What is in this article?:
- California wine grape industry gaining strength
- Nitrates, farm labor
- California’s total shipments to the U.S. market in 2011 were 6 percent greater than the year before.
- California sold more packaged exports than ever thanks to a weak U.S. dollar and limited foreign supplies. But there were no incentives to move wine out of California in bulk.
- Four wineries — E&J Gallo, the Wine Group, Trinchero and Delicato — accounted for 75 percent of all the growth in the market last year.
Some number crunching brought good news to those who attended a round of grape grower tailgate meetings in California’s San Joaquin Valley, including word that the state’s total shipments to the U.S. market in 2011 were 6 percent greater than the year before.
That’s the highest it has been year-to-year since 2003, said Jeff Bitter, vice president for operations with Fresno-based Allied Grape Growers.
Those at the meetings also heard about ways to monitor use of nutrients that include nitrogen, which has become a focus for regulators because of nitrates in the state’s water supply. They were also reminded too much nitrogen can harm their crop.
Bitter said year-to-year increases have been in the 1 percent to 3 percent range. And data extrapolated from a Gromberg-Fredrikson report show the wine grape industry could be climbing out of the 2009-2010 recession.
“The real growth has come in shipments of bottles in the $3 to $7 [per bottle] and the $7 to $14 category,” Bitter said, pointing to increases of 9.2 percent and 8.3 percent respectively. Consumers remain price conscious, he said, adding that higher end wineries are providing a lot of new wine offerings in the $7-$14 range.
Wine at above $14 a bottle increased at 8.2 percent as well, but that was on a base of 25 million cases, compared to about 127 million cases for the lower cost wines.
Chardonnay shipments were up just 3.2 percent, but that amounted to a whopping 55 million cases.
Bitter said cabernet sauvignon rose at 6.2 percent and a challenge in that area will be supplying the market: “Can we get it on the shelf in the same quantity and at the same price?”
California sold more packaged exports than ever, Bitter said, thanks to a weak U.S. dollar and limited foreign supplies. But there were no incentives to move wine out of California in bulk.
On the other side of the coin, bulk imports were up by more than a quarter because of a need to supplement supply, Bitter said. But packaged imports were low.
And four wineries — E&J Gallo, the Wine Group, Trinchero and Delicato — accounted for 75 percent of all the growth in the market last year.
“The big boys are big and are getting bigger,” Bitter said.
E&J Gallo alone accounted for 28.6 percent of California wine shipments, with a 9 percent jump for the year, considered to be huge growth given its large base. Gallo has stepped up contracts for grapes in the state and expanded its capacity to handle them.
Gary Agajanian with Agajanian Vineyards, a grape and wine buyer in Madera, said “a few wineries dominate in the Central Valley and we need those guys.” But he also champions diversity.
“Now is the time to lock in prices,” Agajanian said. “Don’t take one year’s hot price. Think long term.”
Agajanian said many wines were discounted into the market last year as wineries “moved out a lot of inventory.”
Agajanian and Bitter were among speakers at the tailgate session at Bapu Farms in Madera. Other programs were presented in Visalia and Manteca.