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How the Pandemic is Affecting Small Family Farms and Vineyards in Napa

Small, family farms and vineyards in Napa County
Small, family farms and vineyards in Napa County

We are very grateful for the customers and friends that are checking in on us during these scary times. Our Save the Family Farms members have helped and supported Napa transform into the acclaimed wine-producing area that it is today, and we have long been committed and integrated members of the family farm community. We are small operations and the current economic crisis threatens our operational viability. Small wineries were struggling before the crisis as a result of the crippling regulatory barriers to entry to any sales channel. Napa does not allow small wineries without production facilities on-site to conduct tours and tastings. Tastings are the only practicable opportunity for building direct-to-consumer sales. We have vineyards and make our own wine, but we are not permitted to host guests on-site. We are denied this opportunity is that we cannot afford to build a production facility. Thus, we are essentially foreclosed from access to participating in most of the wine economy. It’s a massive struggle to be profitable without being able to host consumers at our properties. In order to keep our land, and continue farming and producing wine – in other words, be a small wine business -- we have had to navigate limited economic vehicles for building brand awareness. Because we cannot activate on-site visits and build a wine club, Micro-Wineries and small family vineyards will need to rely on wine events and restaurants to sell wine and build a customer base. This is a daunting proposition even for big wineries, and given the financial crisis, we now have no sales channels to sell wine. Restaurants have closed, and wine events have been canceled.

These are the challenges facing all small businesses in this sector. It’s hard to be a Micro-Winery, and we were struggling to stay in business before the pandemic. Online sales are an illusory alternative. We have internet sales, but these sales are made almost exclusively by people we’ve had the opportunity to meet face-to-face. For the average Napa Winery, internet sales represent 8% of total direct to consumer (DTC) sales and the tasting room is responsible for 42% of DTC sales (Source: Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wine Sales Survey). Micro-wineries are the small businesses of the wine industry and are necessary to maintain the diversity of land ownership in Napa Valley. Small businesses are necessary for the macro-economic health of Napa Valley as a whole. Micro-wineries provide diversity with a different "type of wine experience" available in Napa, which is increasingly important to younger generations of consumers. And, small family farms represent the historical authenticity of the region. Without opportunities for economic viability opened to this section of small businesses, we will be forced to sell our land or stop farming. We will disappear. We have presented a solution to the Board of Supervisors to enable small, family-owned landholders who grow grapes and make limited quantities of wine, to conduct tours and tastings on vineyard sites. This will not only ensure that our family operations can stay in business, and maintain economic sustainability for our families and small brands for generations to come. There is no other alternative to viability. If these modifications do not take place, small family wineries will go out of business and disappear from Napa altogether. We need to make these changes now so that when visitation returns to Napa, we can maximize all available sales channels for small winery operations. Otherwise, we will lose them. COVID-19 has highlighted in the most dramatic way why we need to make these changes now. We have to support family business because they are important in all industries, and unduly burdensome regulation that prevents access to the economy will put us out of business. The pandemic has accelerated this end-cycle. We are still farming. If the shipping companies remain open, and we get creative with online marketing sales and virtual tastings, small wine businesses like ours might be able to weather this storm…in the short term. But, programs for swift economic recovery are necessary to support this recovery. As it stands now, when Napa Valley opens back up for business, small family farms and vineyards will not be permitted to participate in the recovery. The more avenues to recovery, the more likely small wineries can weather this storm. We need to open avenues for economic returns, not restrict them. It is the only way to ensure small family farms do not disappear from Napa Valley. If ever there was ever a time for Napa to support, promote and preserve the small family farms and vineyards in Napa County – this is it!

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Written by 2nd Generation Small, Family Farmers: Lindsay Hoopes of Hoopes Vineyard and Elise Nerlove Rutchick of Elkhorn Peak Cellars.

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