Madison Aument
For 91.9 KVCR News, I'm Madison Aument and this is Economics IE. Temecula Valley has some 50 wineries that attract locals and tourists alike, but now several winery owners are in the market to sell. Pat Maio is a reporter with the Orange County Register, who's reported on the wave of people looking to get out of the Temecula wine business. Well, thank you for being here. So Temecula’s wine country is a boon for the region's economy. I'm just wondering how much money these wineries bring to the region?
Pat Maio
Well,they have an economic impact of about two and a half, $2.7 billion in the region. It's pretty substantial. And, you know, the arm of the region reaches pretty far, you know, into the coastal areas of California and Southern California here. Yeah, there's roughly what 93 I saw varying numbers, but there's 93 combined vineyard and winery operations.
Madison Aument
Wow. Well, despite it being good for the local economy, it seems like the financial burden for these wine winery owners is pretty immense. What did you hear from the people you talked to?
Pat Maio
It was interesting. You know, what kind of got me into the story initially, was Bella Vista, you know, it's the oldest winery in the area. Started back in 1968 and it was purchased by a company called some percent winery… Kurt Tiedt… who runs an investment group that is actually not only buying Bella Vista now, which would be a second, but he told me he might be looking for more to buy. But what's happening is that people are getting old. You know, a lot of these wineries that were down in the Temecula Valley area were begun, you know, starting in the late 60s with Bella Vista, and then running through the 70s and 80s, even, of course, others have started since then. But you know, now you what you're seeing is some mega operations come into the valley, and it's kind of putting a squeeze on things, you know, because there's resorts, you know, with the smaller wineries that have been there a long time, family run, you know, they can't compete against that. So what's happening is a lot of these older people, we'll call them baby boomers, you know, are, you know, they're all in their late 60s, early 70s even. And you know, they're wanting to sell. And, you know, there's plenty of people out there that want to buy, but things got kind of held up during the election season here, because people didn't really know which way or what direction the economy was headed.
Madison Aument
Yeah, what really pulled me into this story was this baby boomer aspect of it. Can you talk a little bit more about why these baby boomer winery owners are trying to get out of the game?
Pat Maio
Well, one they're old, you know, I've heard words like, I'm tired, you know, it's a lot of time, and, you know, their bones are aching. And, you know, it's not the glamorous job that a lot of people think it is. That's kind of what I was told, you know. But a lot of them said they're tired, you know. And of course, you know, they're in their late 60s or 70s, even. So yeah, that's kind of why they're getting out. And plus, it's hard to make money, and they're not as wealthy as one might think, although there's a lot of love I think, that they have for the industry.
Madison Aument
Looking forward now that election season has settled, what in your reporting do you think is going to happen with Temecula wine country?
Pat Maio
Well, there, there was a gentleman I interviewed who with kind of an, I'll call it an exit strategy group, Consulting Group, which is advising, you know, transactional, you know, mergers and acquisitions by others, and I think it's going to start picking up, you know, because some of the uncertainty about the election is behind us now. It's a lucrative industry for Temecula, but, you know, there's a lot of expenses that these smaller family operators have to, you know, fork out in order to keep things going. So I think probably after the first I mean, if I were speculating, and I don't know this to be certain, but from what I was hearing, is what you might see is after the beginning of the year, some of these wineries might actually be sold. I know in one case, there will probably be one sold before the end of the year, and that's the one that slipped into bankruptcy, Avensole, all which is just a beautiful piece of property off of Rancho California. I think what you're going to see is just kind of a pickup and purchases of these wineries after the first of the year.
Madison Aument
Well, Pat. Thank you for your time.
Pat Maio
Thank you. I appreciate it.
Madison Aument
Join us again next Monday for Economics IE. You can find this segment and a link to Pat's story at kvcrnews.org/econie. Support for this segment comes from the Nowak family. For KVCR News, I'm Madison Aument.