As the recently harvested grapes from Western Colorado roll into the state’s 65 wineries, they highlight a story of both opportunity and uncertainty.
The opportunity is in the industry’s positive economic impact and the uncertainty comes from competition and climate.
Although Colorado’s wine production is tiny — particularly compared to the giant California industry— it generates jobs, revenues and tourist visits, especially on the Western Slope. In a 2006 study, Colorado State University estimated the value of grape production at $3,072 per acre while that of irrigated corn at only $400 an acre. Adding in the value of wine production, the direct revenues per acre of wine grapes mount to $14,000.
Despite our small vineyard acreage and often-difficult climate, this industry is increasingly important to our state.
Coloradans consume more table wines than residents of other states, drinking 20 percent more wine than the average U.S. wine lover, according to Vine Lifestyle at Altitude. Our consumption is 87 percent domestic wine, compared to the American average of 75 percent. That should bode well for sales of Colorado wines, if only we produced more.
Even more crucial, said Bart Taylor, editor of Vine Lifestyle at Altitude, is improving the quality of Colorado wines to broaden their appeal to distributors and restaurants as well as consumers.
While Colorado wineries produced almost 50 percent more wine in 2006 than in 2002, that was still only a market share of 1.5 percent, with virtually all sales in-state. Contrasting that to California’s nearly 90 percent U.S. market share shows what a tiny player we are.
Meanwhile, worldwide, competition looms ever larger as more countries enter an already crowded global market. CSU’s study showed that the U.S. share of world wine production was 9 percent compared to emerging competitors Argentina, at 6 percent, and Australia at 4 percent. Both these countries make excellent wines at very competitive prices. France, on the other hand, is converting its nearly billion bottle a year glut into ethanol.
On a recent business trip to Argentina, I visited Mendoza, the lovely but barren heartland of the Argentine wine industry, pressed against the majestic Andes. Five years ago, there was only a handful of wineries in the region. Today, there are more than 100. These are high-tech operations, owned and run by families with experience in European, American and South American winemaking.
This competition is just the first factor of concern to any winemaker in Colorado — or California, for that matter. Not only is the quality of imported wine excellent, but the lower cost of production and the dismal value of the dollar against other currencies make the prices very appealing.
Second is climate, though this is an uncertainty worldwide. In Colorado, as in Argentina, runoff from snow is essential to irrigation. Without the Colorado River, the Western Slope could not sustain its strong agricultural economy. In Argentina, the Mendoza River was bone dry in September, awaiting the melting of an all too meager snowpack. Like Colorado, Argentina’s agricultural producers depend on layers of water rights, coming from snow, to irrigate their crops.
Last winter, my family’s California cattle ranch and vineyard received only 2 inches of rain compared to the usual 14 inches. But it began to rain during this harvest season, untimely and unwanted moisture that can ruin grapes. A recent report by the National Academy of Sciences indicated that such weather uncertainty could be an increasing problem for grape-growers, potentially reducing areas suitable for growing premium wine grapes by 50 percent to 80 percent over the next century.
If wine is your pleasure, competition is ideal. If it’s your livelihood, it could put you out of business or strengthen your quality initiatives. But uncertain weather could spoil your fun and your livelihood. For Coloradans, winemakers and wine drinkers alike, this is something to worry about.
