Despite slumping sales at restaurants, the California wine industry appears to be growing through the economic downturn.

Retail and direct-to-consumer wine sales are making up for slower business in the struggling restaurant sector, said Robert Smiley, a wine-business expert at the University of California, Davis, who released the results of his annual report on the industry at a conference in Napa on Tuesday.

Smiley also reported that while wine sales likely will continue to grow, the state's vineyards probably won't keep pace, leading many industry experts to forecast that demand from California wineries will soon significantly outstrip the state's supply of most major grape varietals. That's likely to boost the prices grape growers get for their crop and could raise prices slightly for consumers.

For the study, Smiley interviewed 28 wine-industry executives and, in addition, conducted a written survey of 73 wineries and vineyard operations around the state.

In the restaurant sector, Smiley said, sales are down most steeply for high-end bottles. That's likely to hurt boutique Napa and Sonoma wineries, some of which do more than 80 percent of their business through restaurants, he said.

But wineries that make moderately priced wines – retailing in the $10 to $14 range – may actually be benefiting from the downturn, as drinkers trade down in restaurants or skip going out altogether.

"The good news is that people that don't eat out tend to drink at home," Smiley said.

At Bogle Vineyards in Clarksburg, sales manager James Eichel said his company's restaurant business isn't growing as quickly as it has in recent years, but retail sales are as strong as ever.Bogle is on track to sell at least 10 percent more wine overall this year than it did in 2007, Eichel said.

At local high-end restaurants, wine managers said they've seen demand fall off, particularly for the most expensive bottles on their wine lists. Many customers appear to be shifting to midpriced bottles, particularly from well-regarded Sacramento-region winemakers.

Another trend: More and more customers are bringing their own bottles.

"I just looked at sales for the last three weeks, and I was shocked at how many corkages there were," said Stacy Paragary, operations manager for the Sacramento-based Paragary Restaurant Group. She estimates corkages, for which her company's restaurants charge $10 to $20, are up about 30 percent over the past few months.

Particularly for expensive wines, restaurants often make less on a corkage fee than on a bottle from the house cellar.

At Hawks restaurant in Granite Bay, wine director Kevin Tyson said more and more of his customers are bringing their own wine. Hawks management recently decided to raise the restaurant's corkage fee from $20 to $25, Tyson said.

"Corkage was really meant to be, 'If you have something special, bring it in.' But we realized that when you have a table of eight bringing in seven bottles of wine, it's no longer about the wine being unique," he said. "It's about saving money."

At the other end of the wine supply chain – the state's vineyards – grape growers are hoping that continued growth in wine sales will drink up the last of the surplus production that has bedeviled their industry for several years.

Vineyard acreage exploded in the mid-1990s, but expansion has since slowed to a crawl. In a market that at times has overflowed with wine, grape prices have stagnated, while farming costs – land, fuel, labor and chemicals – have all risen.

Call The Bee's Jim Downing, (916) 321-1065.