(Wines&Vines) - As usual, this year’s Vineyard Economics Seminar provided an almost overwhelming amount of information for growers, wineries and lenders to consider.

Two themes touched almost all the sessions at the seminar held May 15 at the Napa Valley Marriott: the large inventory of wine from the last three bountiful harvests (no one is calling it a glut) and the drought, now in its fourth year.

With most observers expecting at least an average harvest this fall, growers are looking at options with their winery customers generally holding plentiful stocks.

And though the drought is on everyone’s mind, almost all agree that it hasn’t had much impact so far, though a number of speakers commented that they weren’t sure what would happen if the drought continues. Fortunately, forecasts of El Niño forming in the southwestern Pacific may make that issue moot.

Also threading through the talks was the topic of sustainability and its impact on the market.

Survey of growers

The seminar began with the Vineyard Economics Survey of growers, wineries and lenders. Kathy Archer, president of the Wine Industry Symposium Group, gave the report for founder David Freed, who was away on family business.

She also summarized the wine business last year:

• Replanting and new vineyard plantings are slightly down in California, but there’s more replanting and new planting in the North Coast.

• The big three producers were flat or down in volume for the first time in recent memory (though only in wines retailing for less than $10).

• Imported wines—both bottled and bulk—declined 6% from 2013.

• Direct-to-consumer (DtC) shipments grew 15% in 2014.

• The decline in sales of wines priced below $10 per bottle continued, while sales growth of wines more than $10 increased.

Growers report their top reasons for replanting are changing varieties followed by better rootstocks, closer spacing, planning to harvest and prune mechanically, the time being right with low interest rates, adding water-saving technologies and having backup due to three large harvests. Surprisingly, fewer are replanting due to widely discussed leafroll or red blotch virus.

As to the drought, growers think the biggest impact on them will be more regulations, followed by low yields, but many see no change. Half, however, are adding water-saving technology; one-third are seeking new sources, and one-tenth are investing in recycling.

Grape and wine sales

The second presentation was by Glenn Proctor, partner of The Ciatti Co. He summarized wine sales according to Gomberg, Fredrikson & Associates in Woodside, Calif.:

• California domestic and export sales were up 4% by value, while bottled imports were down 1% and bulk imports down 16%. (They’re down 40% for 2015 so far, partly due to the shipping strike on the West Coast).

• On the other hand, sales of premium wines (more than $10) from coastal wineries were up 15%. But wines selling for less than $10 are 75% of the market.

• The 2014 California grape harvest was 3.89 million tons, down from 2013’s record 4.24 million tons, but still above average. Proctor said that winery buyers are being “deliberate” and even putting some of their own grapes on the market.