INDUSTRY TRENDS

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1.
Continuing strong consumer demand for premium wines driven by a healthy economy and ongoing publicity linking moderate wine consumption with cardiovascular health, anti-cancer protection and increased longevity.

2.
Higher wine prices driven by strong consumer demand, short harvests in 1995 and 1996, and lost production due to the widespread replanting of vineyards damaged by the vine pest phylloxera.

3.
California wineries bottling foreign wine, primarily from Chile and southern France, under their own labels to bolster inventories and maintain shelf space during the California grape shortage. These wineries claim consumers care only about brand and varietal, not appellation, yet several use labels disguising the foreign origin of their wines. Wineries opposed to foreign wine sourcing say it is disloyal to California grape growers, promotes foreign wines, and is shortsighted given an expected glut of California grapes by the end of the decade.

4.
The emergence of once little-known wine regions such as Chile, Argentina, South Africa, New Zealand, Australia and Eastern Europe as sources of high-quality, affordable wines, further crowding the market with new labels and intensifying competition for shelf space and customer attention.

5.
The increasing popularity of "softer" red wines such as Zinfandel, Pinot Noir and Syrah, due both to the red wine & health issue and their superior drinkability, affordability, and food-friendliness compared to Cabernet Sauvignon and Merlot.

6.
Growing consumer interest in Mediterranean grape types and so-called Cal-Ital wines, such as California Sangiovese and Barbera, which complement popular Italian and Mediterranean cuisines better than traditional French varieties.

7.
More blends of prominent varieties with lesser-known ones, such as Semillon-Chardonnay, and Cabernet-Shiraz. Originally from Australia, California winemakers now emulate these wines, as well as concocting many proprietarily named blends, such as Sutter Home's Soléo.

8.
Creative new premium wine packaging featuring new bottle shapes, pressure-sensitive labeling, art labels, clear capsules, decorated corks and the flamboyant use of color and graphics.

9.
The growth of non-traditional wine marketing, including direct mail, off-beat advertising, and, especially, the Internet. Close to 300 wineries now have web sites, many of them offering direct sales, customer forums, on-line tastings, and chats with the winemaker.

10.
Wine as big business, with more wineries, big and small, going public to raise capital and finance winery and vineyard expansion, coupled with a rise in inter-winery litigation over alleged trademark infringements.