Falling national wine sales and rising production costs are creating new challenges for Santa Barbara County vintners, AJ Fairbanks said at an EconAlliance luncheon Tuesday.

Fairbanks, estate director for Crown Point Vineyards and a member of the Santa Barbara Vintners board, was one of several speakers at the event held at the Santa Ynez Valley Marriott in Buellton. Other North County tourism leaders also presented updates, with identity emerging as a shared theme in how the region attracts and retains visitors.

“U.S. wine sales are down about 9% this year, and that’s a very real thing that’s going on,” Fairbanks told attendees.

He said a growing moderation movement is contributing to the slowdown, with many consumers cutting back on alcohol for health reasons.

“We’re at the lowest level of consumption, with 54% of the population saying they’re consuming, but now we see that 53% find alcohol to be harmful,” Fairbanks said.

The shift in consumer behavior comes as growers face rising production costs and shrinking margins, with some operating at about a 12% margin, a level he called unsustainable. 

“Now immediately you go, ‘Oh my gosh, the sky is falling.’ And it’s not,” Fairbanks said. “I’m actually seeing a very nice, healthy correction going on, and I know that sounds weird, but trust me it’s a positive thing.”

He said the correction is visible in the county’s vineyard footprint, which has dropped from about 22,500 bearing acres in 2016 to roughly 11,200 acres in 2023.

“This is a necessary correction we needed to go through because we are breeding ground for other large wineries just to come and poach really good fruit at a low price,” Fairbanks said.

With far less Santa Barbara fruit being blended into wines sold under the Central Coast moniker, he said local wineries have an opportunity to “define who we are” and break from a practice that “really gave us no identity.”

Tuesday’s luncheon also included updates from destination marketing organizations and representatives of two new regional attractions.

Visitor Patterns in Santa Ynez Valley

In the Santa Ynez Valley, Shelby Sim, president and CEO of Visit the Santa Ynez Valley, said lodging occupancy has remained steady at about 68% this year. 

“Notably, 80% of those visitors were day trippers while 20% chose to stay overnight,” he said, adding that winery visitation “only accounts for about 12% of our visitors.” He said most people come for food, the outdoors and the valley’s broader mix of activities.

James Bier, director of the Santa Ynez Chumash Museum and Cultural Center, said cultural tourism is “one of the fastest-growing global travel categories” and that tribally led destinations are among the most sought after.

He said the museum, which opened in May, was built as an immersive, story-driven experience intended to strengthen the region’s identity.

“What makes us unique is that our content is created, approved and shared through cultural authority and community voice, not external interpretation like most museums,” Bier said.

Tourism Updates in Santa Maria Valley

In Santa Maria, Michael Boyer, president and CEO of the Santa Maria Valley Chamber of Commerce, said construction on about 200 hotel rooms is expected to temporarily lower transient-occupancy tax revenue.

He said the region increased its Tourism Marketing District assessment to 2.5%, giving it a 20% boost in marketing funds to reach its key markets. 

“Our target markets are really San Francisco, Los Angeles and the Central Valley,” Boyer said.

Tourism in the region could see a boost next summer with the opening of the Planes of Fame Air Museum at the Santa Maria Airport. 

Jim Bray, the museum’s development director, said the main goal is to strengthen the area’s aviation history.

“I’d love to see it tie in with wine tours and whatnot,” he said, “and that’s something that, folks, we got to promote. We’ve got to make sure that people know about this museum.”