Silvertap/Free Flow Wines

The recession has spurred a boom in sales of wine by the glass, at restaurants like Out the Door on Bush Street in San Francisco

On a recent sunny afternoon in the Napa Valley, the good life was much in evidence. Shoppers strolled down the sidewalks of charming downtown St. Helena. Tourists filled patio tables outside the Bouchon Bakery in Yountville, nibbling on Thomas Keller’s famous French macarons. Waiters popped cork after cork at crowded restaurants.

Beneath this cheery facade, however, vineyards and wineries — the backbone of the local economy — are facing a challenging time.

Many factors are involved, but perhaps the most important comes down to this: glass vs. bottle.

When the recession hit, a growing number of cost-conscious American diners began buying wine by the glass, rather than by the bottle.

“Customers have been turning toward wine by the glass for several years, but in 2009, the shift was drastic,” Barbara Insel, president of Stonebridge Research Group in St. Helena, wrote in a new study. For her research, Insel’s group surveyed 50 top managers in the wine trade.

The concept of selling quality wines by the glass dates to 1987 as a way to persuade connoisseurs to try Napa’s Opus One red, which sold for $50 a bottle — very expensive for that time.

But today’s by-the-glass trend is driven not by producers, but by diners looking to save money. Buying less-expensive wines a glass at a time has pushed wine revenues in full-service restaurants down as much as 50 percent (dining revenues have dropped about 20 percent).

In response to the new per-glass reality, a growing number of restaurants have gone “alla spina” — serving wine from kegs — contributing further to the backlog of bottles at restaurants and distributors. The higher-priced wines sitting on the shelf that sold for around $90 had their prices slashed, and most new orders have been for less-expensive bottles selling for $40 to $60.

Wine sales have also declined in stores, down 15 percent to 20 percent in the spring of 2010 from the fall of 2008, according to the study. The drop has led to an inventory glut and a focus on carrying more commercially popular brands that cost under $20 a bottle.

These trends have affected California’s wine industry, which by some estimates accounts for 70 percent of all wine sold in the United States.

Because Napa is home to some of the nation’s highest-quality wines, especially cabernet sauvignons that once readily sold for $100 or more per bottle, the area has been especially hard hit.

Some winemakers are now producing fewer bottles in an effort to keep demand high, while others are producing more lower-priced wines.

Insel said some winemakers who had failed to adapt to the times were learning a tough lesson. “It’s easier to make wine than to sell it,” she said.

Still, some are prospering, even in the recession.

Katrina Kirkham, whose family owns Casa Nuestra Winery and Vineyards in St. Helena, said her business had avoided the shifting economic winds.

With its quirky tasting room decorated in Elvis memorabilia (Presley’s 1961 movie “Wild in the Country” was filmed on the property), Casa Nuestra is known for its Dry Chenin Blanc, a rare wine, bottling only 2,200 cases a year. “We’re sold out,” Kirkham said. “We never have enough.”

Having such a niche and selling wine almost exclusively on the premises has helped shelter the winery from plummeting retail store and restaurant pricing. The next batch of chenin blanc, arriving in March, will sell for about $30 a bottle, an upscale price for a white wine.

While the wine market remains challenging, the number of visitors to Napa’s wine country has stayed steady and tourism is “recovering more quickly than the rest of the country,” said Nancy Levenberg, chief executive and president of the St. Helena Chamber of Commerce.

Additionally, Mother Nature delivered a cooler-than-normal summer last year, which resulted in a modest grape crop, according to the crush report released last week by the California Department of Food and Agriculture. That is good news: a bumper crop would have flooded the market with grapes to further drive down prices and profits.

But not all is left to fate. As a way to improve business, trade associations are working to change laws in 10 states that currently prevent wine sales in grocery stores. Victory could mean new customers for Napa wines.

The outlook is decidedly mixed, but veteran winemakers say the wine business has never been quite as idyllic as it seems on the surface.

“There’s an old saying,” Kirkham said. “What’s the fastest way to a million dollars in the wine business? Start with two.”

This article also appears in the Bay Area edition of The New York Times.