Chapter 1: What challenges is California's wine industry currently facing?
The sun is out, and it's warming John Valetto's vineyard in Sonoma County, California. Rows and rows of Pinot grapes glint on the vine. They're destined to be pressed, bottled, and uncorked at holiday parties, or sipped after a toast. What is your favorite wine?
Well, you know, I have three favorites. So if it's a warm day, it's our Rosé of Pinot Noirs. On a nice afternoon, if we're having a nice steak or something, a great bottle of our 18-barrel Pinot. And then if it's just a gentle afternoon, it would be our Teresa Chardonnay.
You're making me thirsty, John. It's making me want to grab a glass in the middle of my workday. Probably not a great idea. John is a second-generation Sonoma farmer. He planted his first wine grapes in 1995. Today, he bottles his own wine and also sells a lot of his grapes to other wineries.
Well, on a harvest day, you would find, you'd see a pretty amazing sight. We have multiple crews and they're picking and sorting the grapes and bringing them in so we can load them on the trucks, get them to the winery before it gets warm. Just a wonderful thing.
For years, John's wine business, like the California wine industry more broadly, was a success story. Americans couldn't get enough of the pinots, the Zinfandels, and the Chardonnays that Sonoma is known for.
It's just a very special place for us to live here, raise our children here, and also be able to grow wine grapes and make wine. And our philosophy is share wine with family and friends over a great meal and make new friends. That's what Sonoma County is.
But this year, Sonoma County, along with the rest of California's renowned wine region, is drowning in troubles, from political pressure to cultural trends to the weather. For John, it has meant the worst year he's had in a quarter century, with many of his grapes going unsold. He stands to lose millions.
As we headed into 2025, we had about 25% of our grapes that were not contracted. And that was the first time in 25 years that that happened.
Oh, wow.
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Chapter 2: How have consumer trends impacted wine demand?
It's being held in, like, wherever, and it's not being sold. So that source of income, if you had put your eggs in that basket, is completely not an option now.
U.S. wine exports to Canada dropped 96% in the second quarter of this year, which really hurt farmers. Farmers like John Belletto, who we heard from earlier.
It's hard. It's hard. But we've got to make decisions and sometimes hard decisions. But we're going to be a survivor. It's a lot of sleepless nights right now just trying to figure out things of what we're going to do.
After the break, the drastic measures farmers are taking to save themselves. John Baletto was feeling desperate. In a cruel twist, Sonoma had just experienced a stretch of incredible weather, giving growers like him a glut of perfect grapes this harvest season. In another year, this would have been great. But major customers had stopped renewing contracts he'd relied on for decades.
Fewer people were drinking. So instead of a banner year, John couldn't sell enough to other wineries. He says he could lose more than $3 million in sales compared to last year.
A lot of things went through our mind because we couldn't really believe that these big wineries that we've been doing business with for 25 years are now not re-signing the grapes. These are big wineries that control maybe 10% of the wine that goes on restaurant tables and things like that.
And it's not like John can just hold onto the extra wine and store it away. Many of Sonoma's varietals are made to be enjoyed young, not aged for a long time. And storage is expensive. This year, it hasn't made economic sense to spend money on processing his grapes, so John made a choice that goes against every instinct he has as a farmer, letting the fruit die on the vine.
You grow grapes all year, you beautiful crop on this vine, it's just gorgeous. And then to see them not being harvested, it's just very upsetting. But as an economic thing, you can't bring them all in because then you have to spend more money to process them.
But just this type of loss that you're talking about, over 3 million, what would that mean for your business?
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