What is in this article?:
- Allied Grape Growers lays out profitability roadmap
- Collective delusion
- Allied Grape Growers enjoys fruits of its labor
- Membership continues to rise, now at more than 600 growers
- California wine grape industry looks to increase market share
Allied Grape Growers Chairman Mathew Andrew of Madera speaks at the organization’s annual meeting in Fresno.
The old adage "we will sell no wine before it’s time" may have sounded good for an advertising campaign at one time. Yet conventional thinking and cautious patience will not propel organizations like the Fresno, Calif.-based Allied Grape Growers (AGG) and its 600 wine grape cooperative members towards more profitability.
Luckily for the members, they know this already.
Embracing change is not merely inevitable, but necessary for positive growth. Nat DiBuduo, AGG president and CEO, told members as much while highlighting some recent grape industry changes which are as good industry wide as for the co-op members.
For example, vineyard property values continue to rise. In some areas, values have more than doubled since 2000. Some prime Napa Valley vineyards now sell for $300,000 an acre while vineyards in the San Joaquin Valley (SJV) can sell for more than $20,000 an acre.
Even other crops, including almonds and pistachios which some grape growers also harvest as part of the agricultural portfolio, have increased two-to-three times in value during the same period.
“These are the kind of changes we like to hear about,” DiBuduo told nearly 300 cooperative members and industry representatives at a luncheon in Fresno in July.
Also noteworthy for the cooperative in the 13 years DiBuduo has been at the AGG helm:
- Membership is up 20 percent to more than 600;
- Total member acreage is up 80 percent to 45,000 acres;
- Harvested grape volumes are up more than 66 percent to 250,000 tons; and
- Overall value is up 208 percent to $105 million today.
Higher profitability in the grape industry has boosted plantings in recent years leading to record grape crushes. This has not always been the case for the California grape industry.
Since 1998, DiBuduo says roughly 180,000 acres of wine and table grapes were pulled from the ground due to poor economic conditions. Much of the acreage was converted to other permanent crops including almonds and pistachios, due to higher prices in recent years.
In the past three years, vineyards have returned, DiBuduo says, as prices have increased for quality grapes. Wine grape varieties including Rubired and Muscat Alexander have seen the greatest price returns to SJV growers, according to DiBuduo.
Much of this success is due in large part to changes made by wine makers over recent years that are attracting more wine consumers. Certainly, the availability and choices related to wine has improved for consumers in recent years, as evidenced by increasing shelf space in grocery stores and elsewhere for inexpensive and moderately-priced wines.
This will become important in the long-term as the U.S. is currently the largest wine consumer in the world. Key to this statistic, DiBuduo says, is America is increasing the number of wine consumers, rather than per-capita consumption.
Driving consumption are improvements in wine flavors.
“We’re seeing a lot of more consumer-friendly wines than we did in the past,” said DiBuduo. “They’re still making wines that the wine makers like, but not so much at the expense of the consumer.”
Sweeter Muscat wines and blends using Muscat Alexander grapes have benefitted greatly from increased acreages in the SJV, according to DiBuduo.