A new report by San Diego’s winery trade group has encouraging news for wineries in San Diego County: In 2023, sales and hiring were both up year over year.

That includes 166 wineries, which are scattered throughout urban San Diego neighborhoods like Point Loma and Mira Mesa, cities including Lakeside and Escondido, as well as in the backcountry of Julian, Ramona and Santa Ysabel.

Ramona is home to 50-plus wineries. More than 40 belong to the Ramona Valley Vineyard Association, according to Ginny Boney, RVVA vice president.

These businesses have largely bounced back from the turbulence of the COVID-19 pandemic. Some are expanding.

That’s a striking contrast to how the rest of the U.S. wine industry is doing. According to Silicon Valley Bank’s State of the US Wine Industry Report, “Direct-to-consumer volume and value sales were lower in 2023 and tasting room visitation dropped for the second straight year.” That report says interest in wine is dwindling as other lures — beer, canned alcoholic beverages, liquor and cannabis — beckon, especially among key younger drinkers.

California’s wine industry also is hurting. Consumption fell almost 9 percent in 2023, according to a report cited May 8 in the San Francisco Chronicle. Trouble has been brewing for a while. “Who Will Save the US Wine Industry? Not California Boomers” reads one recent headline by Bloomberg. And Last September, Meininger’s International, a wine trade publication, wrote about California’s grape surplus amid falling demand.

San Diego’s wine industry is a drop in the bucket — producing around $55 million, compared to with California’s $55 billion. But its winemakers are doing a lot right, according to the San Diego wineries report, by the San Diego County Vintners Association trade group, which examined economic data and surveyed winemakers to piece together a state of the industry.

The data tells a story of resilience and resourcefulness, said Vince Vasquez, the report’s author.

“That is, I think, something that is a clear indication that wineries, at least in San Diego County, have found the solutions they need to be successful for serving existing and new customers,” he said.

Some of the report’s findings:

A rosé picture

Vasquez, the policy and data analyst hired to conduct the research and author the report, said San Diego’s wineries have mostly rebounded from pandemic era disruptions and are finding ways to draw in more customers.

While consumption fell 2 to 4 percent in the U.S. and more sharply in California, here it grew 11 percent. (The increase was due to more wine sold and less to higher prices, he noted.)

Last year, San Diego saw a tourism bump, and “all of the wineries benefited from that,” Vasquez said. But they’re also focusing on events, boosting marketing and, at a time when QR codes and apps make contactless ordering easy, vineyards are investing in customer-facing, tasting room staff. At wineries, storytelling sells: chatting with staff, meeting the owners, learning about the history of the winery, Vasquez said.

“Engagement from staff is credited as a key component to the winery experience,” he said.

Boney of RVVA agreed.

“Frequently at the wineries here, because they are small, guests can meet the winemakers and actually see the vineyard,” she said. “And if people are interested in being educated, we do educate.”

Some of the challenges faced, particularly by Ramona venues, is that the wineries are boutique and small, she said.

“In larger areas of the county, including Temecula, there are often hotels and spas and other attractions, which we don’t have here in Ramona,” Boney said.

During the pandemic, outdoor spaces were vital — and now are being used for events and weddings.

While many Ramona wineries are currently not offering venue for weddings, and local regulations have momentarily paused live music engagements, outdoor locations continue to host a range of events.

“Some of the events are wine-centric, like wine pairing events and wine knowledge sharing sessions,” stated Boney.

Moreover, wineries host a multitude of activities that could be centered around native wildlife, special meals, historical discussions or presentations by local specialists, she added.

The analysis highlighted a key macroeconomic scenario that played a part in a successful year: Enterprises have the ability to procure the necessities for wine production and distribution.

“Supply chain challenges are no longer a significant issue or a meaningful issue for wineries here,” Vasquez said. The survey, which received 38 responses from 166 licensed current and future wineries, excluding satellite tasting rooms, indicated a significant decrease in concerns about material sourcing compared to the previous year. In 2022, 81% of respondents expressed worries about sourcing glass; a mere 19% had no supply chain concerns.

In 2023, the situation reversed: Only 19% were concerned about obtaining glass, and 81% had no worries regarding supply chains.

However, the positive change was counterbalanced by higher costs in a year marked by ongoing inflation, as noted in the report.

Buzz kill

Even though wineries are fostering relationships and attracting patronage, the report also highlighted certain alarming trends.

Smaller wineries seem to be grappling with harsher conditions.

“The surge in revenue in 2023 was largely propelled by the burgeoning large wineries in the region, which created substantial jobs and sales interactions. A significant proportion of the smaller wineries are either enduring another year of stagnant or reduced sales, or witnessing marginal increases in sales,” the report asserts.

In Ramona, Boney attributes much of the depreciation in figures to inflation.

“I seriously believe inflation is making a noticeable impact on people, significantly reducing their disposable income. Particularly in California, majority of people’s income gets spent on necessities like gas, energy, and groceries,” she expressed.

One more obstacle is the decreasing affordability of insurance. Many wineries scrutinized in the survey have reduced shrubbery and created defensible space around their premises, and a few even procured firefighting equipment in 2023. Yet, almost one-fourth of those surveyed were denied insurance coverage and the rates for 60 percent increased.

Having to face insurance denial and rate hikes because of wildfire risks, more and more wineries surveyed resorted to Fair Access to Insurance Requirements (FAIR) Plans. These plans, while expensive, are viewed as the last-ditch insurance coverage option.

According to Boney, the insurance dilemma in Ramona isn’t unique and is quite similar to other parts of the state. When this is combined with the additional liquor liability, “securing affordable insurance remains a challenging task here.”

San Diego’s wineries often remain overlooked, overshadowed by not only Temecula but also the craft beer industry. Even outside of San Diego, in places like Arizona or Chicago, brands like Stone Brewing are well-known.

According to both Weber and Vasquez, in order to compete, local wineries need to increase their visibility. This could be achieved through more wine events, greater collaborations, and an uptick in marketing efforts.

Boney pointed out a common challenge that wineries, especially those in Ramona, typically face – lack of awareness about their existence. He shared, “Every week someone confesses their ignorance of not only the existence of any wineries in Ramona, but also the surprising number of these establishments.”

She mentioned that the RVVA is deploying numerous promotional strategies to address the lack of awareness.

The RVVA, along with most wineries, have made their presence felt on social media. There has also been a rise in the amount of hosted events, and the costs are usually kept low to attract a larger crowd, she added.

Boney said, “Our participation in numerous events helps us generate buzz, these include wine pouring events in Temecula and across the county. We also organize the Holiday Wine Trail and the Summer of Rose, which runs from June through August.”

One interesting aspect to note is that wineries are scattered across various locations ranging from the coast of San Diego to the desert and the border, said Vasquez. Unlike in Napa and Temecula where they’re clustered together, in San Diego one doesn’t have to travel far to sample a local wine.