After two consecutive years of light grape crops, and a dry start to the 2012 growing season, a standing room crowd of 2,200 packed the Hyatt Regency Ballroom on Tuesday morning to mull the state of the wine industry at the Unified Wine & Grape Symposium.

On the upside, attendees learned the overall domestic wine market posted positive gains last year. U.S. wine shipments rose to 345 million cases in 2011, a 4.4 percent increase over 2010.

Now comes the tough part: Keeping up with consumer demand. Inventories of bulk wine remain at an 11-year low, due to a string of smaller-than-expected harvests and a shift by some California farmers to other crops.

According to Allied Grape Growers, a Fresno-based grape growers association, 3.25 million tons of grapes were crushed statewide in 2011, a 10.4 percent drop from the previous year. Locally, the Lodi/Clarksburg area crop was off 5.2 percent with 670,000 tons of grapes crushed in 2011. On California's Central Coast, grape crops were down a whopping 34.3 percent.

"It was not our worst year, but it wasn't our best year," said Nat DiBuduo, president of Allied Grape Growers.

While DiBuduo characterized inventory supply and demand as currently balanced, he warned that the wine industry may be on the cusp of entering a shortage. The threat of an overall dry growing season this year, or late season rains that can damage crops as they did in 2011, would exacerbate the situation. Early vineyard studies already show the 2012 harvest is on track for another year of light crops.

"I'm getting real anxious," said DiBuduo. "The lack of rain worries me. I'm telling growers to be irrigating, and be irrigating heavy."

Steve Fredericks of Turrentine Brokerage, a Novato-based brokerage firm that studies wine industry supply trends, echoed the idea that the industry is facing an "emerging shortage." Inventories are at their lowest levels in 11 years, which is causing wine prices to rise.

"Grape prices are up," said Fredricks. "That effect's already been there and is transitioning to the consumer."

The rapid increase in popularity for moscato and dessert wines was a sweet spot for domestic wine producers in 2011. Consumer data also showed a sweet tooth for chocolate-infused wines, flavored sakes and ciders.

Allied Grape Growers predicts that plantings of moscato, a grape that produces a sweet white wine and grows well in the Central Valley, are expected to increase 136 percent by 2015. A 2011 survey of California nurseries also showed that nearly 25 percent of sales by wine variety were for moscato.

Moscato has captured a particularly strong audience with fans of rap and pop music, who've heard such artists as Drake and Kanye West name-check moscato in songs, along with older drinkers.

"The 'echoboomers' and the 'millennials' (the generations of Americans born between 1980 and the mid-1990s) are both trying it and influencing each other," said Jon Fredrikson of Gomberg, Fredrikson & Associates, a Bay Area wine industry consultant and research firm. "This is the way white zinfandel started. What we don't know is if moscato is going to be another significant white wine or something else."

Attendees at the conference received copies of Wine Business Monthly, which listed Bogle Vineyards of Clarksburg as the No. 15 winery in its Top 30 list of the largest American wine producers. Bogle Vineyards ships 1.2 million cases annually, with production expected to grow given its new facility in Clarksburg. According to Nielsen Premium Wine Scan data, Bogle's pinot noir, priced around $10, received the fifth largest revenue increase of all pinot noirs sold in food stores in 2011.

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