What is the Future of Arizona Wine?

Carlson Creek has been involved in the Arizona Wine Industry for two decades. We were the 17th winery license in the state. Carlson Creek has been founding members of many of the organizations that have helped form the industry and held leadership positions in those that predated us. We built the third largest vineyard in the state, survived a pandemic and won plenty of awards. Through all that we have witnessed a lot of change.

With that experience, we can to speculate on the question: Where Is Arizona Wine Headed in the Next Decade?

How will water affect Arizona Wine?

First and foremost the topic that determines everything in Arizona, water. Grapevines are low water use crops but not low enough for dry farming in Arizona. Dry farming relies on rainfall and we have been getting less and less of it. People are saying the term ‘nonsoon’ more frequently of late¹. It is what it sounds like, a monsoon season with little rain. These rains are deluges bringing the majority of the water for the year. It is the only true source for ground water replenishment.

The diminishing water source combined with over pumping has exacerbated the issue in Willcox. There is no help from canal projects as the majority of vineyards in the state do not rely on Colorado River water. Which, given the crisis it is currently undergoing, may be fortunate. 

An old timer once said, “in Arizona whiskey is for drinking, water is for fighting.” He was not kidding. He had seen state water agents be shot at when trying to enforce new water regulations in 1980. Since that time little new water regulations have been put into place until just the last couple of years. 

Regulation: We are from the government and we are here to help

Willcox is now in an Active Management Area². This is the same regulatory framework that covers much of the population centers in Arizona, such as Phoenix and Tucson. Prior to this a farm could drill as deep as they wanted and pump as much water as they needed. The problem is that Willcox is a closed basin, no rivers in, no rivers out. It recharges by rain and snowmelt from the mountains that encircle it.  With unlimited pumping the drawdown has exceeded that water source³. 

The reaction has been to freeze agriculture expansion. Here is the rub, Willcox is the source of 80% of Arizona’s wine grapes⁴. Most vineyards, including Carlson Creek, own land that they had planned to expand in coming years. The regulation effectively stops growth for the majority of Arizona vineyards. Which in turn, slows the growth of the industry as a whole. Growth is essential, growth attracts new talent, new investment, and new consumers. Stagnation is death.

This is not a death knell though. There are people working very hard to create an exemption for low water use, high value crops, like wine grapes. A ton of pecans uses eight times the water of a ton of Cabernet Sauvignon⁵. Also, Willcox is not the only wine region. Land once ignored is coming into production in the Verde Valley, and is seeing excellent yields. Lesser known regions are beginning to attract attention. Any way you slice it, water is the major limiting factor to growth in the Arizona wine industry.

Is Climate Change affecting Arizona Wine?

Across all regions there has been a shift in climate beyond the water issue. The winter before our first harvest it snowed often and there was ice in the vine rows. Since then every winter has been milder. The summers are harsher. Willcox, Sonoita and the Verde valley are still respites from the heat of the cities. But the effects are there. Arizona wine growers are already having to rethink the grapes they grow, how they grow them and where they grow them. Explore this topic deeper in: Can Arizona Wine Survive Climate Change?

The warmer it gets the faster the harvest comes and the more difficult it can become logistically, horticulturally, and oenologically. We share labor for harvest across numerous vineyards. We ourselves harvest for several other vineyards. Fast harvest means resources are not as easily shared, and that can create difficulties hitting optimal ripeness. Some people will have to wait and that can damage their wines. It could mean that some grapes won’t get picked at all.

Hitting a moving target

All this makes winemaking more difficult. Slow ripening is better. Imagine you are shooting at a moving target. The target crosses you left to right. The slower target is easy to hit. That pace makes it far easier to get near perfect numbers. But if it is fast then misses are far more likely. During a good monsoon the numbers do not just stop, they go backwards. They will stall for days at a time. Granted that creates its own challenges of muddy vineyards that can trap large tractors, diluted grape juice, and the potential for rot. But you have time to turn over tanks, finish other ferments, and plan for the next pick. To find out more about how climate changes the grape harvest window read our article: Wine Grape Harvest Timing in Arizona.

Are Americans drinking less wine?

Climate is not the only overarching change, wine consumers are undergoing huge shifts. Wine consumption in America has been growing consistently for 50 years. That has been in line with population growth. Birth rates are down and due to political concerns beyond the scope of this piece immigration is following birth rates. As population growth slows, so does the market’s base growth. We have basically had a free economic ride that is now slowing. This will change in the future of Arizona wine.

The makeup of the market has changed as well. The boomer generation, a cornerstone wine consumer, is aging out, and consuming less and cheaper wine as they downsize. Gen X being a smaller generation would have to drink far more to compensate. Millennials are far less wealthy than their parents at this stage of life and thus are not drinking premium wines at the rate expected years ago. Gen Z is not drinking alcohol in the numbers that other generations have.

This leads to a conundrum, we will have less wealthy and fewer consumers to sell to. Add to this the recognition that the French paradox that the boomers swore by was just a flight of fancy. GLP-1s are reducing that appetite for all things including alcohol.⁶ Plus an inflation landscape that makes all the inputs and thus the final product more expensive and the marketplace looks more like a battlefield.

What does the future hold for Arizona wine?

That is just what the future of Arizona wine is, a battle on multiple fronts. A fight for consumers against massive wine companies that are desperately trying to hoard market share, a fight to maintain our water rights, and the fight to continue to farm in an environment that is challenging our long standing agricultural traditions. This fight is not one against all, it is fought with the help of our friends and neighbors. 

Those who help us in this fight see the value in a local wine industry in their grocery aisles, their restaurants and on their tables. We have stalwart allies in the halls of our legislature. We have customers who have been involved with the industry since before most of our staff was born.  There is a generation of wine drinkers who care what goes into their wine, and how far it has to travel to get to them. The next ten years it will be this group of people who will shape the industry as much as the regulation, climate, and water.  They will vote with every visit, every online interaction, and ultimately with every purchase. The conversation is wide open, happening every day.  In a decade Arizona Wine will be stronger, if for no other reason than the fact that it is part of that conversation.

Cheers,

The Carlson Creek Team