I’m coming to you live from Sonoma California where I’ve been attending a small business mastermind event. Today we are talking about something that, on the surface, looks like agriculture and tourism, but underneath is a case study in economic gravity. This is the result of direct observation and conversation with people who are local to the market.

Northern California wine country, Napa and Sonoma in particular, has an aura of permanence. Rolling hills, tasting rooms, hospitality, luxury brands, and a global reputation built over decades. When something has that much cultural momentum, people assume it is immune to basic supply and demand. It is not.

Every business lives inside a box of four forces, supply, demand, capital cost and regulation. We’re not going to talk about capital cost today.

When supply expands faster than demand, prices compress. When regulation rises, costs increase and flexibility disappears. When all three move against you at once, even great operators can find themselves trapped.

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