Winemakers are 'being tested' as wildfires spread, here's why the fine wine consumer will not experience the smoke-effected grapes

Mass evacuations are now being implemented in California as the Glass Fire makes its way toward wine country in Napa and Sonoma county. Tom Danowski, Oregon Wine Board President, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the impact these wildfires have on the overall wine industry and more.

Video Transcript

BRIAN SOZZI: Wildfires continue to rage along the West Coast. Mass evacuations are now being implemented as the Glass Fire makes its way toward California's wine country, Napa and Sonoma County. Tom Danowski is Oregon Wine Board president, and he joins us now. Tom, so immediately, I'm a wine newbie. Crack open a can, rip it out of a box, you name it. Our producer, Nick Monte, is more the wine connoisseur. How is the smoke impacting the grapes and wine industry?

TOM DANOWSKI: Well, thanks for the question. Good morning, Brian. We're glad to have you and all of your friends in our wine category. The fire activity on the West Coast, all up and down the West Coast, has been serious in many places. Unfortunately, we're getting a little bit used to dealing with fire smoke. But it has been a phenomenon that has affected all three main wine-producing states on the West Coast-- Washington, Oregon, California.

And it's affected, really, all agricultural crops. In fact, it's a serious issue again today, even, in Calistoga and Santa Rosa in Northern California. Our community of winemakers all up and down the West Coast have gotten pretty adept at dealing with wildfire smoke. And we're being tested this year. But smoke impacts are so regional and situational that it's easy to see the headlines and think it's a disaster, and it is serious in many places. But we're getting better at learning how to deal with it.

ALEXIS CHRISTOPHOROUS: Tom, what is this going to mean for restaurants, for wine stores, consumers looking for these wines on store shelves? Will they simply not be there, or what is there? Are we going to see some price inflation just because of the damage the fires have done to the vineyards?

TOM DANOWSKI: Sure. It's a great question, Alexis. For so many wine shops, it's interesting. Nielsen data confirmed for us that with restaurant activity being somewhat diminished and some wine tourism being on hiatus in some areas because of the lockdowns, a lot of wine buying behavior has shifted to fine wine shops, Costco, grocery stores.

What this means for the consumer-- I like the way one of the writers said it at the "San Francisco Chronicle." The wine consumer is highly unlikely, highly unlikely to ever experience a smoke-affected wine. Winemakers just simply will not be releasing them if they're not confident enough.

In response to your question about what it means, it's unlikely to mean significant price increases. Most wineries are selling their '18 and '19 wines. In many areas, production will be largely unaffected. There will be some areas that will be affected by fire smoke. But in terms of availability, both back vintages and wines that wineries have in reserve cellars can be released to keep restaurants-- those that are open-- supplied and to keep shelves full.

BRIAN SOZZI: What does this mean for the local liquor store? Will I still be able to go in there and leave with my brown bag of wine, my favorite brown bag of wine or boxed wine? Will there be fewer choices?

TOM DANOWSKI: I think in most cases, Brian, it should not mean significant reductions in inventory. What it will probably mean is that there might be some more white wines available to the consumer. Red wines often present some special characteristics that winemakers can intervene with in the cellar. It's a great chance for consumers to rediscover some of the West Coast's great white wines, like Chardonnay and Riesling and Albariño and Viognier.

ALEXIS CHRISTOPHOROUS: What about the taste of these wines? Will the fires impact them? There was talk that maybe people would actually be able to taste the smokiness, if you will, of the fires. Or to your point, are vendors just not going to release these, and at what cost?

TOM DANOWSKI: It's a great question. What we've learned about fire smoke compounds-- not only our colleagues in Australia, but all up and down the West Coast, we collaborate on this information. And winemakers have a number of things they can do to deal with smoke-affected grapes. They can adjust fermentation temperatures. They can adjust barrel-aging regimes for wines.

It's highly unlikely, as I said when quoting Esther Mobley in the "San Francisco Chronicle," that the fine wine consumer will experience any wines that are smoke-affected. They simply won't be released.

Our grape crop on the West Coast is a $4.5 billion crop every year. And every winemaker knows the reputational risks that could come from releasing a wine that isn't ready for the marketplace. We also compete in a category where wine writers are pretty blunt and pretty honest when they taste wines and write about them. So it is very top of mind for winemakers to be very conscious, and so the consumer is unlikely to experience any wines that are exhibiting smoke characteristics.