaching $60 billion, and experts predict it will rise by six percent this year. Who is buying all this wine? According to a 2016 report by the Wine Market Council, millennials and baby boomers, with millennials consuming 42 percent of all wine in 2015. This is great news for wine producers since this new generation (numbered at 83.1 million) is the largest on record with a buying power growing stronger by the day. So, with strong sales and a growing, enthusiastic customer base, what could be worrying this multibillion-dollar industry? Cannabis, of course.
North Americans spent an estimated $53.3 billion on both legal and illegal cannabis in 2016, and the rise of recreational legalization has some wine producers worried that consumers will switch from the wine glass to the glass bowl.
Data regarding this topic is limited, and the research is sometimes complicated and contradictory. Last year, for example, the investment analyst firm Cowen and Company presented a report suggesting beer sales in the states of Colorado, Washington and Oregon have been hurt by legalized cannabis. Others contest this analysis, citing that on-premise consumption of craft beer was not included in the study, which accounts for a high volume of sales. Another report looking at 2014 data found that wine sales in Colorado increased after the legalization of recreational cannabis, but they decreased in Washington.
Inconclusive reports aside, wine producers in California are paying attention to the emerging recreational market. While some winemakers are worried about a decrease in sales, others are not. Rob McMillan, author of Silicon Valley Bank’s annual State of the Wine Industry report, simplified the issue, commenting, “People don’t drink wine to get high, they smoke marijuana to get high. I don’t think it will hurt demand.”
The real issue at hand for California wine is labor, or rather, the lack thereof.
The Labor Problem
California is the nation’s top winemaking state, responsible for 90 percent of all U.S. wine production, with this year’s harvest expected to reach nearly four million tons crushed. If California were a nation to itself, it would be the fourth-leading wine producing country in the world, just behind the European vintner giants of France, Italy and Spain.
Harvest season for wine grapes begins in late summer and lasts until all the grapes have been picked and crushed, usually around November. Wine grapes are picked when their Brix, or sugar level, has reached the perfect point of ripeness (according to the winemaker’s discretion). Harvesting wine grapes is labor intensive and time sensitive—they must be picked and crushed quickly lest the heat and sun of late summer increase their Brix, possibly ruining the plan for that particular varietal.
Wineries, like the majority of agriculture in California, rely on both migratory and residential workers from Mexico for labor. Traditionally, during harvest season, vineyards will hire temporary or seasonal employees to take care of this labor glut, but for several years now, the California wine industry has faced challenges in employing enough skilled laborers during this crucial time frame. According to the State of the Wine Industry referenced above, this is due to a few problems: increasing difficulty in finding sufficiently trained and motivated labor for hand harvest, increasing labor costs as a result of legislation, increasing age of the labor force, and political uncertainty concerning immigration (see: Trump) and the future supply of qualified labor.
There exists one more reason why the wine industry is having labor difficulties. Again, we look to cannabis. California is not only the country’s top wine producing state, it’s also the top producer of cannabis. Both cannabis plants and vineyards do well in hot, dry climates as are found all over California. Harvest season for both crops happen at the same time, so farm workers have the choice of working in the vineyard or trimming cannabis flowers.
This is most clearly observed in Mendocino County, a region which houses around 570 vineyards and an unknown number of cannabis farms. The proliferation of cannabis cultivation is why this region (together with Humboldt and Trinity Counties) has been dubbed the “Emerald Triangle.” Martha Barra, owner of Redwood Valley Vineyards, commented about her experience: “When we need help in the vineyard around harvest time, we put out signs that we're looking for pickers. People will usually stop by and apply for the job, but this year none did. I was down at the grocery store around harvest time, and saw four young people holding up a sign saying that they were looking for work. I told them to jump in the back of my pickup and I'd give them work. 'What's the job?' they said, and when I told them picking grapes, they said that wasn't the kind of job they were looking for.”
Another winemaker commented, “Much of this [labor] shortage, especially during harvest, is caused by the competition from marijuana growers who hire laborers to sit on a white bucket and 'trim buds' for $25 to $30 an hour vs. working in the hot sun in the vineyard, where the average wage is around [$12-$20] an hour.”
Yes, trimming cannabis is easier than harvesting grapes, it pays better, and more often than not, the pay is in cash. Trim work comes with its own problems, such as repetitive, monotonous motions, long hours, and limited-to-no legality in the workplace, but piecemeal rates of $200 per trimmed pound can make these problems fade out of focus for many people in need of work.
While this issue may seem unique to the Emerald Triangle, the passage of Proposition 64 in California is expected to see the growth of cannabis farms across the state, which is bound to affect its many wine-producing regions. Most likely, wine producers won’t have to worry about the future of their wine sales, and instead, will direct their efforts to solving their labor problem. Rob McMillan concludes his State of the Wine Industry with this thought: “Market conditions don’t stay the same, so don’t be lulled by the easy response ‘because that’s the way we’ve always done it.’ The fact that this business resists change only means that there is that much more opportunity to find new and creative solutions.”