California’s wine industry leaders see a growing emphasis on premium wines over economy wines, according to the results of two surveys conducted by the University of California Davis Graduate School of Management.
Respondents said the industry still faces challenges in consolidating distribution and retail, as well as water availability and other environmental issues.
According to Robert Smiley, the school’s director of wine studies, consumers are trading up for premium wines as they become more knowledgeable about wine. “Premiumization” among wine consumers was defined as spending above the $10-per-bottle price point.
Other challenges facing the industry relate to the increasing cost of land and grapes, partly due to an influx of outside investors.