Good grapes may not bring in high wine sales

NAPA VALLEY, CA (KGO) -- It is nearing harvest time in California's wine country, but this year it's not all about vines heavy with grapes, vintners are also feeling the effects of the sagging economy. That is making consumers choosy and tourists tight fisted.

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It's early harvest at V. Sattui Winery for Sauvignon blanc grapes. Winery owner Dario Sattui says mild weather has meant a longer ripening season.

"We think this is going to be a great year for us," said Sattui.

It's a hopeful sentiment being echoed by members of the Napa Valley Grape Growers Association meeting in the middle of Trefethen Vineyards. Along with toasts is an economic reality.

"A lot of our grapes are locked into long term contacts and that is kind of the story across Napa, that really buffers the grower against the effect of the recession," said Jon Ruel, with the Trefethen Family Vineyards.

Prices are where they were two to five years ago. And customers are being more selective.

"We have a very big wine club which has helped us. The consistent consumer that always comes back, they get their monthly shipment," said Michael Beaulac, from Pine Ridge Vineyards.

It's always been about the grapes in the wine country and Napa business people are hopeful this crop will produce a fine vintage and also mean a stimulus to the economy with more tourists in the valley.

"Our sales are slightly down," said Sattui.

But Sattui is countering a trend. The number of customers is up. "So people are still coming, buying our wine, but maybe when they were buying 6six bottles before, they're a little more cautious in their spending, buying two or three bottles now," said Sattui.

And they're not buying the expensive wines, so wineries are keeping prices down. With fewer people going to restaurants, wine sales there are loser and hotels feel the effects. Group sales are down. Room rates are lower on weekdays.

"We try to drive more value into the product for a guest coming up here, during the midweek, they can take advantage of a number of spa and getaway packages," said Steve Andrews, from Villagio Inn and Spa.

There's a new tasting room under construction in Yountville. Whether that's a smart move given the economy, remains to be seen.

"I wouldn't want to be an upstart winery or a brand new winery starting out right now," said Beaulac.

And with an influx of tourists poised to descend on the valley for harvest, there will be good times for the next two months, but there are tough times ahead.

"There's going to be some wineries for sale coming up within a year or so and some good vineyards," said Sattui.

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