Port disruptions: California wine industry lost $250 million

David BECK Academic - Economics, Society and Political science - Environment and Technologies (AI, blockchain)

Intense demand for products has led to a backlog of container ships outside the nation’s two largest ports along the Southern California coast.

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California’s wine industry lost more than $250 million in value last summer because of crushing supply chain disruptions at West Coast ports, a new economic report reveals.

A study by UC Davis researchers issued late last year found overall state agricultural exports fell by $2.1 billion from May to September because of difficulties obtaining shipping containers. That’s about a 17% decrease and exceeded losses from the 2018 trade war with China.

Researchers noted that American agriculture products in past years would typically fill more than 40% of all loaded containers leaving California ports and about one-third of those would transport state-grown farm products. The biggest impact was against California tree nut producers, who were estimated to lose about $520 million in foreign sales during the period.

Constellation Brands report third quarter wine sales decrease

Constellation Brands, owner of such local brands as Napa’s Robert Mondavi and Healdsburg’s Simi, reported a 25% decrease in third-quarter net sales for its wine and spirits division as a result of jettisoning lower-end brands from a year ago.

The Victor, N.Y., company, which has downsized to keep only more premium brands in recent years, said it had $568 million in sales during the three months that ended on Nov. 30.

Constellation officials said they expect fiscal 2022 net sales to be down between 21% to 22% because of selling such lower-end brands as Ravenswood to E. & J. Gallo Winery about a year ago. Excluding those brands, the wine and spirits division had a 3% growth.

One bright spot was its Meomi brand that had 27% growth in its digital commerce channel during the quarter. Such e-commerce sales now represent 10% overall for the brand, which is the highest among labels tracked by marketing firm IRI.