Predicting the Wine Industry of Tomorrow

Second general session of Unified Symposium focuses on future of sales and technology

by Andrew Adams and Kate Lavin
Unified Wine Grape Symposium
The technology Mike Holst discussed during the Industry of Tomorrow session today at the Unified Wine & Grape Symposium today was implemented at Washington State University (above).
Sacramento, Calif.—A panel of experts painted a picture of the “industry of tomorrow” during the general session Jan. 28 at the Unified Wine & Grape Symposium in Sacramento.

Winemakers and growers will be making more decisions based on data from complex sensor networks that will take the guesswork out of making wine. It is becoming clearer how the maturing millennial generation will buy and drink wine, but U.S. producers will have to stay aggressive in touting their wines in a market that’s growing more fragmented from spirits, craft beer and imported wines as well.

Marketing trends
Lulie Halstead is the CEO and founder of Wine Intelligence, which is based in London, England, but studies consumer opinions and buying habits of wine throughout the world. She described five “macro trends” that will have a significant impact on consumer behavior in the near future.

Transparency in product authenticity and quality is of primary importance to consumers in the United States and China. In China, Halstead said the top reason consumers aren’t buying wine is they’re not certain the product is real—or they can’t trust who is selling it. Considering wine sales in China dropped sharply in recent years, this presents a real problem for U.S. exporters.

Other trends include customizable options and products that appeal to a sense of “well being” or healthy living. Smaller product sizes are also trending, and Halstead said packaging individual servings of premium wine is a great opportunity. “You can have a really good glass of wine at home, but just that one glass if that’s all you want,” she said.

The combination of products or services from different sectors—what Halstead dubbed as fusion—is also a growing trend. She cited examples such as a Mercedes Benz restaurant in Hong Kong and frozen ciders mixed with other flavors.

Such trends may seem at odds with traditional wine marketing, but Halstead said they offer a route to capture the attention of consumers who like drinking wine but may not have the same passion as those who work in the industry. Wine’s competitors—spirits and beer—and many other consumer goods have taken advantage of those trends. “It’s what consumers are looking for because they’re getting it from other categories than ours,” she said.

Halstead said Wine Intelligence pegs the number of regular wine drinkers (those who drink wine at least once a month) at 93 million, or about 40% of the U.S. adult population. She said based on interviews with thousands of wine drinkers and data modeling, the number of regular drinkers should increase to 110 million, or 44% of the population by 2025.

Halstead also has an optimistic view of millennials, who she said spend more per bottle despite being open to other beverages and brand agnostic. “If you add it up, all the dollars the average millennial spends on wine, it would be twice that of a boomer.”

Internet of things in winemaking
On the production side, winemakers in the near future will enjoy a feast of data to make decisions with better information and prevent problems from happening. Mike Holst, senior director of operations at Cypress Semiconductor in Berkeley, Calif., discussed a multi-disciplinary approach to problem solving for winemaking equipment.

He said he didn’t know much about the wine industry until 2010, when his boss, Cypress CEO T.J. Rodgers, who also is the owner of Clos de la Tech winery in California’s Santa Cruz Mountains, called a meeting to discuss improving winemaking products.

Holst developed a device that uses differences in air pressure to record changes in must density, ultimately delivering an accurate and instant Brix measurement. Creating such a tool required countless prototypes and problem solving such as incorporating filtering algorithms to reduce the amount of “noise” from the device’s pumps. “In the future in the winemaking process, you’ll have simple low-cost Brix meters in your tanks,” he said.

He also helped to create a real-time sensor for phenolics that would use a LED colometer and a yeast cell-counting device that employs a capacitive flow sensor that he called “outrageously cool.”

Such equipment can and will be used in the vineyard to collect data about how every vine is performing. Eventually real-time sensor networks connected to the Internet will provide continuous data about every aspect of grapegrowing and wine production.

Holst said the American wine industry’s best protection against foreign competition is to innovate and use new products to lower production costs and improve quality.


Increasing adoption
Roger Boulton, enology professor at the University of California, Davis, said the U.S. wine industry’s slow adoption of technology is keeping domestic wine from reaching its full potential and, in some cases, stopping consumers from drinking wine altogether.

To prove his point, Boulton cited the industry’s slow adoption of cross-flow filtration. “We did the first cross-flow studies in 1976, the year I first came to Davis,” Boulton said, but it took until the year 2000 before the technology was being used in half of U.S. wineries. “One of the largest wineries in the industry adopted cross flow in 2005. I’m glad I didn’t ask (the owner) for research funds, because he probably doesn’t understand it even now.”

Boulton also chided the industry members for not going public with numbers related to their environmental footprints, saying that in other countries publicly held wineries are required to file this information in addition to quarterly financial reports, and Pernod Ricard, for example, has been including this information in their annual reports for a decade.

“It’s not just a measure, it’s the way you are,” he said. Boulton guessed that wineries are worried about sharing measurements of their environmental footprint because it will show that it is not improving over time. “If you don’t have a number, and you can’t show people it’s changing, you’re missing the point” of sustainability.

The speaker added that researchers have found alternatives to using bentonite, ways to conserve water and offered tracking features for bottles for years, but the industry’s slow adoption of this technology is still resulting in wasted water and fears about wine provenance.

Advocating for the consumer
Finally, the majority of the audience raised their hands when Boulton asked if anyone in the room had diabetes or had a close relative or friend with the disease. “Now keep your hand up if that friend or relative is able to enjoy a nice glass of wine,” he said, and nearly ever hand came down. Boulton said this truth reflects poorly the wineries that refuse to offer wine glucose levels on wine packaging.

“If you don’t give that information to a diabetic, they can’t have it,” Boulton said. “And rather than give that information, we actually hide it! Do you understand how silly we are?”

Additionally, he said, “Beer cans had almost complete adoption of the ‘best before date’ by 2015,” but no one in the wine industry is following suit. “In the wine industry, we want it to sit there, waiting for some sucker to buy it. I cannot understand why this is not an issue.”

Using sensors to improve quality
Finally, Terry Bates, senior research associate and director of the Cornell Lake Erie Research and Extension Laboratory, discussed his federally funded research project to improve vineyard management using remote sensors. (See “Grape Research Gets Big Grant.”) 

Using NDVI (normalized difference vegetation index) data obtained from tractor or harvester-mounted sensors as well as overhead cameras, Bates’ team is working to identify struggling areas of the vineyard and ways to increase performance.

So far the project has evaluated soil, canopy and crop; cameras have been deployed to count florets on Concord grapevines, while a cell attached to a mechanical harvester allows growers to measure tons per acre in specific blocks. Bates says this information will help growers make informed decisions about vineyard inputs for very specific locations.

The Unified Wine & Grape Symposium, which debuted in 1994, is organized by the American Society for Enology and Viticulture and the California Association of Winegrape Growers. According to Unified publicist Ken Freeze, the 2016 symposium featured 67 speakers and moderators, 664 trade show exhibitors and attendees from 32 countries.


Posted on 01.29.2016 - 11:31:51 PST
Fred Franzia said it all! No one has more insight in this industry! Ernest and Juilio Gallo lead the way with the Franzia Family. We would be nowhere without their vision and leadership! Bob Nicols

Posted on 01.30.2016 - 15:07:57 PST
I second that observation. Bronco and Gallo have the present as well as the future in mind in all of their decisions.