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North Coast Wildfire Impact Study Signals Strong Recovery in Early Findings

January 26, 2018 10:56 AM

Labor and Employment Data Remain Stable, Executive Survey Shows Limited Effects on Wine Industry

Rohnert Park, California - The Wine Business Institute (WBI) at Sonoma State University (SSU) today released preliminary findings of its wildfire impact study of the North Coast wine industry, based on a survey of more than 200 vineyard and winery stakeholders across Lake, Mendocino, Napa, Solano, and Sonoma Counties, in addition to early analysis of available economic data. The study launched in October following inaccurate accounts of the extent of damage to the region's wineries and vineyards from wildfires in the north San Francisco Bay Area.  
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While the wildfires were unprecedented in Northern California, findings indicate that the actual impact on the North Coast wine industry was localized and limited. Labor and employment data across sectors shows a statistically insignificant decrease in the months of October and November consistent with historical averages. Indirect impacts of the wildfires were more widespread, including a short-term reduction in visitors to the region. 

"The most significant impact on the North Coast wine industry was an immediate and temporary slow-down of visitors to the region. We believe this was driven by images and reports at the height of the disaster. Fortunately, the numbers show that this trend has corrected and continues to improve. We also have early indications from the broader economy that our regional recovery will be strong. Going forward, our team of economists, industry executives, and scientists will apply these findings in a coordinated plan to ensure confidence among consumer, media, and trade organizations in the quality standards for the 2017 vintage," Honore Comfort, Wine Business Executive in Residence at Sonoma State University said.     

Key findings to date: 

  • 99.8% of vineyard acres (138,937 of 139,204) in the North Coast region are reported as unaffected by recent fires.
  • 93% of wineries (950 of 1,025) are reported as unaffected by the fires in terms of structural damage or long-term impact.
  • 99.5% of the total crop value was recovered (based on calculations using 2016 crush report).
  • 90% of affected wineries and grape growers reported that vineyards would not need to be replanted or replaced, and of those that do, most would be less than 10 acres.
  • 71% of survey respondents reported an immediate drop in tasting room traffic compared to the same period last year, although this trend started to recover in November.
  • 62% of respondents reported a drop in tasting room sales compared to this period last year.
  • 50% of respondents reported that visitors from the San Francisco Bay Area increased or remained constant, while visitation from outside of California and the U.S. was most affected.
  • 75% of respondents noted online sales are equal to or higher than during this period last year.
 
In the affected areas, vineyards often served as firebreaks that prevented the spread of fire, which is considered a primary cause for the limited damage. The reduction in visitor traffic and tasting room sales is thought to be the result of inaccurate national news reports and subsequent public misperception that a large portion of the wine region was damaged or closed due to wildfires. Beginning in November, this trend reversed with visitor numbers returning to or exceeding prior year numbers for the same period. Other wine regions in the state reported a significant increase in visitor numbers during this period. 

Based on historical data following natural disasters of this scale relative to the size of the region, local economies recover with no negative long-term effects. Early indicators contributing to a positive outlook for broader economic recovery include timely insurance payouts, an expedited process and reduced government fees for building approvals, and property tax reassessments. An anticipated construction boom is expected to drive growth in employment and related sectors. Additionally, over $15 million in charitable contributions have been made through a local credit union and other channels in support of those directly impacted by the fires.  

Ray Johnson, Executive Director of the Wine Business Institute, and Honore Comfort, Wine Business Executive in Residence, will discuss early findings of the wildfire impact assessment study at a press conference on Wednesday, January 24 at 11 a.m. PST during the Unified Wine & Grape Symposium at the Sacramento Convention Center. In phase two of the study, the Wine Business Institute will convene an industry working group for additional quantitative and qualitative analysis, including representatives of the California Wine Institute, California Association of Winegrape Growers, faculty from the Department of Viticulture and Enology at the University of California, Davis, and grower and vintner organizations throughout the North Coast. 

For more information regarding the Wine Business Institute at Sonoma State University, please visit sonoma.edu/winebiz, contact (707) 664-3235 or email winebiz@sonoma.edu.   
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