Younger generations don't drink much wine. But Arizona’s wine industry is still growing

This weekend is the Verde Valley Wine Festival in Cottonwood, where local winemakers will showcase the initial fruits of their harvest — and hope to get some new generations interested in wine.

Gen Z is notorious for its lack of interest in wine. The Arizona Office of Tourism recently launched a new branding campaign aimed at the younger generations — complete with concerts, an app and influencers. It’s called Sips Different.

At the same time, the wine industry in Arizona continues to face barriers to growth, according to Michael Pierce. Pierce is the head winemaker at Bodega Pierce as well as assistant agent with the University of Arizona’s Cooperative Extension, which recently released a report that highlights just how expansive the Arizona wine industry has become.

The Show spoke with Pierce about the report, as well as Gen Z, distribution caps and how we compare to New Zealand’s massive wine machine. The conversation started with the UA’s new grape harvest report, the first since 2011.

Full conversation

MICHAEL PIERCE: It was super interesting to see the number of varieties, but then also how each of the growing regions, which over the years have kind of started to develop their own character, how you can kind of see it in the data. You see which varieties growers have chosen to grow there because we now have a track record of many years where we see what does well and what doesn’t.

You can also see where kind of the new growers — let’s call them the mavericks, like starting in different places like Kingman or even in kind of the eastern part of the state along the Mogollon Rim. They’re trying different things because they’re planting in different areas.

LAUREN GILGER: They’re growing grapes for wine now in Kingman?

MICHAEL PIERCE: Mm-hmm.

LAUREN GILGER: So this industry’s really expanding. Like, it sounds like it’s, it’s growing in ways that maybe you didn’t even predict.

MICHAEL PIERCE: I would say so, yeah. And, you know, as we are growing and planting more acres, generations are changing, so consumer preferences are changing, how people interact with wine are changing. So that’s part of looking at reports like this and just getting an objective feel for, you know, what’s doing well on the commercial side, because we can grow grapes in Arizona.

There’s a long list of varieties that do really well. Like our nice high elevation, our dry climate, it’s like kind of the perfect climate for wine grapes to grow. But that’s only a part of it. We now need to turn around and tell that story to people and get people excited.

LAUREN GILGER: OK. Well, talk about that in a moment. But I want to back up first and just talk a little bit about your path in Arizona wine, because you studied, right, wine and winemaking all over the world. You’ve been to New Zealand to do this, to Tasmania, is that right?

MICHAEL PIERCE: Yeah. I found out you could travel and make wine and I was in my 20s and I was like, "Yeah, that sounds great."

LAUREN GILGER: Let’s do that.

MICHAEL PIERCE: Yeah, get a storage unit and put all my stuff in there and buy the plane ticket and let’s go.

LAUREN GILGER: How different is growing wine in a kind of very established place like New Zealand or you went to Oregon as well, that kind of place where there’s been a wine industry for a long time. How different is that from what happens here in Arizona?

MICHAEL PIERCE: Well, fundamentally we’re still doing an ancient practice, you know, we’re doing what has been done for literally thousands of years before even recorded history. So it’s still winemaking at its heart. It was great to go see an established industry like in New Zealand. It was big. It was the biggest winery I’ve ever worked at and that one winery processes more grapes than all of Arizona combined.

However, the way their industry’s set up is there’s no direct to consumer. So some of that stuff that really works well for Arizona, like having people drive from Phoenix to us and tell our story, they don’t have access to that. Almost all of their wine gets shipped out of Auckland and it goes throughout the world. So it’s just a different approach. It’s more what I would call like a commodity wine where it’s going to be on the grocery store shelf. You’re not going to see that so much with Arizona.

Arizona, you’re going to see a handmade product that was, you know, in our case, it was literally grown by my retired parents, you know, as their retirement career. Grown by hand, picked by hand, I make all the wine myself, I have a full-time job, you know, we’re all Arizona natives.

So it’s just a very small batch kind of thing versus when you go to a big established region or even in the Willamette Valley, you know, we had thought of maybe, "Well, let’s we want to get into wine, let’s go up there and be a part of that scene." ... But we wouldn’t have been able to really have a mark on it. We would have been just following in other people’s footsteps. In Arizona, you can really tell your story and kind of have an impact with the growth on things. So I’m glad we were able to stay here.

LAUREN GILGER: Yeah. Low barrier to entry here, right? You’re the, you’re the trailblazers doing it. I mean, what do you think of the state of the Arizona wine industry? I feel like that’s a question I ask every time I talk to an Arizona winemaker every so often here on the show, but I mean it seems to have come a long way but lots will say, you know, it still has a long way to go.

MICHAEL PIERCE: Yep. Well, the wines are good. We’ve got the right climate to grow good wines. That’s not a question to me at all. And we’re starting to learn more about which varieties do well. You know, like everything, cost of goods are going up, so it’s hard for a small family business to bring in glass and corks and labels and all that stuff.

It’s become more difficult. You know, this we’re now going into our 16th vintage with Bodega Pierce. And it’s as far as the pricing and getting a product to the market as competitive as possible, it’s as hard as it’s ever been.

So I think that, going to be our struggle moving forward. I think what we’re going to be able to lean on is telling that story and really connecting with our customers because I think we’ve got so much more to add than those commodity wines that they can really just pick up anywhere.

LAUREN GILGER: So when you talk about what it looks like in New Zealand with this commodity wine vineyard that just ships out wine all the time, like are there things that need to happen or would have to happen policy-wise in Arizona to make that happen here? Like do you have to remain kind of local because of the way our system’s set up?

MICHAEL PIERCE: There’s a production cap, which is limiting and that production cap’s been in place for a long time, I believe about 2005. It’s 20,000 gallons effectively. So if you produce less than 20,000 gallons, you can do all the things I’m talking about, like having a wine club and sell direct to consumer and go sell my wine to the local restaurant that I really want to be at. I can do that. As soon as I go over 20,000 gallons, all those privileges go away. And that’s a huge barrier to growth.

Just as another precedent, the federal government has a small winery tax break and that is under 100,000 gallons. So we’ve got a really good case to say that while the federal government looks at that 100,000 gallon number, can we bump our state number up to that? And that would allow for that growth that’s been needed for a long time. And it’s just going to take time. We need to continue to educate our policymakers to get them to understand who we are and what we need for that growth.

LAUREN GILGER: Yeah. So that’s a, hurdle for sure. I know that the wine industry here has been looking at it for a long time like you said.

There’s also this sort of generational shift that you reference, like this idea that Gen Z’s not really drinking wine, drinking in general. I mean, how do you convince a new generation of people to not only to drink wine and be interested in it, the land it comes from, the story behind it, but to maybe make it like you kind of represent this new generation of winemakers in our state?

MICHAEL PIERCE: Well, I wish I knew that answer. It would make all of this so much easier. Well I think that younger generation, they’re really about authenticity. They want to know exactly where their wine is grown. They want to know exactly where their vegetables are grown or their meat is grown. And I think we can provide that.

So, I don’t completely subscribe to the idea that Gen Z’s don’t want to drink. They also have those challenges to cost of goods and just expendable income. So as they get older, they’re going to want to be able to share time with their friends and family and do all the same things that the older generations are doing.

So they’re facing some other barriers that I think keep them from attaching to wine so quickly. I think they will get there. They can get wine anywhere. I mean, just about any direction you go. You go sit down at a restaurant or go to a grocery store, you can find that. But what they can’t find is that connection to place that outlet to go and spend time with friends somewhere, go see another part of the state. So I think that’s going to be the important thing to really just rely on to get that younger generation.

LAUREN GILGER: Yeah. All right. Michael Pierce, head winemaker at Bodega Pierce, as well as assistant agent with the University of Arizona’s Cooperative Extension. Thank you for coming on the show. I appreciate it.

MICHAEL PIERCE: Thanks for having me.

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