(UCDavis) - California wine will hold its own in the global market despite shifts in consumer demographics, scarce water, and competition from imported wines, craft beers and cocktails, according to wine industry leaders surveyed by the University of California, Davis.

Findings from the tandem surveys of wine executives and industry professionals will be presented at 8:30 a.m. Tuesday, Sept. 23, during the Wine Industry Financial Symposium at the Napa Valley Marriott in Napa, California.

“Wine industry leaders are keenly aware that this is a time of great change for California wineries and related business,” said Robert Smiley, professor and dean emeritus of the UC Davis Graduate School of Management.

“As the baby boomers ‘pass the glass’ to the millennial generation, there will be trade-offs in consumption, but the industry professionals surveyed indicate that they are prepared to meet these and other challenges by adjusting their brand composition, adapting new technologies and becoming more efficient in their use of water,” he said.
Survey of wine executives

Smiley gathered the opinions and projections from the heads of 26 wineries for this 13th annual wine executives survey. About 60 percent of those wineries are located in the Napa or Sonoma valleys, while most of the others are in the Central Coast and North Coast regions, and in California’s northern interior, Central Valley and Sierra foothills. One winery is in Washington.

Wine consumption by baby boomers is declining and will continue to do so as that group ages, but consumption by the millennial generation is expected to steadily increase, the wine executives reported.

“We find that the millennials are fabulous,” said one respondent. “They’re adopting wine at a faster pace, and they’re a different type of consumer than we’ve seen in the past.  How to reach millennials, how to engage them and build brand loyalty with them is … more complicated than with the boomers.”

Millennials are bringing a new interest in craft beer and cocktails, survey participants said. Many respondents suggested that the wine industry must pay close attention to those two competitive trends in the beverage business but seemed confident that the wine industry would eventually benefit from them.

“I’m thinking craft beer actually expands the market for us and offers an opportunity for millennial exploration and entry into the market, which then will progress up to wine,” said one wine executive.