- Joseph Gallo, president and CEO of the E&J Gallo Winery, brought bullish reassurance to California wine grape growers: “This year we have already signed 10,000 acres of long term contracts for grapes."
- Gallo said the market for U.S. wine could double in the next decade.
- Gallo has a plan to avoid importing bulk wine from foreign suppliers, pointing to what he said was “an astounding number” — the equivalent of 300,000 tons of grapes imported as bulk wine in 2010.
Gallo cited a growth in U.S. wine sales of 6 percent, pointed to growing numbers of people coming of age daily and talked of the prospect of growing the per capita consumption of wine by those in the United States. It’s now low by comparison with others, registering 9 liters in the U.S., 20 in the United Kingdom, 23 in Australia, 24 in Germany, 42 in Italy and 45 in France.
Citing the rising domestic demand, he pointed out that 84 percent of U.S. wine is sold domestically, compared to 16 percent that is exported.
That’s in sharp contrast to some of the crops vying for farmland in California, notably nut crops. Gallo rattled off some statistics on those: California almonds have grown to a 1.5 billion pound crop today, and 70 percent of the crop is exported; walnuts have grown from 350 million pounds, and 70 percent of that crop is also exported; and pistachios are above 300 million pounds, with 63 percent of production going abroad.
While Gallo talked of the promise of a burgeoning middle class in developing countries and the prospect of added exports, he cautioned that the global picture could change if unrest and instability enters the picture.
He questioned whether such turmoil could imperil what he called “a tree crop bubble,” again emphasizing an inability to predict the future. He had previously referred to other “bubbles” that included challenging economic times: “the Roaring 20s that lasted seven years; the high tech bubble, 10 years; and the housing bubble, 8 years.”
At the conclusion of Gallo’s talk, Nat DiBuduo, president and CEO of Allied Grape Growers, a marketing association representing about 600 members throughout California, brought a chuckle from audience as he said, “We’re looking forward to the expansion and looking forward to more planting contracts and good prices.”
Earlier, DiBuduo had shown his own bullishness on wine grapes, particularly in the Valley where “we’re selling into price points the consumer wants. But we have to maintain quality, we can’t get greedy.”
DiBuduo said inventories for grapes are short, especially for lower priced wines, and “there weren’t enough grapes planted since 2005 to satisfy current demand.” His presentation was posted at www.alliedgrapegrowers.org.
It shows significantly higher prices paid for many varieties of grapes grown in 2011, compared to 2002, and prices higher as well when 2011 is compared to 2010. That held true in District 13 (Fresno/Madera) and District 12 (Manteca/Modesto).
DiBuduo showed a film that was made a few years ago that showed vines being bulldozed out and burned while a singer sang, “You better kiss me cause you’re gonna miss me when I’m gone.”
“We’re not recommending any more pullouts,” DiBuduo said.
This year’s wine grape crush is estimated at 3.25 million tons.