I’ve Got Gas!

I finally paid more than $4.00 per gallon for gasoline. It happened this weekend, yesterday actually, early in the morning on my way to the golf course.

I didn’t see the price on the sign or the pump. I was just leaning against my car thinking what I needed to do later not to embarrass myself with my driver. Then I looked up and saw it: $4.11 for regular.

Now, I knew this was coming. Everyone knew. And the fact is I only paid a total of $1.69 more to fill of my car at this price than the last time I filled it up. Nevertheless, I was shocked. $4.00+ per gallon for gasoline!!

Did I care that I was paying an extra $1.69 to fill up my little car? No. What do I care. I spend more than that every day on my nightly dose of candy. It was the Idea that gas had reached this strange, arbitrary, $4.00 per gallon benchmark that I could not shake from my head. And I started thinking…

What does this mean to the wine industry that I’m shocked (and not a little disgruntled as well as fearful) about what amounts to an extra $1.69 per fill up? I think it means a lot.

I’m not about to suggest that the increasing price of gas has little effect on individuals and the economy. In fact, I’m sure it has the kind of monumental effect that I can’t even begin to calculate. However, just from the perspective of what it costs to get from here to there in our autos, the difference between $4.11 per gallon and $3.00 per gallon isn’t that much. In fact, the difference between me taking a road trip from Sonoma to LA and back at $3.00 per gallon and $4.11 per gallon is about $55.00. That cold hard amount isn’t about to deter me from taking the road trip.

But I’m betting the psychological difference that $4.00 per gallon represents is going to weigh on people’s minds this summer and in turn it will affect the wine industry.

The most immediate impact will be felt in tasting rooms. Here in Sonoma and Napa I suspect they’ll be seeing fewer people visiting from Kansas City, Los Angeles, New York, New Orleans and Rochester, and more people from Sacramento, Eureka, San Francisco, San Jose and Fresno. These visitors don’t stay for a week. They stay for a weekend. That means they don’t book as many hotel rooms, don’t visit as many restaurants and don’t visit as many wineries as the folks from Rochester, Minnesota.

Here in Sonoma Valley our economy is intimately linked to the tourism that the local wineries and the wine industry attract. Without them this little valley is side trip on the way to Sacramento, the ski slopes of Tahoe and the casinos of Reno. Without them, our population immediately falls by 35% and our economy is diminished even further. Housing prices crash. Many of the very cool food shops and restaurants are shuttered and replaced by Arby’s and "Quick Stops".

In other words, It would behoove the wine communities that thrive off attracting folks to their "bucolic wine country" to start increasing their marketing, to work harder to attract folks in the wake of the psychological impact that $4.00+/gallon will have, and to start thinking real hard how to get more "locals" (Californians), to take their vacation in wine country.

Now, I’m just spit-ball’in here, but perhaps now is the time for something that I believe is unprecedented: Maybe it’s time for Sonoma Valley and Napa Valley to do some Co-op Marketing.

THERE! I said it. I know. Heresy.

Napa and Sonoma working together to attract visitors rather than working alone to steal them from the other? People in either Valley are never more than a half hour away from the other Valley. Together, they represent the most extensive and impressive and intensive wine country experience perhaps in the World.

I have a feeling that the impact of $4.00 per gallon will have much more of an impact on people’s thinking than we might imagine and it’s going to take some out-of-the-box thinking to mitigate the damage.

Thinking about this whole situation gives me Gas!

9 Responses

  1. Morton Leslie - June 2, 2008

    Will the price of gas really affect the number of people who come to the Napa Valley to stay at Meadowood and buy $100 Cabernets? Will the 15% that plan a vacation from out of state knowing the price of hotels and restaurants in the wine country really think about gas prices? Or will it affect the person that just wants to take a drive on Sunday and taste some free wine? Local recreation generally involves driving as well. Given that something like 85% of the visitors to the Napa Valley are local from the Sac – Bay Area, maybe gas prices will lessen the bumper to bumper driving on weekends.
    Given the shocking price increases of everything at the supermarket, wine should look like a bargain to the consumer. Assuming the world is not going to import American wines over Australian, Chilean, or Argentine, what we need is a little monetary policy to bring down the cost of things. If the dollar was worth what it was in 2002 we would be paying $75 a barrel for oil, not $125. And less for everything else.

  2. Jack - June 2, 2008

    Stop your whining! Go to Europe where you’ll find our worthless dollar is worth .64 Euros…they were equal awhile back.
    And the price of a tank of gas? $120-$160.

  3. Alastair Bathgate - June 2, 2008

    To fill my car in the UK costs US$2.50 PER LITRE!
    I am wondering if I can run it on cheap wine!

  4. Philip James - June 2, 2008

    Beaten to it by a few Euro’s, but I was about to point out that if you want to see the future, turn to the UK, where its $10 per gallon, and people drive teensy tiny smart cars. The only SUV’s (known as 4WD in the UK) you ever see belong to the local farmers.
    Oh, our gallons are slightly larger than your gallons, but that only explains 20% of the difference.

  5. Thomas Pellechia - June 2, 2008

    An economic policy built on something more than tax cuts might make some difference, but the real problem is the weak dollar and the fact that our economy was largely built on oil being cheap and plentiful forever.
    Compared to Europe, the price of oil in America has been a bargain for decades, which is why we learned nothing from the mid and late 70s oil crises.
    As for wine and tourism: where I am, int he Finger Lakes, business owners are nervous. There wasn’t even a traffic jam on Memorial Day weekend.

  6. Amanda Lynn - June 3, 2008

    Those darn oil distributors. Another reason why we should be able to buy our oil direct and online, and cut out the greedy, slimy middle-man.

  7. Steve Heimoff - June 3, 2008

    I think it’s good that gas costs so much. It will force people to change their habits and leave a smaller carbon footprint. By the way, I paid $4.20 yesterday in Oakland for regular unleaded. Five bucks a gallon is just around the corner.

  8. el jefe - June 3, 2008

    Our Memorial Day was about the worst you could imagine weather-wise: cold and raining! But people came to visit and our sales were better than last year!
    And I am less shocked by gas prices than by what I have to pay for a regular hotel room in Napa when I need to stay over on business. Maybe the problem is not just gas prices…?

  9. Lake Tahoe Ski Bum - August 24, 2008

    I think the winerys should focus more marketing directly on the california ski resorts like Lake tahoe ski resort and such. People on those kind of vacations are going to want to come back during the season and take posh wine-focused trips.

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