California Wineries Hiring Despite Hurdles of Fire Recovery

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By Genevieve Douglas and Joyce E. Cutler

Northern California wineries recovering from devastating wildfires last fall are finding themselves ready to hire despite a tourism slump that could slow efforts to rebuild.

Although tourists may be holding off on their wine country vacations, wineries for the most part are back up and running, and some are even hiring, representatives told Bloomberg Law. This is in large part due to being spared from the fires’ most devastating destruction. In 2016, the California wine industry employed approximately 786,000 people and generated $114 billion in annual economic activity, according to data from the Wine Institute.

Treasury Wine Estates, an Australia-based group that owns Berringer, Beaulieu Vineyard, and Stag’s Leap, among other wineries, had minimal or no damage to its properties, spokesman Brent Dodd told Bloomberg Law Jan. 31. “Additionally, you will see from our latest interim results, Treasury is growing and we are hiring!” Dodd said in an email. “We have seen a slight decline in visitors over the last few months but, we have a dedicated marketing team that focuses on driving traffic to our tasting rooms and websites.”

E.J. Gallo likewise is hiring, a representative for the world’s largest winery said in a Feb. 1 email to Bloomberg Law. The privately held company, with 90 brands, has job fairs scheduled for this spring and summer in Napa and Sonoma counties.

Wineries that will need to rebuild, however, are experiencing delays and challenges related to insurance claims and available construction labor and resources. Wineries, businesses, and homes will likely be competing for resources in the impending construction boom following the fires.

Calling All Wine Lovers

The fires raged in October, a month that’s typically high-grossing for wineries and the hotels, retail, and other businesses that rely on winery-related tourism. In addition to the initial lost revenue, establishments are now working overtime to combat the impression that Napa, Sonoma, and surrounding areas are burnt to the ground.

Wineries alone are reporting about a 35 percent drop in business, Nina Small, regional chair of the North Bay for the Next Concept Human Resources Association, told Bloomberg Law Jan. 31.

“Even though Rutherford is as beautiful as ever, there is a perception out there that it’s all burnt down,” Stephanie Honig, spokeswoman for the family-owned Honig Winery in the Napa Valley town of Rutherford, told Bloomberg Law in a Jan. 31 email. “Our challenge with the employees right now is finding projects to maximize their time to keep them busy until visitors realize it’s time to come back!”

“The whole industry is working to get people to come back to visit our wine country,” Gladys Horiuchi, Wine Institute media relations director, told Bloomberg Law Jan. 31. Local businesses are working with the California tourism board to allocate additional resources to give tourism a boost to the areas affected, she said.

“September and October are both our highest seasonal months, and December and January are traditionally lower,” Catherine Heywood, Visit Napa Valley operations director, told Bloomberg Law Jan. 31. “So our businesses anticipated a slowdown for December and January. It just came a lot sooner.”

Insurance, Construction Needs

Last year’s fires prompted nearly $12 billion in insurance claims, California Insurance Commissioner Dave Jones (D) said Jan. 31. Insurers received nearly 45,000 claims totaling more than $11.79 billion in losses from the wildfires that burned across the state in October and December. More than 32,000 homes and 4,300 businesses were damaged or destroyed.

In addition to the widespread damage, many businesses and homeowners are learning that they were underinsured, Small said. “The effect of the fire remains tough on every individual who lived through it,” she said.

A silver lining, however, could be the booming construction industry that rises from the ashes. “The big picture is that the dollar volume of damage is gigantic relative to the annual construction economy in Sonoma County and the North Bay in general,” Scott Littlehale, Northern California Carpenters Regional Council senior research analyst, said Feb. 1.

Construction GDP in Napa and Sonoma for 2016 was $2.7 billion per the U.S. Bureau of Economic Analysis, Littlehale said in a follow-up email. Sonoma County’s gross output for 2016 was $5.2 billion. “Rebuilding the North Bay will be like committing two full years’ worth of total North Bay construction activity solely toward replacing the structures destroyed or damaged in the fires,” he told Bloomberg Law.

Hurdles will likely pop up, however. Total construction employment in the North San Francisco Bay was 25,500 in 2016, and a considerable portion of the existing North Bay construction workforce travels to other Bay Area counties to work, he said.

“It will be an enormous challenge for residential building contractors, who typically make little direct investment in construction workforce development and who offer pay that is on average 30 percent lower than nonresidential construction pay, to ramp up construction worker employment quickly to fill that need,” Littlehale said. “Homebuilders’ past strategies will need to be discarded and replaced.”

To contact the reporters on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com; Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com

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