The wineries of Napa and Sonoma counties are an economic powerhouse for the region, employing more than 100,000 people and contributing more than $25 billion to the local economy. The Atlas and Tubbs fires have upended things, though, burning wineries, along with restaurants, hotels, and businesses, among other structures. It came at a bad time, as harvest concludes and production is underway.
Although many winery properties were spared, there are some that are partially damaged — torched vineyards or main houses, for example — and others are completely obliterated, setting back their owners for potentially years to come. Regardless, the outcome is tragic for an area that, according to a Napa Valley Visitor Industry report, brought in 3.5 million visitors who spent $1.9 billion and generated more than $80 million in tax revenue in 2016.
The devastating wildfires in Napa and Sonoma will have a huge impact on the state and the nation, too. After all, California is the world’s fourth-largest wine producer and accounts for 90 percent of the United States’ wine exports.
Insured losses are estimated in the billions, generally, but the business disruption for wineries, specifically, could mean losses are felt for years to come, according to CNBC.
From ‘A Total and Complete Loss’ to a Burnt Tractors
The Atlas fire destroyed more than 51,000 acres as of Wednesday, Oct. 18, but was more than 80 percent contained. The Tubbs fire has burned more than 36,000 acres and as of Oct. 18 was more than 90 percent contained. According to Wine Spectator, the fire destroyed at least eight vineyards. All told, 23 wineries — so far — have reportedly sustained damage to varying degrees.
One winery owner told Wine Spectator about the devastation his organic winery, Michael Mondavi Family Estate, experienced. A vineyard the company used for its popular Animo product was scorched such that there was 100 percent crop loss for the entire 2017 vintage.
“Our organic Atlas Peak vineyard had 95 percent burn-through,” Robert Michael Mondavi, Jr., told Wine Spectator. “We don’t use herbicides, we mow. So the stubble burned, causing damage to end posts and irrigation lines. A few spots had no burn and we tried crushing those grapes. However, it released so much aroma of smoke we had to stop.”
Sill Family Vineyards in the Atlas Peak district experienced mixed blessings, according to the Mercury News. Owner Igor Sill said his winery was a “total and complete loss,” but “amazingly the vineyards are untouched.”
The Hagafen Winery in Napa had opened by Wednesday, although it had only one visitor in its first two hours, according to SFGate. Its tasting room was mostly unscathed, but the business did lose one acre of its cabernet sauvignon vineyard, along with tractors, equipment and a chicken coop in the fire.
The Atlas fire scorched the estate and vineyards of the Patland Estate Vineyards off Soda Canyon Road in Napa, according to the Mercury News.
The Signorello Estate Vineyards in Napa were hit hard by wildfire: the winery and residence were destroyed, but according to the Mercury News article, proprietor Ray Signorello plans to rebuild.
Those whose vineyards did survive have faced another hazard: tainted grapes. Napa County Agricultural Commissioner Greg Clark has sent a notice to growers, saying that grapes that have come into contact with flame retardant from smoke in the air shouldn’t be harvested because they “are not safe for humans,” according to the Press Democrat.
Rising from the Ashes
Wineries hit by wildfire damage face a steep incline on the path to recovery, when one considers the time it takes to rebuild structures and replant vines, not to mention the insurance claims process. It’s a lengthy, costly process.
It could take five to seven years for vineyards destroyed by wildfire to have viable fruit again, according to a USA Today report. That doesn’t even factor in the production process afterward.
In addition to the cost of cleaning up a property, rebuilding structures, and other things, there’s the expense of replanting vineyards for those wineries that lost theirs: Between $15,000 and $25,000 per acre of vines, according to Quartz.
Faced with what could be millions of dollars in recovery expenses and losses, wineries are likely contemplating filing insurance claims, if they haven’t already.
Depending on the size of the winery, there could be coverage gaps that, when paired with the spike in rebuilding costs that naturally comes after a disaster, could spell trouble, according to CNBC. Insurance payouts might not be enough to fully pay for recovery.
The complication arises with how insurance covers different aspects of a winemaker’s property, vineyard insurance expert Tom Pagano told CNBC. Buildings on-site that have burned down are the easiest part of the claims process, he said. Contrast that with the complex arrangements governing the fields: crops are covered, but not vines, and policies often have restrictions on things like the character of grape spoilage because of electrical failures and not fires, Pagano told CNBC.
It could take years for the region to return to what it was once, as wineries, home and business owners, and local governments more comprehensively assess the causes of the wildfire and methods for recovery. But one thing is certain: This is a region of tight-knit family businesses poised to help each other get through a life-altering disaster.
Wine Country is a “place where business is fueled by parents handing down farming traditions to children, by neighbors lending each other equipment, by friends sharing bottles with friends. Napa and Sonoma may have worldwide renown, yet in many ways, they still feel like small farming towns,” SFGate says. “That sense of community helped vintners remain optimistic this week, even as they watched with horror as the fires grew, and as many lost their own homes.”
Was Your Business Damaged or Destroyed?
If your business was damaged or destroyed by the North Bay wildfires, contact us today to learn more about your legal options.