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July 2020, Volume 26, Number 3

Wine, Food

The global wine organization OIV reported 7.4 million hectares (18.4 million acres) of grape vineyards in April 2020, suggesting that the global acreage of grapes for table, raisin, and wine was stable over the past five years. World wine production was 260 million hectoliters or 6.9 billion gallons in 2019, and world wine consumption was 244 million hectoliters, meaning that stocks of wine rose in 2019.

About 106 million hectoliters or 40 percent of the world?s wine worth E32 billion was traded over national borders.

The EU has 3.2 million hectares or 43 percent of the world?s vineyards, led by 966,000 hectares in Spain; 794,000 in France; 708,000 in Italy; 195,000 in Portugal; and 191,000 in Romania. Turkey has 436,000 hectares of vineyard, with many of the grapes devoted to table grapes and raisins, while Moldova has 143,000 hectares of vineyards used mostly for wine. China has 855,000 hectares of vineyards; the US 408,000; Argentina 215,000; Chile 200,000; Australia 146,000; and South Africa 128,000.

The EU produced 60 percent of the world?s wine in 2019, led by Italy, 48 million hectoliters, France 42 million, and Spain 34 million, the three countries that produced almost half of the world?s wine. Russia, Ukraine, and Moldova produced 7.5 million hectoliters. The US produced 24 million hectoliters, Argentina 13 million, and Australia and Chile, 12 million each. South Africa produced 10 million hectoliters, and China eight million.

The EU consumed 128 million hectoliters or 53 percent of the world?s wine in 2019, led by France, 26 million hectoliters; Italy, 23 million; Germany, 20 million; the UK 13 million; and Spain 11 million. The US consumed 33 million hectoliters; China 18 million; Argentina 8.5 million; Australia 5.9 million; and South Africa 3.9 million.

The best-selling US wine is Gallo?s Barefoot; some 15 million cases were sold for $6 a bottle, in 2019 followed by Sutter Home and Woodbridge. Barefoot added hard seltzer made with wine in spring 2020, joining White Claw and Spiked Seltzer as drinks that appeal to millennials.

Napa-based Beckstoffer Vineyards had revenue of $55 million in 2019 from about 1,000 acres of vineyard. Andy Beckstoffer is credited with helping to raise the price of the best cabernet sauvignon grapes to as much as $25,000 a ton, which in turn pushed up the price of Napa wines.

Beckstoffer in 1967 helped Heublein to buy the Inglenook and Beaulieu wineries, Beckstoffer bought Heublein vineyards as the liquor firm exited the wine business in the 1970s, and encouraged replanting with cabernet in the 1980s as phylloxera destroyed zinfandel grape vines. Beckstoffer aims to keep Napa in vineyards by limiting nonfarm hotel and resort developments, and to keep the price of premium wine high by having the farm price of grapes be one percent of the retail price of the wine made from the grapes, so that $15,000 a ton of grapes translates into $150 a bottle wine.

Food. Covid-19 changed shopping habits. Most consumers made fewer trips to supermarkets and bought more on each visit. Some who bought online and had groceries delivered for the first time, such as retirees, may continue to buy online for both safety and convenience. The consolidation of the food business may be accelerated as some firms go bankrupt and remaining firms automate more of their operations.

Covid-19 altered the demand for particular commodities. Sales of fresh flowers fell as restaurants closed and events were cancelled or postponed, forcing the destruction of tons of flowers that would normally be sold between Easter and Mother?s Day.

Some food manufacturers and retailers may reduce the number of items they make and stock. The average supermarket stocks 33,000 items, a four-fold increase since 1975 (Walmart superstores stock 120,000 items). Warehouse clubs such as Costco and discounters such as Aldi developed less-choice models that appeal to many consumers.

Covid-19 forced many restaurants to rely on takeout orders to stay in business. Consumers often use apps such as DoorDash and Grubhub to order food for delivery, leading to complaints that app fees of 20 to 30 percent are too high. Many restaurants say that they lose money on app-delivered orders, but believe they must accept them to avoid becoming invisible to consumers.

California, which banned single-use plastic bags in 2016, allowed grocery stores to provide them to customers in March 2020 to protect supermarket employees from the coronavirus that may lurk on reusable bags. Several other states and cities also allowed the return of plastic bags.

Americans spent over $100 billion on fish and seafood in 2017, including $70 billion at restaurants and $33 billion at grocery stores. Lobster is the highest value fishery, with wholesale sales of $685 million in 2018, followed by crabs worth $645 million. The CARES Act allocated $300 million for US fisheries impacted by the coronavirus.

Chipotle Mexican Grill in April 2020 paid a $25 million fine for selling food that led to 1,100 cases of food-borne illnesses. Blue Bell Creameries paid $19 million in penalties in May 2020 for knowingly distributing ice cream products contaminated with listeria that killed three in 2015; Blue Bell?s CEO tried to cover up the contamination. A Fresh Express plant in Streamwood, Illinois made bagged salads that were recalled in June 2020 after dozens were sickened from cyclosporiasis.

MIT closed its OpenAg project that promoted growing food in mini-greenhouses in April 2020. Director Caleb Harper won widespread publicity for what he called the ?fourth agricultural revolution? before it was revealed that Harper exaggerated the ability of mini-greenhouses to produce significant quantities of food.

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