Sonoma County District 3 Local Winegrape Commission. Annual Report. July 1, 2011 June 30, 2012

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1 Sonoma County District 3 Local Winegrape Commission Annual Report July 1, 2011 June 30, 2012 The mission of the SCWC is to increase the value of Sonoma County winegrapes and to nurture and protect this agricultural resource for future generations 1

2 Table of Contents Chairman s Report Page 3 President s Report Page 4 Commission Board Members and Alternates Page 8 Commission Committee Members Page Production Recap Page 11 Discussion of Activities and Results Marketing Page 12 Grower Programs Page 20 Sonoma County Financial Statements Page 27 2

3 Chairman s Report What a difference a year makes! Warm weather returned and not big June rains. Most importantly, the grape buyers returned, offering longer term contracts and improved prices. While we can t relax until the grapes are across the scale, growers are more upbeat than they have been since 2008 when the recession began. Winery inventories need to be replenished and bulk wine supplies are at historic lows. The past two short crops have resulted in wineries competing for grape supplies to support their brands. Cabernet Sauvignon and Pinot Noir are in greatest demand, but Chardonnay has also rebounded. Merlot growers are finally getting some attention, in part due to wineries wanting to extend tight Cabernet Sauvignon supplies. The key will be wine sales in the last half of 2012, and of course the size of the grape crop. The economy is still a concern but as we look to harvest 2012, growers have an opportunity to recover from a tough cycle. Through all of this, the Sonoma County Winegrape Commission has been working extremely hard to promote our wonderful wine region and keeping all of us on the cutting edge with our programs and events. The launch of a new brand mark and promotional campaign for fall of 2012 marks a significant step forward in marketing Sonoma County. It is so important for us to develop an effective brand strategy with our partner, Sonoma County Vintners, that communicates who we are; because We Are Sonoma County. It is exciting to envision how powerful our brand will become when the messaging is consistent and focused through the many levels that promote our wine region and our AVAs. It is equally important for our local community to understand who we are and how serious we take our role in the county; to lead as exemplary stewards of the land and important contributors to the local economy. We need to tell our story and not let any misconceptions define us. We realize the impact of our actions and the responsibility that comes with grape growing. Our program will develop fact sheets on key issues that all growers can draw upon when talking with neighbors or community groups. As always, the Sonoma County Winegrape Commission board and staff appreciate the support of it members and look forward to the brighter days on the horizon! All the Best, Steve Sangiacomo 3

4 President s Report This has been an exciting year for the Commission and the growers we represent. Part of the excitement is prospects for a normal crop, part is buyers want our grape and are paying more to get them, and part is the progress that has been made to strengthen the image of Sonoma County region as a premier wine region in the world. The new brand logo has spawned new organization logos that incorporate the brand mark for the Commission, the Vintners and Tourism. This is an unbelievable coming together of marketing groups within the county. And it does not stop there! Other groups are interested in using the brand mark. While part of our Brand Essence is our independence, people are realizing that the independence starts after people know it is Sonoma County talking. Each group, American Viticulture Area (AVA), or winery can develop its own unique story and market position as part of the fabric that makes Sonoma County a world-class wine region. We are at a truly remarkable time for Sonoma County as winegrape growers, wineries, hospitality partners, AVAs, food producers and more take pride in the fact that WE ARE SONOMA COUNTY. The Commission is dedicated to increasing the value of Sonoma County grapes for growers, wineries, and for consumers who buy Sonoma County wines. It has been encouraging that wineries are again buying Sonoma County grapes, offering multiyear contracts and offering pricing that will return most growers to profitability after three very difficult years. The Commission trade ads promoting Sonoma County grapes and the Grape Marketplace were published in top wine and winegrape trade publications throughout the year. Grape buyers and brokers are using the Grape Marketplace to identify growers with grapes they need. The light 2011 crop generated greater grape demand and strengthened prices. If growers have unsold fruit, it is important to have grapes listed on the Grape Marketplace. Now is the time for growers to position themselves with wineries who are committed to buying Sonoma County grapes, whose brands are growing, and who are financially sound. The Commission has worked closely with the Agricultural Commissioner and University of California Cooperative Extension to keep growers up to date on European Grape Vine Moth (EGVM) quarantine areas, treatment recommendations, and compliance agreement requirements for growers, haulers and 4

5 wineries. It is critical that every effort is made to eradicate EGVM so that the quarantine ends. Prospects look good with no first generation EGVM being trapped in Sonoma County in The mild frost season was again good news for growers. The State Water Resources Control Board (SWRCB) regulation of water use for frost protection in the Russian River watershed has been challenged in court, and a decision will likely be rendered before this report is published. The local frost ordinance was put in place in 2011 and modified in Growers who use water for frost protection are required to register their frost system with the Agricultural Commissioner once, and only update that registration if they modify the frost protection system. This simplifies the program and lowers grower costs beginning in The Commission continues to be guided by the Strategic Plan completed in The strategic objectives are as follows: To increase the equity (worth, meaning, positive recognition) of the Sonoma County Brand, To increase the real and perceived value of Sonoma County winegrapes and to assure the economic sustainability of Sonoma County winegrape growing for the future short and long term, and To better educate the public that grape growers are good stewards of the land and of vital economic importance to Sonoma County. Increasing the equity of the Sonoma County brand is critical as the wine market emerges from recession. This is our opportunity to increase market share for wines over $20/bottle and increase the value of your grapes to winery customers and their wine consumers. The branding effort for Sonoma County that has been launched by the Vintners and Commission in order to more concisely define our brand image for target consumers will be seen in national press and online this fall. The brand mark will be provided to AVAs and wineries for use as part of their marketing efforts. The key to brand building is consistent and repeated delivery of the brand message. Promotions using the brand mark and the further expansion of conjunctive labeling as the January 2013 deadline for labeling approaches position us to greatly increase impressions for Sonoma County as a premier wine region and travel destination. SCWC and SCV will be increasing community outreach efforts to increase understanding of grape and wine production to our local economy and our quality of life here. A community outreach plan is being developed. Commission staff will increase their community outreach efforts, but we will also need growers to become involved. We cannot afford to let our critics control the dialog with local governments, regulators and the media. We must get our story out and provide the facts to counter illinformed critics. Your Commission s accomplishments are the result of grower dollars and the dedicated efforts of your Board, your staff, and the many volunteers who serve on committees and assist at events. I personally thank all of you for your many contributions. We leverage your dollars through our collaborations with our marketing partners, in-kind support from wineries, grants from Sonoma County TOT and federal government, and suppliers who are Commission Sponsors. More importantly, by working together we are able to accomplish so much more than any single entity can accomplish by working alone! The Commission s primary function is to promote Sonoma County grapes and the wines they produce. Approximately seventy percent of the budget, including staff time, is dedicated to marketing. The remainder is used to fund Grower Programs and for general operations of the Commission. Our committee structure allows us to work in three major program areas. Karen Thomas leads the Grower Programs Committee and the Sustainable Practices and Business Programs task forces. They are 5

6 responsible for planning and implementing all grower education efforts as well as the Employee Development Program for vineyard employees. Our goal is to provide growers with timely information important to better managing their vineyard business. In today s increasingly complex regulatory climate, changing marketplace, and ever changing production challenges, it is hard for individual growers to remain current on all those topics important to their business. The Commission attempts to track those trends and relay the most critical elements to growers as concisely as possible. In 2011/2012 we have worked on the Vineyard Erosion and Sediment Control Ordinance updates to address vineyard development with tree removal and with the Regional Water Quality Control Boards to influence the Irrigated Lands Agricultural Waiver requirements for vineyard owners. We will continue to follow issues important to growers businesses and let you know of any new regulatory requirements. The Marketing Committee is responsible for direct marketing of grapes to wineries and for new initiatives to promote Sonoma County as a premier wine region. After all, if consumers do not recognize and value Sonoma County wines, growers are at risk. Wineries can source grape from any region. It is imperative for Sonoma County growers that wineries source grape from Sonoma County in order to deliver on their promise to consumers to deliver wines that are recognized for quality and good value at every price point. These marketing efforts are jointly developed with Sonoma County Vintners. The objective of our collaborations with all of our marketing partners is to represent Sonoma County in a more consistent and concise manner so that consumers understand what makes Sonoma County so unique among the myriad of wine regions from around the world that are competing for our place in the market. While we will do some national advertising in the coming year, our budget requires that we reach consumers and build our brand through gatekeepers, i.e. media through our public relations agency; sommeliers who recommend wines to consumers; and key retailers or wholesalers. Over 420 million impressions were generated from media coverage that was tracked by our public relations firm, Lou Hammond and Associates. Sonoma Summit reaches sommeliers, wholesalers and retailers who sell our region and its wines. Sonoma in the City reaches those gatekeepers plus media in key markets throughout the United States. Much like selling grapes, relationships are critical for influencing gatekeepers. We build new relationships each year and work to maintain those from past years. We build those relationships by providing a unique Sonoma County food and wine experience that builds interest in Sonoma County wines. As reported in the Audited Financial Statement, assessment revenues from the 2011 harvest totaled $912,273. An additional $105,683 contributed from Commission Sponsors and grants, or 12% of total assessment revenues. Those monies further leverage grower assessments to promote Sonoma County grapes and wines. The Commission greatly appreciates our Commission Sponsors who invest in Commission programs to support their grower customers and who participate in our tradeshows. Patronize our Commission Sponsor businesses when you need products and services for your vineyard operations. They can be found in the Sponsor section of Annual Sponsor Contributions (includes pruning contest and weather line contributions) $47,988 Dollars and $ense & Grower BBQ Tradeshows $28, Total Sponsorship Contributions $76,638 6

7 The Commission ends its sixth fiscal year, and next year will be a transition year as we build for your future from a solid platform of successes. A new marketing director will be hired to implement many of the works that have been initiated under Larry Levine s leadership, but more importantly to take our marketing program to even higher levels. In addition, the Executive Committee will develop a transition plan for a new President. I will be retiring next spring after serving growers since My years with the Sonoma County Grape Growers Association and now the Sonoma County Winegrape Commission have been tremendously rewarding for me. The support you have given me is humbling. The accomplishments that have been achieved resulted from visionary boards, dedicated staff and an engaged grower community and from our meaningful collaborations with Sonoma County Vintners, Sonoma County Tourism, our AVAs and so many others across the county. Those elements will insure that the Commission continues to effectively represent the interests of the growers and take its work to new heights because We are Sonoma County. I will still be here in Sonoma County after retirement and I hope to keep engaged with the grower community in some capacity. No returning to Iowa for the golden years. Sonoma County is home to Angie and me thanks to you and all the county has to offer. Sincerely, Nick Frey, President 7

8 Commission Board and Alternates Commission Board Members Mark Houser Hoot Owl Creek & Alexander Valley Vineyards Alexander Valley Jim Murphy Vice Chair Murphy Ranch Vineyards Alexander Valley Duff Bevill Bevill Vineyard Management Dry Creek Valley Kevin Barr Redwood Empire Vineyard Management Alexander Valley Joe Dutton Secretary/Treasurer Dutton Ranch Corp. Russian River Valley John Balletto Balletto Vineyards Russian River Valley Mike Rowan Wine Creek Vineyard Dry Creek Valley Steve Sangiacomo Chair Sangiacomo Vineyards Sonoma Valley Vicki Michalczyk Hawk Hill Vineyard Russian River Valley Pete Opatz Silverado Premium Properties Sonoma County Commission Board Alternates John Azevedo Azevedo A-Bar Ranch Russian River Valley Mark Pasternak Devils Gulch Vineyard Marin County Brad Petersen Rawah Vineyards Dry Creek Valley Chris Bowen Hunter Farms Sonoma Valley Brent Young Jordan Vineyard & Winery Alexander Valley Domenic Carinalli D&L Carinalli Vineyards & Winery Russian River Valley Vickie Mulas Alta Vista Vineyards Sonoma Valley Steve Thomas Wildwood Vineyards Sonoma Valley Charles Karren Terra de Promissio Sonoma Coast Richard Mounts Mounts Vineyard Dry Creek Valley Rhonda Smith UC Cooperative Extension Public Member 8

9 Committees and Committee Members Finance Committee Joe Dutton (Treasurer) Richard Mounts Vicki Michalczyk Mark Pasternak Brent Young Brandi Taylor Nick Frey Grower Programs Committee Brad Petersen (Chair) Bill Ricioli Brent Young Kevin Barr Pete Opatz Steve Thomas Chris Bowen Coop Gableman Erin Yolo Diane Kenworthy Vickie Mulas Mark Houser Sunny Du Puis Lyle and Karen Hatten Ken O Farrell Karen Thomas Rich Howell Rhonda Smith Dana Grande Sandy Henson Varela Vicki Michalczyk Joan Griffin Dominic Carinalli Laura Breyer John Hervey Joan Patrick Carmine Indindoli Russian River Valley Dry Creek Valley Russian River Valley Marin County Alexander Valley Bookkeeper Staff Dry Creek Valley Sonoma County Alexander Valley Sonoma County Sonoma County Sonoma Valley Sonoma Valley Sonoma County Sonoma County Sonoma Valley Sonoma Valley Alexander Valley Sonoma County Sonoma Valley Sonoma County Staff Sonoma County Chair Business Programs Task Force Sonoma County Chair Sustainable Task Force Alexander Valley Alexander Valley Russian River Valley Sonoma Coast Russian River Valley PCA/IPM program leader Russian River Valley Sonoma County Sonoma County 9

10 Marketing Committee Mike Rowan (Co-Chair) Duff Bevill (Co-Chair) Judy Goldstrand Denise Gill Pamela Gunsalus Paul Michalczyk Steve Sangiacomo Honore Comfort Tim Zahner Jim Murphy Randy Luginbill Ginger Baker Larry Levine Dry Creek Valley Dry Creek Valley Sonoma County Russian River Valley Russian River Valley Russian River Valley Sonoma Valley SCV SCTB Alexander Valley Chair Winery Marketing Task Force Sonoma County Winery Marketing Staff Staff We recognize the time and talent that is so generously shared to support the work of the Commission and thank the Board, Commission Staff and Committee Members for all their work on behalf of all grape growers in Crush District 3. In addition a special thank you to all the growers who have volunteered to assist with Commission events throughout the year. 10

11 2011 Final Grape Crush Report Crush District 3, Sonoma and Marin Counties, harvested 13.2% fewer tons in 2011 than in 2010, which is 17% below 5-year average yield levels. Average prices increased 3.6% (Table 6) resulting in gross grape revenues of $347,067,377, a 10.1% decrease from The $72/ton average price increase does not reflect bulk wine production. The average price was $2083/T (Table 6). The table below provides tonnage, percentage change from 2010, average prices (Table 6), dollar value for the 6 leading varieties and percentage change from These varieties account for 90% of grape sales: Variety Tons % Change Average Price Dollar Value % Change Chardonnay 52, % $1,844 $96,577, % Sauvignon Blanc 8, % $1,369 $12,136, % Cabernet Sauvignon 33, % $2,111 $69,931, % Merlot 14, % $1,381 $20,259, % Pinot Noir 28, % $2,902 $82,271, % Zinfandel 13, % $2,358 $30,892, % Information on all varieties and crush districts can be downloaded from: The below average yields even with an average price increase of 3.9% severely impacted grower revenues by nearly $40 million. The price increase for Table 10 prices which represent independent grower sales was 4.6%. This increase resulted from stronger spot market prices through harvest. There were new buyers and those who were in the market increased price offerings throughout the growing season. Pinot Noir was the leading red variety for revenues in 2011, eclipsing Cabernet Sauvignon by $12.3 million. Early grape demand in 2012 has been encouraging, with buyers looking for grapes. Both growers and wineries need a return to normal yields and grape prices at sustainable levels in Bulk wine production declined to 3159 tons, down nearly 800 tons from2010. Bulk Wine buyers from other states and California regions are searching the online Grape Marketplace for bulk wine to 11

12 purchase at If you have grapes or bulk wine for sale, those should be listed on the Grape Marketplace. Commission advertisements in vineyard and winery trade magazines promote these online listings to grape buyers and winemakers. Growers need to update their information regularly, including removing any listings if contracts have been signed. Growers and grape buyers need to take advantage of the Grape Marketplace tool Marketing Committee Annual Report The goals of the Marketing Committee in reflect the goals that were set by the Commission during the strategic planning sessions the Commission conducted in These goals were implemented through marketing programs for the Commission and reviewed and evaluated by the Commission s Marketing Committee. The goals are as follows: To increase the equity (worth, meaning, positive recognition) of the Sonoma County Brand, To increase the real and perceived value of Sonoma County winegrapes and to assure the economic sustainability of Sonoma County winegrape growing for the future short and long term, and To better educate the public that grape growers are good stewards of the land and of vital economic importance to Sonoma County. Two very important joint marketing programs were initiated this year. We partnered with Sonoma County Vintners and Sonoma County Tourism Bureau to develop a brand essence for Sonoma County. Industry leaders were interviewed or provided input through an online survey. Based upon those inputs, the targeted consumer segment is the experience seeker. An all-day workshop with 30 growers and vintners led to the brand essence of genuine, independent and adventurous. Sonoma County offers consumers opportunities to explore and discover, creating experiences to share with family and friends. Now a creative firm, Landor, has been hired to translate the essence into a logo and tagline that succinctly describes Sonoma County. This branding will be shared with AVAs and wineries to incorporate into their marketing programs. The second initiative jointly developed with Sonoma County Vintners focuses on community relations. Interviews of 15 community leaders were followed with 200 telephone interviews of local residents. The responses will be used to develop a community outreach program to build greater understanding of the importance of the wine industry to the local quality and our quality of life. One misconception among residents is the percentage of Sonoma County s land area planted to grapes. Average consumer perception was 25%, when in fact, only 6% is planted, i.e. 60,000 acres of the county s 1,050,000 acres. Community perceptions were generally quite favorable, suggesting that our most vocal critics are not representing a significant percentage of the population. Nevertheless, we do need to more effectively provide outreach to our community, elected officials and local news media. The Commission s other marketing results as we pursue these goals are summarized below: 12

13 Goal 1: Building the Sonoma County Brand 1. Sonoma County Promoting Sonoma County Wine Regions In one of the Commission s major initiatives back in 2009 and 2010, SCWC worked closely with the Sonoma Vintners, Tourism Bureau and AVA groups to reach consensus on a Sonoma County Conjunctive Labeling law. It became law on January 1, 2010, and all labels will need to comply by January 1, Sonoma County with the AVA on wine labels Conjunctive labeling was a first step in our major effort to market Sonoma County and its AVAs with the new brand mark and advertising campaign. 13

14 The brand mark is a hand-drawn mark that harkens back to the stamp you might have seen on fruit boxes when fruit was a major farm product and it reflects our agricultural heritage in the stenciled Sonoma and the modern font for County recognizes our innovation and discovery in grape growing and winemaking today. The mark will always be displayed on the angle, again reflecting the handmade nature of our grape production and our wines. The Brand Essence was developed by BHC Consulting, an international firm with Sonoma County roots. Landor Associates in San Francisco developed the brand mark. An Asterix, a creative design firm, is now working on the advertising campaign and website design as we launch the branding campaign through online and print advertising in Food and Wine magazine and the Wine Spectator. These efforts are to elevate Sonoma County and its AVAs as premier wine regions in the world. After all, that is essential if we are to command a premium price for our grapes and if Sonoma County and its AVAs are to be recognized for producing great wines for our consumers. 2. National Public Relations Exposure SCWC utilized national public relations exposure to reach current and potential Sonoma County wine consumers. Public Relations is relatively low cost marketing methods to get the Sonoma County marketing messages to target audiences without having to pay high advertising dollars. It results in Sonoma County, its growers and wines obtaining widespread exposure throughout the United States. Leveraged our working relationship with Lou Hammond & Associates to keep Sonoma County wines and Brand Sonoma top of mind with Travel, Food, Business and Lifestyle editors, and generate major story placements to reach our targeted consumers that regularly spend over $15 per bottle of wine. The media results from working with Lou Hammond & Associates in the past year Media reach Over 420 million readers/listeners - Print/Online reach with articles in such important national/regional publications including: ABC News, Atlanta Journal-Constitution, Associated Press, Chicago Sun-Times, CNBC.com, D Magazine, Forbes.com, InStyle, Los Angeles Times, Men s Health, Miami Herald, Reuters, TIME.com, USA Today, Yahoo.com 3. Sonoma in the City - Chicago & Los Angeles: Build the Sonoma in the City model into a successful template for market outreach by reusing content and tactics, and expanding to new markets. Goals of the Program: Use the Key Influencer strategy to focus limited resources on creating the most impact for this program 14

15 Target key trade, media and consumer segments to ensure that programs and events offer value to all SCV winery members and SCWC growers Create a standardized opportunity for AVA groups to participate in Sonoma in the City event 2012 Results: Conducted major sommelier trade seminars with 75 top tier sommeliers and retailers with Master Sommelier Evan Goldstein and featuring top Sonoma County winemakers and growers. Held a trade tasting for 500 that generated 175 sales leads for wineries. Included 600 guests at consumer tasting events following the trade tastings. Developed new opportunities for the AVA groups to participate in Sonoma in the City events by paying the $5000 participation fee for 7 AVAs. Held tastings at the Williams Sonoma stores in both cities. Held two tasting events in LA Jonathan Club locations with over 400 members attending. These were very successful events, says Honore Comfort, executive director of the Sonoma County Vintners, and we showcased Sonoma County in these extremely important wine buying cities. 4. Sonoma Summit November 2011 (Year 4) Goals of Program: Secure top trade attendees from the Bay Area and around the country and Canada. Create informative and entertaining seminars to explore four main Sonoma County regions and highlight smaller AVAs through the summit. Provide many different Sonoma County growers and wineries opportunities to showcase their vineyards grapes, wine executive leaders, winemakers and brands Results: 37 attendees from prestigious restaurants, hotels and retailers from across the US and Canada participated in the 3-day series of events. Extremely positive response to the seminars that were led by Master Sommelier Evan Goldstein. 15

16 Most attendees indicated that they would be serving and selling more Sonoma County wines in the future. We believe that it s very important to have top sommeliers and retail buyers visit our area, says Nick Frey, president of the Sonoma County Winegrape Commission. They then go back to their own markets with enthusiasm and greater knowledge about Sonoma County and the great grapes and wines produced here. We want them to share their Sonoma County experiences with their customers. 5. Additional Marketing Programs to build Brand Sonoma County In SCWC continued to participate in the following programs that help build the Sonoma County Brand and leverage grower marketing dollars: AVA Cooperative Marketing Grant Program to support AVA marketing initiatives Sonoma County Grape Camp Sonoma Wine Country Weekend Russian River Pinot Noir Forum West Sonoma County Vintners WOW events Goal 2: Promoting Sonoma County Grapes 1. Sonoma County Grape Marketplace a. The Commission has continued to promote the Grape Marketplace to wineries and grape buyers through print ads in trade journals and grape buyer/grower lunches. This web-based tool allows grower to post grapes for sales and buyers to search for grapes by variety and AVA to meet their wine product needs. b. Given the improved market for grapes, more emphasis is now placed on the value of Sonoma County grapes to wine programs. Consumer recognition of Sonoma County as a wine region producing wines of great quality and value is important as wineries compete to grow sales and maintain margins. Sonoma County can support growth of super premium and luxury brands with over 16,000 acres of Chardonnay and over 12,000 acres of both Pinot Noir and Cabernet Sauvignon. 16

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18 6. Vineyard Adventure Program Goals of Program: Provide a vineyard next to a winery where on any given day consumers can tour a vineyard Develop a self-guided vineyard tour in each vineyard where consumers can learn how grapes grow, what happens in different seasons, soil types, cover crops, information on wildlife, sustainable growing practices, etc. SCWC provides signage and creates walking tour for each winery, working with winery staff SCWC provides signage and creates walking tour for each winery, working with winery staff Obtain major national and international publicity for the program Participating wineries include: Schug and Landmark in Sonoma Valley; Quivira and Mauritson in Dry Creek Valley; Balletto and Paradise Ridge in Russian River Valley; Matanzas Creek in Bennett Valley; and Stryker Sonoma and Francis Ford Coppola in Alexander Valley. Results of Program: All wineries report positive consumer reaction to the vineyard tours SCWC worked with Hammond & Associates to assist writers from major publications to publicize the tours Visitors enjoy a Sonoma County Vineyard Adventure at Mauritson Family Winery in Dry Creek Valley Comments from Vineyard Tour visitors include: Lovely to let me meander in the vineyard; Great for kids; A good length to walk so all fitness levels can enjoy it; Well laid out and can walk at your own pace; Very informative a beautiful day and experience; magic. 18

19 Goal 3: Educate the Local Community on the Importance of Grape Growing (to begin in 2012) 1. Implement a Community Relations strategy with SCV to protect our interests and tell our story to the local community Enhance the image of grape growers in the local community Quantify the economic impact of the overall wine industry in Sonoma County Understand the issues of greatest concern to local residents Develop programs to address those concerns Get community recognition for the importance of grapes and wine to the local economy 2. Develop a basic Community Relations plan with the SCV that includes internal processes and structures for crisis communications 3. Initial work has developed Fact Sheets on key issues, e.g. economic impact, water use in grape growing and frost protection, and vineyard expansion. These will be provided to spokespeople, growers and community leaders in the coming year. Conclusions Plan was a continuation of the successful marketing programs the Commission has been conducting for the past six years. Even during the difficult 2011 financial year, the Commission continued to aggressively assist growers in marketing their grapes and building Brand Sonoma County. SCWC will continue to aggressively implement programs to fulfill the goals of the Commission: o o o Increase the value of Sonoma County winegrapes. And insure the economic sustainability of Sonoma County winegrape growing for the future short and long term. Increase Sonoma County Brand equity. Build the worth, meaning and positive recognition for Sonoma County and the grapes and wines produced here. Educate the public on importance of grape growing. Grape growers are good stewards of the land and of vital economic importance to Sonoma County. 19

20 Grower Programs Annual Report Grower Programs are targeted to the farming and business needs of growers. This is done through a series of educational and informational meetings held throughout the year. During the 2011/2012 fiscal year, 78 SCWC-organized grower meetings and events were held. There are no meetings in the months of September and October due to harvest. Grower Programs receives direction on topics and speakers from the Grower Programs Committee. The Committee is made up of growers, vineyard personnel, industry businesses and UCCE staff. Along with program direction, the committee makes nomination recommendations for SCWC's Viticulture Award of Excellence, the Sonoma County Economic Development Board's Spirit of Sonoma award and Department of Pesticide Regulation's IPM Innovator Award. The committee is comprised of two task forces: 1) Sustainable Practices pertains to: Integrated Pest Management (IPM) Appellation Meetings and the annual Sustainable Winegrowing Field Day event; Organic Producer Group (OPG) grower meetings; Pest Control Advisor (PCA) Breakfast meetings; Employee Development Program (EDP) workshops in Spanish for vineyard employees; adult and youth Pruning Contests and the Sonoma County Pruning Championship; Code of Sustainable Winegrowing programs; and recycling events. 2) Business Programs meetings and events include: the annual Dollars & $ense Seminar and Tradeshow; the annual summer Grower Seminar, Tradeshow & Barbecue; Vineyard Owner and Manager meetings; Small Grower Group meetings; and the Smart Marketer Seminars. In addition, Grower Programs collaborates with the Sonoma County Agricultural Commissioner and University of California Cooperative Extension to organize and/or promote timely informational meetings on topics such as the European Grapevine Moth (EGVM), the Plastic Pesticide Container Recycling days, Russian River Watershed frost protection meetings, VESCO, and other issues as they arise. Other partners include the Sonoma County Farm Bureau, California Association of Winegrape Growers (CAWG), Resource Conservation Districts, USDA's Natural Resource Conservation Service, California Sustainable Winegrowing Alliance (CSWA); Santa Rosa Junior College's Ag and Natural Resources Department, and the California Land Stewardship Institute. The 2011 and early 2012 Growing Seasons: For the second growing season in a row, grape growers were challenged by a variety of factors: 1) a slow recovery of the economy and increased premium wine sales resulted in increased new grape buying in 2011; 2) June rains and another extended cool season resulted in poor fruit set and lower yields, plus mildew and Botrytis pressures; 3) rains beginning in early October resulted in significant crop loss with yield levels below the disastrous yields of 2008; and 4) expensive European Grapevine Moth (EGVM) eradication efforts by growers. A series of presentations were made by the Agricultural Commissioner s staff, updating growers on trapping results and timing for insecticide treatments in vineyards within 500 meters of a trap find. Quarantine rules were updated for growers, grape haulers, wineries and green waste handlers. The quarantine further complicates out-of-state grape sales. The 2012 growing season was favorable after two difficult years. Set was generally good and crop prospects returned to normal. A shortage of vineyard workers made for a very busy growing season. Attendance at the May EDP meeting was very light and the June and July meetings were cancelled due to lack of registrations. Grower meetings also saw lighter than normal attendance. 20

21 Sustainable Practices Programs Update: Integrated Pest Management (IPM) Appellation Meetings: In 2012, there were 382 growers who attended IPM meetings in four vineyard appellations during a four-month period. These meetings provide a forum for growers to share regional vineyard experiences and observations, learn about new and improved IPM approaches, and receive important pest and disease alerts. In addition, the meetings provide a venue to distribute timely information on topics such as the Sonoma County Frost Ordinance, water conservation and irrigation initiative issues, and updates from the County European Grapevine Moth (EGVM) liaison. The IPM meetings provided technical information vital to eventual eradication of the destructive EGVM pest in Sonoma County. Laura Breyer led the monthly meetings and provided valuable leadership and PCA knowledge. These meetings offered DPR license holders 1.5 hours of CEU and were offered at no charge to the growers. Monthly meeting notes are located on the SCWC website in the IPM Project file found in the Sustainable Practices folder. The 2012 vineyard hosts were: Rued Vineyards (Dry Creek Valley), Hoot Owl Creek/Alexander Valley Vineyards (Alexander Valley), Mel and Angela Dagovitz at Barricia Vineyard (Sonoma Valley), and Gallo Family Vineyards Laguna North Ranch (Russian River Valley). Sustainable Winegrowing Field Day: Previously called the IPM/Organic Field Day, the 2012 Sustainable Winegrowing Field Day was attended by 143 growers, up slightly from last year. The purpose of Field Day is to specifically highlight scientific research and sustainable and organic grape growing methods. DPR CEU of 3.0 hours was available to license holders. The 2012 agenda was research heavy: Assessing and Improving Vineyard Greenhouse Gas Footprints by Dr. David Smart, UCD; Irrigation Management and Water Conservation by Mark Greenspan, Ph.D.; and Safe, Effective and Efficient Sustainable Pesticide Spray Coverage by Dr. Franz Niederholzer, UC Cooperative Extension. Dr. Andy Walker of UCD spoke on Breeding Pierce's Disease-Resistant Winegrapes. Dr. Walker, Nick Frey and SCWC staff organized a wine tasting of ten wines made with different percentages of V. vinifera parentage to showcase the potential quality of wine made from such grapevines. Laura Breyer presented the ever-popular IPM Season Highlights with some eye-popping pest and disease photos. Allison Jordan of California Sustainable Winegrowing Alliance (CSWA) provided an Overview of CSWA Carbon Projects and Sustainable Winegrowing Programs and Lisa Francioni of CSWA offered an update on Performance Metrics/GHG and the Small Grower Certification Pilot Program. Evaluations turned in at the end of the event overwhelmingly rated the event speakers and topics as excellent. The Field Day event includes lunch and is held at no charge to growers and attendees thanks to the generosity of CSWA who sponsors lunch and a partnership with the Santa Rosa Junior College Ag and Natural Resources Department to waive venue fees. SCWC Platinum Sponsor Wilbur-Ellis provided morning coffee and croissants and break-time refreshments. Chef Graham Parnell donated his time and effort to cook the barbecue lunch. A loyal group of SCWC grower volunteers were on-hand to assist throughout the event. Organic Producers Group (OPG): One hundred and fifty-one growers attended four OPG meetings. These meetings cover many aspects of grape growing including sustainable and IPM-oriented cultural practices. The purpose is to provide information and demonstrate methods to continually improve sustainable and organic growing practices with improved technology, science and grower-to-grower exchange of ideas and practical information. There is no charge to attend the OPG meetings and 1.0 hour of DPR CEU is available. We thank our vineyard hosts/industry lunch sponsors for their time and 21

22 support: Robert Sinskey Vineyards Sonoma / LeBallister's (Carneros); T-Bar-T Vineyard and Clendenen Vineyard Management (Alexander Valley) / Vineyard Industry Products for lunch; beverages and dessert by On Target Sprayers; Benziger Vineyard / Wilbur-Ellis (Sonoma Valley); and Hoot Owl Creek Alexander Valley Vineyards / Rainbow Ag (Alexander Valley). PCA Breakfast meetings: These early morning monthly meetings are led by Pest Control Advisor Laura Breyer. From July 2011 through June 2012, 125 attendees discussed timely PCA topics submitting questions and observations. There is no charge to attend the no-host breakfast and 1.5 hours of CEU are available. Regular meeting attendees from the Ag Commissioner s office and UC Cooperative Extension kept PCAs updated on technical specifics of EGVM, its control and harvest safeguards. Employee Development Program (EDP): SCWC offers at no-cost Spanish-language workshops for vineyard employees for the purpose of attracting, retaining and advancing their agricultural careers. The comprehensive set of seminars teaches important aspects of viticulture and best management practices to produce high-quality winegrapes. The nine workshops in the 2011/2012 fiscal year were attended by 366 vineyard workers and included such topics as: Sustainable Winegrowing's Water Management for Heat Stress and Irrigation; Crop Estimation and Management; Weed Management; Frost BMPs and Why We Need to Care; Basic HR for Field Supervisors; Timing and Recommended Treatments for Disease; Beginning and Advanced Pruning Theory and Technique; and Erosion Control. Sonoma County growers place emphasis on sustainable winegrowing. Many EDP programs in Spanish follow the California Sustainable Winegrowing Alliance's (CSWA) Code of Sustainable Winegrowing Practices Self-Assessment Workbook. With CSWA's permission, SCWC had translations made of these chapters: 3) Viticulture; 4) Soil Management; 5) Vineyard Water Management; and 6) Pest Management. Also translated was information on Frost BMPs and on a variety of common vineyard pests. This information is in electronic form and available to growers at no charge. 13 th Annual Sonoma County Regional Pruning Contests and County Championship: The annual appellation-centered contests are to showcase the skills of the vineyard employees and to recognize pruning as the critical start of the vintage year. Approximately 305 attendees watched 93 vineyard employees compete in five regional contests. The top two pruners in each region competed in the Sonoma County Pruning Championship on February 24, 2012 with around 300 members of the public and wine industry there to cheer on the competitors. During the Championship judging process, entertainment was provided by watching six winemaker/vineyard manager teams from five appellations compete for appellation superiority. The team from Dry Creek Valley placed first; usurping Alexander Valley's recent domination of the competition. The regional pruning contests and County Championship are offered free of charge to all attendees due to generous donations by industry sponsors and a partnership with the SRJC Ag and Natural Resources Department. Sponsors also provide cash and other gifts to the winners. Vineyard employers often match the prize money. The Sonoma County Pruning Championship is part of our marketing program for Sonoma County grape growers, attracting media coverage of the event including television coverage on Univision 14 KDTV and newspaper coverage by The Press Democrat and radio coverage on KSRO. 8 th Annual Youth Pruning Contest: Thirty-seven youth ranging in age from 5-18 years old participated in the Youth Pruning Contest held on January 21, The students are organized by age into 5 groups. They belong to Sonoma County 4-H and FFA chapters and/or are enrolled in agriculture classes at local high schools. Each year this includes a strong contingent of competitors from the Hanna High School. 22

23 We thank our pruning contest sponsors who generously support this event, providing awards and other gifts to the youth pruners. The pruning contest was followed by a high-energy Viticulture Challenge. Twenty-four students took part in the Challenge which consisted of up to 300 viticulture questions tiered to the level of the competing age groups. The afternoon ended with a barbecue sponsored and cooked by Ulises Valdez, Valdez and Sons Vineyard Management. Recycling: The Sonoma County Winegrape Commission participates with the Sonoma County Agricultural Commissioner's office to organize two Plastic Pesticide Container Recycling days a year. The last two Recycling Days brought in approximately 16,000 pounds of plastic. In December of 2011, SCWC organized a pilot program to recycle various vineyard materials. The Vineyard Materials Recycling Day accepted at no charge: vineyard drip hose, drip tube, steel posts, PVC and metal irrigation pipe and bird netting. Pressure-treated grape stakes and posts were received for a pro-rated fee. In all, it is estimated that between 78 and 81 tons of materials were taken out of the vineyards and put into the recycling stream. Evaluations from the first Vineyard Materials Recycling Day were overwhelmingly positive with comments that it was long-overdue. SCWC plans on making this an annual event with the next Vineyard Materials Recycling Day to be held in November Water Conservation and Irrigation Management Initiative: The use of water for frost protection and seasonal irrigation in vineyards has come under scrutiny by California's State Water Resources Control Board. This has resulted in regulations that may limit the use of water for frost protection of grapes in the Russian River Watershed. The sustainability of wine grape cultivation in Sonoma County is largely dependent upon the ability of growers to protect their crops against frost damage and to provide irrigation during the summer and fall when there is typically no natural rainfall. In order to preserve grape growing in Sonoma County and protect threatened and endangered salmonids, growers need to improve water use efficiency for both frost protection and irrigation. To assist growers in this endeavor, SCWC is pleased to announce that we applied for and have been awarded a Western Sustainable Agriculture Research and Education Program (SARE) grant. This grant enables SCWC to increase the technical and scientific level of field experiments and educational programs to help growers improve their water management practices. The WSARE grant was made official in June of 2012 and will be used to: 1) demonstrate use of weather station temperature and dew point data for timely initiation and termination of overhead sprinklers for frost protection and develop a Best Management Practices guide for growers; 2) evaluate use of copper and antitranspirant sprays as alternatives to sprinkler irrigation for frost protection in some vineyards; 3) establish demonstrations in two vineyards to monitor soil and plant water status in order to schedule irrigation initiation and frequency; and, 4) produce educational handouts, posters and PowerPoint presentations of data on efficient management of water use for frost protection and irrigation from demonstration vineyards for use at workshops and field days. Our goals with the WSARE grant are to generate useful and accurate knowledge of alternative methods which ultimately makes the most efficient use of our water resources and to enhance environmental quality. The grant began on April 1, 2012 and ends on May 31, Frost Registration Meetings: Again this year, we assisted the Sonoma County Agricultural Commissioner's office with organizing meetings to assist growers within the Russian River Watershed with what they need to know to be in compliance with the new State Water Control Board regulations on frost protecting with water from the Russian River and on joining any approved Water Demand 23

24 Management groups and programs. Two hundred and one growers attended three meetings held in February. Code of Sustainability: Sonoma County Winegrape Commission partners with the California Sustainable Winegrowing Alliance (CSWA) to offer free sustainability programs to growers and vintners. In March of 2012, 19 growers attended a free workshop on Performance Metrics. This workshop was designed to complement the practice-based Code of Sustainable Winegrowing by making connections between practices and measurable outcomes (performance metrics) while demonstrating why performance benchmarking is important to business. Performance metrics helps growers and vintners measure, track and manage their use of natural resources to optimize operational efficiency and decrease costs. The program especially targets total energy use, water consumption, greenhouse gas emissions and nitrogen applications. In advance of the class, attendees were provided a worksheet to calculate water, nitrogen and energy usage. During the workshop attendees used these worksheets to calculate their sustainability metrics using the new online tools in a computer classroom format. New this fiscal year, SCWC has partnered with CSWA to create and launch a new pilot program called the Small Grower Certification Pilot Program. The pilot is intended to assist small growers and vintners to obtain CCSW-certification and benefit from potential market and regulatory incentives. Currently, the cost of the certification and 3 rd party audit and inability to spread those costs over many acres are a hindrance to many small growers. The pilot aims to better understand all the barriers to certification for small vineyards and wineries and identify methods for reducing costs and eliminating or minimizing barriers. CSWA will use the Sonoma County pilot as a model and offer similar pilot opportunities to other interested regional associations/commissions throughout California. The pilot program includes utilizing SCWC staff time for the certification program to reduce CSWA costs and better prepare growers for the audit process. Because of this, CSWA is able to reduce their administrative, enrollment and annual fees for the pilot program. CSWA and SCWC will cost share the auditor fees. SCWC reached out to the grower base and selected 12 small growers to participate. Request for Proposals were sent out to local auditors and two were selected. SCWC divided the growers into groups of six and each group assigned to an auditor. Both auditors have different methods which will be very helpful in identifying areas to reduce costs and barriers to certification. The first year certification process is ongoing and will be reported in the Vine Times and in the next annual report. Sustainability in Sonoma County: Over 400 grape growers in Sonoma County have completed selfassessments and contributed their data for use in the CA Sustainability Report. Those growers farm 37,286 of the county s 59,887 grape acres. This means that just over 60% of planted acres in Sonoma County are grown sustainably. Statewide results have shown Sonoma County's continued improvement in all but a few of the industry specific criteria used to self-assess sustainability performance. The numbers demonstrate Sonoma County growers' commitment to continually improving upon sustainability. Business Programs: 21 st Annual Dollars and $ense Seminar and Tradeshow: Five hundred and sixty-nine growers, winerelated personnel and commission sponsors attended the event held on January 19 th. This was a small increase in attendance from the previous year. Students in the viticulture and enology programs at Santa Rosa Junior College (SRJC) were invited to attend at no charge. The "Preparing For Tomorrow" program topics included: a 2011 Market Update and Prospects for 2012; Insights on the Overall Wine 24