California Ag Network

Tag: wine industry marketing

  • CDFA Holds Dairy Double Header

    On Monday, February 2, Punxsutawney Phil predicted six more weeks of winter. While Phil was focused on the weather, the California Department of Food and Agriculture (CDFA) was busy holding two virtual meetings on California dairy issues.

    The first meeting was a Producer Review Board (PRB) meeting. After the meeting was called to order, CDFA addressed board vacancies. The call for nominations remains open due to multiple vacancies, some resulting from recent resignations. Members of the dairy community were encouraged to apply or nominate qualified candidates.

    The discussion then turned to remaining funds in the former Pooling and Marketing branches of the state milk marketing order, which were left over after the transition to the California Federal Milk Marketing Order. CDFA has been providing updates on these funds for several years in preparation for their eventual release. At this meeting, CDFA reported that updated accounting showed lower balances than previously announced: approximately $2.053 million in the former Pooling Division and $2.6 million in the former Marketing Division, down from earlier estimates of about $3.5 million in each account.

    CDFA explained that it is conducting a transaction-by-transaction audit of the originating accounts to confirm the final balances, but indicated that the figures presented at this meeting were believed to be accurate. The PRB focused on the former Pooling Division funds, while the Marketing Division funds were scheduled to be discussed in a separate meeting later that afternoon.

    Related to this discussion, CDFA announced that the Quota Implementation Program (QIP) administrative fee was reinstated effective February 1, 2026, due to low account balances and the need to fund administrative operations, including development of a new QIP software tool.

    CDFA presented two options for use of the former Pooling Division funds. One option, previously discussed, was to refund the funds directly to individual dairy producers, though CDFA noted that administrative costs would significantly reduce the amount returned. A second option, newly identified by CDFA, but offered by Western United Dairies Board in January of 2024, would use the former Pooling Division funds to cover QIP administrative costs, eliminating the need to charge producers the QIP administrative fee for more than a year.

    The PRB adopted resolutions recommending that the Secretary of Agriculture move the former state pooling funds into a separate account to improve transparency and use the funds to support QIP administration. Later in the meeting, the board also approved a resolution to suspend the QIP administrative fee assessment effective March 1, meaning producers will be assessed the fee for February only.

    The agenda then moved to hardship petitions, with 16 requests before the board. CDFA legal staff recommended tabling hardship requests from four dairies involved in ongoing litigation against the Department and individual board members; the board approved this recommendation.

    The board denied the first hardship request, submitted by a raw milk producer citing bird flu impacts. At this point, several other petitioners, or their attorneys, requested continuances to allow more time for preparation, which the board approved. As the meeting approached 1:00 p.m.—when the next CDFA meeting was scheduled—the board moved more quickly through the remaining items and another hardship was denied. CDFA had deemed four of the hardship requests incomplete. The board took up all four in one motion and denied them due to insufficient information. Another request was tabled due to time constraints, and the meeting adjourned at 1:05 p.m.

    The second meeting focused on funds from the former Marketing Division. CDFA referenced a prior meeting in which approximately $3.5 million had been discussed as potential funding for industry grants benefiting both producers and processors. At that earlier meeting, there was broad agreement by the industry that the California Dairy Research Foundation (CDRF) would be an appropriate entity to administer those funds.

    At this meeting, CDFA clarified that the available funding was actually $2.6 million, reflecting the updated accounting. CDFA also explained that it could not issue the funds to CDRF as a block grant because CDFA grants must be issued on a reimbursement basis for projects already underway or completed. Meeting participants suggested that the funds be treated as a refund to the industry rather than a grant, since the money originated from producer and processor assessments. CDFA expressed openness to this approach but indicated that further review would be needed. CDFA concluded by stating that it will continue working with industry representatives to determine the most appropriate and effective use of the former Marketing Division funds, with further discussion to follow.

    Punxsutawney Phil may be calling for six more weeks of winter, but he does not have the insight of seeing the bees show up in California from all over the nation as an indicator that Spring is just around the corner and almond blossoms will soon be here. — By Paul Sousa, Director of Regulatory and Environmental Affairs for Western United Dairies

  • The Challenges of Establishing a Wine Improvement District

    Sonoma County Winegrowers — Since it was announced last month that leaders in the Sonoma County wine community were exploring the possible benefits and risks of establishing a Wine Improvement District, we have heard comments and questions from many, even those who don’t farm grapes or make wine from the County. That is fine as we appreciate the interest in the idea and the passion for Sonoma County’s wine community.

    Make no mistake, the greatest risk we face today is to do nothing and hope things improve. Our job is to explore any and all solutions to the challenges facing us – partnerships, grants, sponsorships, including a Wine Improvement District.  In fact, we continue to invite any proposals, ideas and funding models to consider to help us overcome these challenges.

    With this in mind, here are some facts about Wine Improvement Districts (WIDs) and the process in Sonoma County since February 2025:

    Fact: There are currently four WIDs in California with at least three others in the process of being established or considered as options for stable marketing funding.

    Fact: During February  – March of 2025, the Sonoma County Winegrowers did the following:

    • Spoke to leaders in other wine regions who have implemented a WID.
    • Participated in a regional association meeting hosted by California Association of Winegrape Growers and the California Wine Institute with a handful of trade associations in attendance, where Civitas and leaders from wine regions with WIDs presented general background on WIDs, the process to establish a WID, and the benefits, challenges and results.
    • On March 31, the Sonoma County Winegrowers board of directors voted at its meeting to spend up to $100,000 to pursue the formation of a business improvement district under the Sonoma County Winegrowers management which is the very model that the Lodi Winegrape Commission is following. Know that every Sonoma County Winegrowers meeting has oversight by California Department of Food & Agriculture and the board is nominated and elected by the entire grape growing community who pay assessments.
    • Hiring Civitas, which has worked with the other wine regions and is recognized as the national expert, was necessary to understand how a WID works – how it is formed, the boundaries, the types of businesses that can be included, as well as the types of items and activations that can be assessed. It would not be prudent to talk in a hypothetical way about how it works, we needed to understand the actual process.

    Fact: Did you know that even if we all agreed today to move forward with a WID, it would take approximately 18 months before the full funding came in?  Can we all survive another 18 months with the status quo?  This is why we were moving quickly to determine if a WID is the best solution for Sonoma County.

    Fact: Civitas was contracted on April 4, 2025 with a monthly fee of $7,500. When SCW reviewed the contract, we ensured that it was month-to-month so we could cancel it at any time.  This allowed the process to begin with learning how a WID works, then establishing a steering committee, beginning outreach to the AVAs and then broad outreach to the wine community before a management plan would be finalized or petition process started based on feedback.

    Fact: The first meetings with Sonoma County Vintners leadership to discuss a WID occurred on February 6th. Sonoma County Winegrowers and other wine industry stakeholders continued meeting with leadership of Sonoma County Vintners in March and April to discuss the WID and invite them to participate in the steering committee.

    Fact: May 14th, 2025 was the steering committee kick-off to explore WIDs. The steering committee was comprised of 15 members representing different size wineries, AVAs, and leadership roles in the wine community.

    • 5 small wineries
    • 2 mid-size wineries
    • 3 large wineries
    • SCW/SCV leadership (3 members from each board)
    • Current and Former AVA Board Leadership (AVW, WDCV, SVVGA, PGA, WSCV)
    • Staff

    Fact: Between May 13th – July 2, members of the steering committee met with the following AVA boards and/or leadership to discuss the WID and obtain initial feedback before going broader with wine community engagement:

    • Winegrowers of Dry Creek Valley
    • Alexander Valley Winegrowers
    • Petaluma Gap Winegrowers Alliance
    • Sonoma Valley Vintners & Growers Alliance
    • Russian River Valley Winegrowers
    • West Sonoma Coast Vintners

    Fact: At the June 2 board meeting, as captured in the minutes, there was a discussion on the timing of the Sonoma County Winegrowers “referendum” (a 5-year reauthorization process where growers vote on whether to continue self-assessing their grapes to fund collective marketing efforts).  By law, the referendum vote needs to happen between July 1, 2025- June 30th, 2026. The decision was made to “move as quickly as possible” with the reauthorization referendum after the start of the new FY on July 1, 2025. This reference to the referendum had nothing to do with the WID timing. There was separate discussion on the WID and its process and timing.

    Fact: On July 21st, Sonoma County Winegrowers distributed a press release announcing the exploration of a Wine Improvement District with the intent to begin outreach and start the town halls and listening sessions. The release mentioned support to explore a WID from the Sonoma County Vintners leadership who were participating in the steering committee (this had not gone to the full SCV board yet).

    Fact: To date, Sonoma County Winegrowers, with the approval of its board, has spent $38,450 on Civitas, which is less than 2% of its marketing budget and less than 1% of its total budget.

    Fact: Civitas does NOT take a 2% collection fee. There is a 2% collection fee taken by HdL if a WID is established. HdL is a separate and independent tax and assessment collection organization used by counties and cities across California (including Sonoma County) and for most wine and business improvement districts. There is a 2% processing fee for collecting the assessments. Since this is not a tax, it is not collected by Sonoma County.

    Fact: Sonoma County Winegrowers estimates that 30% of the Sonoma County winegrapes will not be sold this year and that there are around 5,000 acres of vineyards being pulled out. In general, the wine industry is experiencing an oversupply of grapes and a consumption problem.  Every day it seems there is a new report or media story about declining consumption, rising production costs and the impacts from tariffs.  Doing more of the same will not work.

    Fact: On August 19th, Sonoma County Winegrowers paused the work of Civitas and the WID through harvest to give Sonoma County Vintners a chance to deal with their transition and provide time for wineries around the county to brainstorm new ideas and funding models.

    Fact: As a leader of a countywide organization, it would have been irresponsible to not consider every possible funding model and opportunity to address the challenges facing the wine and grape growing community.

    At this critical time, let’s work together and have a dialogue on how best to improve the outlook for Sonoma County’s wine community.  Know that the Sonoma County Winegrowers has a very successful track record of supporting the Sonoma County wine community and its growers.  We led the effort to become the first 100% certified sustainable wine region.  We developed the first 100-year plan for the industry.  We have pioneered Sonoma County’s Farm of the Future to provide access to local vineyards to seek solutions to improve production agriculture.  And we established a Winery Collaborative and sought high-profile sports, trade, on-premise, and media partnerships to introduce Sonoma County wines to more people in new settings and experiences. We have also demonstrated that we pursue grants, partnerships, sponsorships, and now the WID as ways to supplement the investment Sonoma County grape growers make in the Commission. Every action we take and proposal we consider is done through a simple filter – will it help the growers and wineries in Sonoma County.  That will never change.