First and foremost, we wish to extend our sincere condolences to the families who have lost homes, businesses, and loved ones as a result of the wildfires that are currently ravaging Northern California. Natural disasters have been an all too frequent occurrence this year, from the hurricanes that devastated Texas and Florida to the tragedies that befell our neighbors in the Caribbean and in Mexico. At Estate Wine Brokers, our hearts go out to all those affected.

As a company that is working to build a reputation as forward thinkers in the wine industry, we do not want to appear as though we’re privileging the needs of the makers of luxury goods over those of the many individuals caught in the fray, nor do we wish to represent the current situation as a business opportunity (it most certainly is not). That said, with a growing number of wineries reporting damage and devastation continuing unchecked throughout Napa and Sonoma counties, we believe that this disaster will have ramifications for the wine industry as a whole, and it is our job to forecast the impact.

In 2016 alone, California produced over 680 million gallons of wine, generated over $34.1 billion in revenue, and employed over 786,000 individuals. Despite the fact that the 2017 harvest was largely concluded before the fires began, these numbers could take a hit in the coming years. The physical destruction of vineyards and wineries may play a role in this, as will the imminent impact on wine tourism in the North Coast of California, but perhaps most ruinous is the threat of smoke taint, a phenomenon whereby wine absorbs off flavors from nearby burning wood and becomes unpalatable. While the full extent of the damage remains to be seen, it is clear that supply will be reduced.

The California bulk wine market is a major supplier to the private label wine industry which accounts for over $500 million in revenue annually. With a great deal of wine in tank and barrel that has now been destroyed or rendered unusable, we expect there to be a substantial loss in availability in supply from the bulk markets, putting upward price pressure on California wines. This could give other wine producing states such as Oregon and Washington an edge in this lucrative market, further damaging the California wine industry.

Things are no better in the fine wine market - while approximately 90% of the harvest has been completed in Napa and Sonoma, the grapes remaining on the vine are mostly late-ripening Cabernet Sauvignon, including grapes that are used to produce some of the most expensive wines in California. What’s more, smoke taint can affect wines that are resting in bottle at wineries, meaning that the wildfires could affect the supply of several past vintages that have yet to hit the market in addition to the 2017s.

Again, nothing compares to the loss of life and property in this situation. We wish all those affected nothing less than a speedy recovery and condolences on their losses, and encourage all readers in unaffected areas to do their part by donating to charitable causes and supporting the California wine industry.