NAPA VALLEY, CA — Mentions of wine in wine country are most likely to get a furrowed brow, a sigh, and predictions that the future holds only pain for anyone with a vineyard.
In contrast, economist Christopher Thornberg told a Napa audience that data is painting a brighter picture — especially for Napa County and its wine industry — than the stories most people are hearing.
“If you want to think about the economy, there are two things you need to be looking at,” Thornberg said Nov. 6 at the Napa Chamber of Commerce Economic Outlook Conference, the Napa Valley Register reported. One is the data he sees daily and the social narrative.
Thornberg is a founding partner of Beacon Economics, a research and consulting firm. From 2015 to 2023, Thornberg was director of the U.C. Riverside School of Business Center for Economic Forecasting and Development. He became a “housing-bubble hero” for his warnings of an impending housing market crash. However, his rosy outlook for Napa did not sit well with everyone, including young people who said they don’t feel Napa will have jobs or housing to offer them—if they could afford to stay in the first place.
Thornberg said Napa County continues to outperform many parts of California. The wine industry at large is essentially healthy but is showing signs of correcting for overproduction. Manufacturing, leisure, and hospitality are still doing well over the course of last year, and unemployment remains low, according to Thornberg.
According to Thornberg, annual wine consumption in the U.S. has dropped a bit, from about 3.2 to 2.5 gallons per resident. But he said that data show that wine consumption, in price-adjusted terms, is actually growing, not falling. Of the three major categories of alcohol — beer, spirits, and wine — the latter has seen the biggest real growth over the course of the last couple of years, and alcohol spending is up again.
“Yes, there’s been a pullback in the grape crush over the last couple of years,” he said. But, he added, the biggest declines have come from the Central Valley, not Napa Valley.”
Looking at grape prices, despite the overall decline in crush, prices continue to rise on average, according to Thornberg.
Thornberg narrowed in on a correction to overproduction, rather than a wholesale cataclysm. The wine industry is still doing well, he said, but the supply may be “a bit too much.”
Local officials, workforce experts, and students challenged the rosy picture, arguing that housing shortages, shifting labor markets, and affordability pressures are creating cracks in the foundation.
On a panel of middle, high, and postsecondary school students, Vintage High School junior Helen Heffner noted a disconnect between regional wealth and lived experience, the Press Democrat reported.
“It’s great being told we live in a prosperous region, but it doesn’t always feel accessible to us,” a student said. “Sometimes it’s like the numbers are describing someone else’s life.”
Although they might disagree with some of Thornberg’s arguments — the minimum wage, for example, is not a good economic move — housing appeared to provide a common ground.
The best step forward, Thornberg said, is housing. The solution to most of Napa’s issues is very simple, he said. “You need a lot of apartments,” he said. “Build housing. It is the single most important thing you can do to continue to make Napa a successful community, period.”
The Press Democrat and Napa Valley Register contributed to this report.
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