Skip to navigation

Skip to main content


January 2020, Volume 26, Number 1

Wine, Food

The California wine grape harvest was a record 4.5 million tons in 2018, up six percent from 2017. The 2019 crush was smaller at 4.2 million tons, but unsold wine from 2018 lowered prices for 2019 grapes, so that some Napa Cabernet sold for as little as $1,500 a ton, less than a third of 2018 prices.

There is too much wine chasing too few US consumers. A sixth of US wine consumers, some 35 million Americans, drink 95 percent of US wine. Industry leaders blame calls for Dry January and sober September as well as the popularity of fruit-flavored malt beverages such as White Claw and Truly for a one percent decline in wine sales in 2019 to 370 million 12-bottle cases. The value of wine sold in the US in 2019 was $38 billion or $104 a case or $8.60 a bottle.

Over 90 percent of California's wine grapes are harvested by machine. Manufacturer Pellenc says that handpicking and hauling wine grapes costs about $2,000 an acre, or $400 a ton for a five-ton yield. Machine picking and hauling with a $400,000 self-propelled harvester costs growers $250 to $500 an acre. The cost of machine picking does not increase as yields rise; custom harvesters charge $400 to $600 an acre for machine harvesting and hauling.

Machines can operate efficiently at night, removing stems and leaves in the field and reducing labor needs in the winery. Newer machines can handle delicate varieties, such as the thin-skinned Pinot Noir.

The US has almost 10,000 wineries, including 40 percent in California. California produces over 80 percent of US wine, followed by Washington. The largest US winery, E. & J. Gallo, announced plans in Fall 2019 to purchase the wine brands of Constellation Brands Inc that sell for less than $11 a bottle, including Clos du Bois, Ravenswood and Mark West.

Global wine production was 263 million hectoliters (26.4 gallons) in 2019, down from 294 million in 2018. Production was down by 15 percent each in France and Italy, the world's largest wine producers, and down 25 percent in Spain, due to a wet and cold spring followed by a hot and dry summer.

The US imposed 25 percent tariffs on some European foods and wines in October 2019 in retaliation for EU subsidies for Airbus. Trump threatened 100 percent tariffs on sparkling wine to retaliate for taxes that France wants to levy a three percent tax on the digital services provided by US tech firms. France says that 15 countries plan to tax digital services in 2020.

Domaines Barons de Rothschild (Lafite), producer of Ch?teau Lafite Rothschild wine, now produces Domaine de Long Dai in the coastal province of Shandong from a combination of cabernet sauvignon, cabernet franc and marselan grapes. The wine sells for 2,400 yuan ($335) a bottle.

Food. Walmart accounts for a quarter of US grocery store spending, but its market share varies across the US. In Midwestern states, Walmart accounts for most grocery store sales in many markets, including a 95 percent share of the grocery market in Atchison, Kansas.

Kroger, the largest grocery-only supermarket chain with 2,700 stores and 2019 sales of $121 billion, is laying off employees. Same store sales growth has slowed, as Kroger is squeezed by German discounters such as Aldi and Lidl, high-end grocers such as Whole Foods, and general stores such as Walmart. Albertson's, the second-largest chain with 2,260 stores and $61 billion in sales, may go public.

Aldi and Lidl are expanding in the US, forcing US supermarkets to respond to their deep discount strategy and marking the second revolution since Walmart began selling groceries in 1988. Aldi, in the US since 1976, has 1,900 US stores. Lidl began US operations in 2017 on the East Coast, and has 100 US stores. Both Aldi and Lidl stores have a limited range of goods and feature store brands.

Rural areas with declining populations often lose their grocery stores, leaving food deserts. USDA estimates that five million rural residents must travel at least 10 miles to buy groceries. Many small towns have dollar stores that sell frozen and packaged but not fresh produce, although Dollar General plans to add fresh produce. Residents often make weekly trips to Walmart or other chain stores to stock up, treating local stores as places to shop for last-minute items.

Nielsen estimated that US fresh produce sales rose by $1 billion to $62 billion in 2019. Studies show that the quality of fresh produce is a major factor in determining where shoppers shop.

Prepackaged salads produced by New Jersey-based Missa Bay for Ready Pac Foods and contaminated with E. coli O157:H7 sickened over 100 people in Fall 2019, prompting a recall of all romaine lettuce grown in the Salinas Valley; growers plowed under unharvested Salinas fields. There were similar E. coli outbreaks linked to romaine lettuce in Fall 2017 and Fall 2018.

Sales of plant-based meat substitutes are one percent of US meat sales, but are rising rapidly while overall meat sales decline. Meat producers fear a repeat of what happened with milk; almond, soy and other non-dairy milks are now about 10 percent of overall milk sales. USDA regulates meat, poultry and eggs, while the FDA regulates plant-based products.

How much do consumers consider the nutritional value or environmental impacts of their food? McDonald's says that the first priority of consumers is taste, highlighting the difference between what people say and what they do. Healthy snacks are about 20 percent of global snack sales, while indulgent snacks such as chocolate or cookies are 80 percent.

MIT closed its Media Lab's Open Agricultural Initiative in October 2019, citing undisclosed ties between director Joichi Ito and sex offender Jeffrey Epstein. Open Ag grew food in shipping containers reconfigured into high-tech greenhouses to provide optimal growing conditions; the goal was a fourth agricultural revolution. The Open Ag project claimed to use computers to learn the optimal conditions for growing basil.

Americans eat an average 4.4 pounds of shrimp a year, and consumption is rising with lower prices. Most shrimp is farmed, and the industry is often blamed for destroying mangroves, using too many antibiotics, and exploiting migrant laborers in Southeast Asia. Seafood Watch, Best Aquaculture Practices, and the Aquaculture Stewardship Council (Europe) certify labor and environmental compliance by shrimp farms that pay for certification.

Swiss-based Nestle, the world's largest food company, has 300,000 employees and sales of $93 billion in 2018, including $8 billion from bottled water.

Olive oil prices fell sharply in Spain, producer of 53 percent of the world's olive oil in 2018-19, after the US imposed 25 percent tariffs on bottled olive oil in retaliation for EU subsidies for Airbus. The US is the world's largest olive oil importer. Americans consume an average one kilogram of olive oil a year, compared with 10 kilograms a year in Italy and Spain.

Ghana and Ivory Coast produce over 60 percent of the world's cocoa, plans to add a $400 per metric ton charge to the price, now about $2,500 a ton, in October 2020 to generate about $1.2 billion a year for cocoa farmers and their families. Cocoa is over half of the value of Ivory Coast exports, and a third of Ghana's exports.

The so-called COPEC (Cocoa OPEC) will promise farmers $1,800 a ton, with the $400 premium saved and given to farmers when cocoa prices dip. Industrial chocolate maker Barry Callebaut of Zurich, the world's largest buyer of cocoa, said it would pay the premium and pass on the extra costs to its customers.

Efforts to form a cocoa cartel in the 1980s failed. Some predict that the 2020 effort may have unintended consequences, such as spurring more production and depressing prices.