California North Coast wine businesses lean on cash amid uncertainty

in News

North Coast vintners and wine grape growers want more clarity about where costs and sales are headed in the months to come, according to bankers that serve the industry.

There’s a mixed bag of indicators. There are promising signs from reopened restaurants and tasting rooms from coronavirus pandemic restrictions, a big start to the rainy season after two years of drought as well as a dramatic turnaround from the grape and wine glut that loomed over the industry before the emergence of the virus.

But then there are disappointing developments such as the rise of more virulent viral strains like delta, a worsening of the labor shortage that predated the pandemic and the forecast for potentially a third year of drought.

As a result, companies have fallen back on the “cash is king” adage of recessionary corporate finance in the past 20 months, according to Rob McMillan, founder of Silicon Valley Bank’s premium wine division.

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