Lakeport, Calif.—Lake County wine grape growers and winemakers have steadily increased the quality and reputation of their appellation’s Sauvignon Blanc. Current market research shows that prices and demand should remain strong for Lake County grapes for at least the near-term future—not only for Sauvignon Blanc, but also for Cabernet Sauvignon, the area’s leading red variety.

The Lake County Winegrape Commission (LCWC) presented “Momentum 2015” on April 13 to highlight market trends for Lake County grapes and promote awareness of the Lake County appellation. The event also served to encourage growers to continue improving practices that enhance grape quality.

The LCWC represents about 170 growers with more than 8,700 acres planted to about 20 different grape varieties. Of Lake County’s total 2014 wine grape production of 38,673 tons, Sauvignon Blanc planted on 1,893 acres accounted for 11,967 tons (nearly 31% of the total), and Cabernet Sauvignon planted on 3,435 acres produced 14,025 tons (more than 36% of the region’s total harvest).

Christian Miller, proprietor of Full Glass Research and co-founder and research director of Wine Opinions, presented results from his recent market study for Lake County commissioned by the LCWC. “Generally speaking, Sauvignon Blanc and Cabernet Sauvignon are the leading Lake County varietals—not only in quantity production, but also in quality perception,” Miller summarized.

Miller gathered data from multiple sources including the National Agricultural Statistics Service (NASS) annual reports, surveys and interviews of Lake County grape buyers and users, and from wine sales market sources such as Nielsen, to provide the LCWC with current trends and provide direction about future opportunities. Miller said survey responses indicate very positive changes during the past five years in how Lake County grapes are perceived. This is attributed to improvements in grape quality and viticultural practices. In addition, Lake County has developed a distinct style of Sauvignon Blanc.  

Lake County now has more than 30 wineries producing Lake County-labeled wines, but these represent a small percentage of county grape production. (The county is home to 43 total wineries, according to Wines Vines Analytics.) Wineries outside the county buy and use the majority of grapes, and some bottled wines, most commonly Sauvignon Blanc, with a Lake County appellation.  North Coast wineries buy a significant amount of Lake County grapes to blend into Napa or Sonoma labeled wines to reduce average bottle costs, meet production goals or to reduce costs of blends of North Coast or California varietal wines while maintaining quality.

Citing price statistics and trends since 2005, Miller said the average price paid for Sauvignon Blanc went from $851 per ton in 2005 to $1,085 in 2014, with prices increasing every year since 2011. For Cabernet Sauvignon, the average price increased from $1,524 per ton in 2005 to $2,009 per ton in 2014.

Although 2014 prices for Sauvignon Blanc ranged from $400 to $1,600 per ton, 85% of 2014 tonnage sold for between $1,000 and $1,500 per ton. Cabernet Sauvignon prices in 2014 ranged from $1,200 to $2,800 per ton, but 38% sold for between $2,000 and $2,500 per ton, and 49% sold for $1,500-$2,000/ton. 

“The big story for Lake County has been the near elimination of low-end grape prices,” Miller observed, which also supports the market perception that grape quality is increasing. This is also good news in terms of general wine market trends, as price segments above $10 per bottle are where sales growth is occurring.

Another positive sign for Sauvignon Blanc is that its overall market share is increasing. “Its penetration is creeping up on Chardonnay in terms of frequency of purchase by consumers,” Miller said. The fact that planted acreage of Sauvignon Blanc in California has remained flat in recent years, and actually decreased based on the 2014 NASS Grape Acreage Report, should help maintain or increase prices wineries are willing to pay for the grape in the near-term.

LCWC chairman offers vision for future
Delivering a “State of the Lake County Wine Industry” summary, Peter Molnar, LCWC chairman since 2009, and general manager of Obsidian Ridge Vineyard in Lake County’s Red Hills American Viticultural Area (AVA), said of Miller’s report, “This is probably the most comprehensive Lake County data we’ve ever had, and it helps lay out where we want to go for the future.”

Molnar noted that historically, Lake County Sauvignon Blanc’s role has been to fill $10 per bottle North Coast and California blends of the varietal. Looking to the future, he said, “I think there’s a strong argument to say that within the next 10 years we could surpass other North Coast county Sauvignon Blancs in quality and reputation,” Molnar said.

Molnar offered four points for growers to keep in mind moving forward:

Grow for quality. “The numbers show we’re getting recognized,” he said.

Build brands. “Help attract new brands up here, and help build their story on the local vineyard or grower history,” he advised.

Continue doing our homework. Growers need to continue to gain knowledge to understand climate and terroir to manage for quality and style—and to better tell the region’s story.

Continue to stick together. “We’re a small region of less than 9,000 vineyard acres, but we’ve come a long way,” Molnar said. He cited the work of a small, but dedicated and effective, LCWC staff led by president Debra Sommerfield, and the foundation built by her predecessor, Shannon Gunier.

Grower panel cites trends, programs to enhance quality and perception
During a panel discussion of local growers, Cameron Lyeth, sales manager for Beckstoffer Vineyards, which has more than 1,300 planted acres in Lake County’s Red Hills AVA, echoed that Lake County’s reputation continues to grow. He said more buyers are calling him for Lake County fruit. “Now they’re coming up here and looking for a good grape supply and supplier,” he said. “Now that we’re getting new people who are interested in starting new brands, we want to show them that we want to grow with their brand and have a long-term relationship,” he added.

Although Napa still leads California counties in planted acreage for Sauvignon Blanc, (about 2,700 acres compared to 1,893 in Lake County) Lyeth believes this could change in the future to increase demand and price for Lake County Sauvignon Blanc. “If growers in Napa can get $6,000 per ton for Cabernet Sauvignon, why would they continue to plant Sauvignon Blanc?” Lyeth asked.

The LCWC has long promoted the region’s climate and terroir. Its higher elevation vineyards ranging from 1,350 to 2,700 feet in altitude receive higher levels of ultra-violet (UV) radiation. A dry and shorter growing season reduces pest and disease pressure. Lake County is known for its clean air, and the growing season commonly sees wide diurnal temperature swings of 50° F. within a 24-hour period. These factors contribute to consistent and high grape quality and distinctive wine styles.

Lake County’s climate and terroir also favor sustainable vineyard management. Keith Brandt, director of compliance for Shannon Ranches, helped obtain certification through the California Sustainable Winegrowing Alliance for 745 acres of Shannon’s Lake County vineyards in 2013. “I encourage everyone to look into sustainable certification,” Brandt said. “For us it was not a big stretch to become certified, and there’s a good chance that 75% or more of your practices already fit into the program,” he observed. Providing another reason, Brandt said, “The market is going there, and people are looking for traceability in their products, at both the retailer and consumer level.”

David Weiss of Bella Vista Farming Co. noted that some grape buyers, such as Kendall-Jackson, pay higher prices per ton for grapes from sustainably certified acreage. “That fact, along with general increases in prices and quality perception, provide good reasons (and economic feasibility) to pursue sustainable certification,” Weiss said. Weiss believes most growers are already doing a good job managing for quality, but he feels sustainable management could contribute to quality improvement.

Another LCWC initiative contributing to quality management and perception is the Master Vigneron Academy begun in 2012, initiated by board member Randy Krag of Beckstoffer Vineyards. Managed by LCWC educational director Paul Zellman, the yearlong program includes field and classroom training on implementing quality winegrowing practices with sessions presented in Spanish. To date, nearly 40 vineyard employees have completed the program, with most now working as field supervisors in Lake County vineyards.