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Summary Apply Week 2 The Central California Winemaking Industry .docx ECO/535 The Central California Winemaking Industry University of Phoenix ECO/535 The California Wine Industry California is number 4 in the world for leading wine production and makes up 8
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Apply Week 2 The Central California Winemaking Industry .docx ECO/535 The Central California Winemaking Industry University of Phoenix ECO/535 The California Wine Industry California is number 4 in the world for leading wine production and makes up 81% of all United States wine. Due to the suc...
apply week 2 the central california winemaking industry docx eco535 the central california winemaking industry university of phoenix eco535 the california wine industry california is number 4
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ECO/535
The Central California Winemaking Industry
University of Phoenix
ECO/535
The California Wine Industry
California is number 4 in the world for leading wine production and makes up 81% of all
United States wine. Due to the success of the wine industry in California, it has created 325,000
jobs in California alone and 786,000 nationwide. Each year this draws in 23.6 million tourists to
visit this region which spend 7.2 billion in California ("Media & Trade", 2021). I was shocked to
see how much wine does for the economy through these facts and statistics. Most people don’t
specifically look at where the wine came from as long as it is their favorite variety; for example,
chardonnay, pinot grigio, or merlot. Now that we have a brief overview of the statistics lets dive
into to a deeper analysis of this industry.
Competition and Pricing
California is number one in the United States for wine, but they are rivaled by competing
imports from places like Spain, Italy and France. True wine connoisseurs do their homework on
the brands which is made much easier with technology resources to learn about where it was
made and what factors contribute to their taste and/or overall quality. Just like any other industry
your brand can truly drive you forward and lead consumers to buy more of your product Being
able to differentiate from your competitor can help justify selling their wine at a higher price.
However, the younger generation and millennials are noted as not drinking as much as previous
generations but if they do, they reach for things like seltzers with less calories and lower carbs.
Due to these factors California winemakers are forced to put their higher-quality wine into lower
price bottles because of oversupply (McCoy, 2020).
, Supply Chain
Currently due to the pandemic and as stated previously, millennials are not only not
drinking as much, but they are also not gravitating towards wine either which is causing an
Over supply. Due to their being an oversupply this leads us to believe that there is a
low demand as supply and demand has an inverse relationship. California has a lot of
producers of wine which makes it so there is a very competitive arena. With all of this
being said the more efficient and quicker that they can produce quality wine, get their brand
out there, and market themselves appropriately the more likely they are the ones that will
sell. For example, a well-known winery is typically going to have the latest and greatest
tools to automate manufacturing to speed up the process. Smaller no name wineries will
definitely struggle especially during a time when less people are venturing out to new
places due to the pandemic.
Factors of Production
When it comes to factors of production for the wine industry the top four are land for the
vineyards, labor for someone to work the vineyards, capital whether it be human or land, and
entrepreneurial to run the business and build the brand. Land in the wine industry is extremely
important because of the factors of soil, sunlight, climate, and weather. All of these factors truly
play into what type of wine the entrepreneur can produce and maintain. When it comes to labor
there are many ways that wineries can harvest their crop, but manual is the best. This allows the
pickers to select the best grapes, but it requires more resources and is much slower. There are
many tasks that need to be done in the meantime while the plants are growing such as pruning to
limit the size of the vine and make sure the plant can get sunlight, training and trellising to make
the vines grow in the direction that is needed, and managing the overall canopy (Torres, 2021).
Having a vineyard and picking where it should be located is not something that can be
taken light heartedly. I truly believe that land and the entrepreneur are the most important factors
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