%The California wine industry will continue to hold its own in the global marketplace despite shifts in consumer demographics, the ongoing drought, and competition from imported wines, craft beers and cocktails.
Those are the results of the 13th annual survey of wine executives and industry professionals conducted by the University of California, Davis.
They will be presented Sept. 23 during the Wine Industry Financial Symposium in Napa, according to a news release.
Smiley surveyed the heads of 26 wineries, of which about 60 percent were located in the Napa or Sonoma valleys. One is in Washington.
Although wine consumption by baby boomers continues to decline, millenials—those 21-30 years old—are picking up the slack and at a faster pace.
But millenials also have an adventurous side and like to try craft beers and mixed cocktails, too.
How to reach millennials, how to engage them and build brand loyalty with them is ... more complicated than with the boomers," Robert Smiley, professor and dean emeritus of the UC Davis Graduate School of Management, said in the release.
The industry also will face more competition from imports, most respondents agreed.
As a result, the industry should increase promotional efforts through local trade organizations and pay greater attention to wine quality and value.
Climate change and the associated drought also were among the industry's top issues.
Many wineries already are implementing strategies to reduce water use, including imaging technology to reduce vineyard water use and recyclinig winery water for use in the vineyard.
Smiley's survey of California wine professionals, now in its 23rd year, involved 122 wine industry leaders.
The rebounding economy should benefit the industry by boosting sales during the next three years, followed by direct sales to consumers, a larger consumer base and higher-end wine sales.
Most professionals agreed that they are placing greater emphasis on direct sales to consumers, raising wine prices and investing in technology.
Social media also is playing an increasing role in their business, with Facebook and Twitter the most valuable.
During the next three years, respondents said chardonnay will be the strongest white varietal, followed by sauvignon blanc and pinot grigio.
Cabernet sauvignon will lead red varietals, followed by pinot noir and red blends.
Wines in the $14- to $20-per-bottle range will show the strongest sales, they said.