Virginia winemakers question ‘global wine shortage’ but acknowledge challenges

November 13, 2013

Last month, a report released by Morgan Stanley presented a dire scenario for the wine industry and its customers: With international consumption rising and production falling, the world was facing a global wine shortage.

The report’s conclusion sparked a debate among worldwide wine industry experts, many of whom fervently disputed the grim forecast.

In Virginia’s wine country, winemakers say some of the key issues outlined in the report — such as the effect of bad weather on grape harvests and production rates that struggle to keep pace with rising demand — ring true.

In the Oct. 22 report, Morgan Stanley’s analysts said that worldwide wine production fell to a 40-year low last year and was about 300 million cases short of meeting international demand.

Loudoun County winemaker Doug Fabbioli, owner of Fabbioli Cellars in Leesburg, said he isn’t certain that the report’s picture of a looming crisis is accurate. As for the trickle-down effects of a decreased global wine supply on the Virginia wine industry, he said he was sure of one thing: “It certainly isn’t helping.”

The foreign countries at the heart of the debate are far from the rolling hills of Virginia’s wine country. But as damaged crops and rising consumption become factors in the global industry, Virginia winemakers also feel the squeeze, Fabbioli said.

“We already have a shortage in Virginia, because people are excited about Virginia wines,” he said. “We don’t have enough grapes in the ground already, so we have to reach out further to buy grapes, because we can’t always get enough locally. And as that market continues to experience more pressure, the harder it gets.”

Loudoun, which has branded itself as “D.C.’s Wine Country,” has more wineries than any other county in the state, a number that county officials expect to rise to more than 40 in the coming months. Because many of Loudoun’s wineries are in scenic areas, the vineyards also play a critical role in the county’s tourism industry, accounting for most of about $5 million in annual beverage manufacturing sales, officials said.

“More people want our product, and we’re going to have to do things to get more grapes in the ground,” Fabbioli said. “On a global scale, we are a really small piece of the industry — but if the overall ocean is moving, you know, we’re going to move, too.”

Steve Mackey, president of the Loudoun Wineries Association and owner of Notaviva Vineyards near Purcellville, said that he doesn’t think the world is facing a wine crisis but that the report does highlight legitimate concerns that are true of both the global and local industries.

“I think the report is valid in the sense that this is not a problem that you solve overnight,” Mackey said. “There’s such a long lead time between identifying the problem and then bringing the raw materials to market, and then another long lead time of wine production.”

Many new wineries — in Virginia and across the United States — open their doors “woefully unprepared” to meet the level of demand they will face, he said. And because it can take five or six years to cultivate fruit-bearing vines, there is no quick fix for the problem.

“What nobody wants to do is start creating less quality wine to keep up with production, so that’s the balancing act,” he said.

Mackey and Fabbioli both said local winemakers had their share of adversity and bad weather this year. A late-season frost in May ravaged grapevines at numerous local vineyards. Fabbioli reported that nearly 50 percent of his vines showed evidence of frost burn after temperatures plunged below freezing.

“We were already short on crops before we had our frost incident, and before all this was reported in Europe,” Fabbioli said. “That created something of a double-shortage, and now there’s more people who aren’t able to get the wines they’d like.”

The bottom line “is that more people want good wine, and this year we just have less wine to feed them,” he said.

Fabbioli said he hopes wine prices won’t rise too much as a result of the increased demand.

“We are already known in Virginia for wines that are a little bit higher in price,” he said. “We’re craftsmen, and we have smaller operations, and we have brand-new infrastructure that we’re still trying to pay down. We don’t want prices to go higher than they already are.”

Still, he said, “my prices aren’t going to go down, I guarantee that.”

Mackey said winemakers will simply have to adapt — and plant more vines.

“Wineries are growing faster than vineyards are being planted, and that can’t continue,” he said.

But the outlook “is not dire,” Mackey said. “People like to jump on this bandwagon of it being the end of the world, but there’s no way that I think that’s accurate.”

Caitlin Gibson covers Loudoun County for The Washington Post.
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