What is in this article?:
- Grower prices below break-even point in all areas of California.
- Napa prices $2,700 per ton lower than what it cost to produce them.
- SJV grapes closest to economic sustainablity after 100,000 acres pulled out.
- Demand for California wine continues to grow as grape shortages loom.
DiBuduo’s sobering grower economic plight came at a Unified symposium that was readily upbeat because the economy is turning around and wine sales are following. The event drew a reported 12,000 to the Sacramento Convention Center for several days of programs and a trade show.
There was a more decidedly winery marketing bent this year with a lack of information from wine brokers offering an overall world picture of wine supplies. The past few symposiums have had a global perspective, since world surplus bulk wine supplies have a major impact on California grape sales. That was not part of the industry overview presentations nor was Jon Fredrikson of Gomberg, Fredrikson and Associates at the event, offering his insightful, overall marketing analysis of the industry.
While a moderate turnaround in higher priced wines is evident, the experts admitted that price conscious buyers are not returning to more expensive wines since they discovered quality in value-priced wines during the economic downturn.
Nevertheless, DiBuduo is optimistic at least for 2011 for several reasons:
• California wine sales continue to increase.
• The 2010 crop statewide was down 14 percent with a crop comparable to 2006-2009 crops. The Central and North Coast areas and Lodi-Clarksburg area were down 20 percent each. The Central Valley, the largest grape growing area in the state, with 1.6 million of the estimated 3.55 million tons crushed, was down 7 percent.
• Bulk wine imports are down. However, bottled imports are up.
• Plantings are continuing. However, the 14,000 to 17,000 acres planted last season are less than the year before. 65 percent of what was planted last season was red wine grapes; 35 percent white wine grapes. It was the opposite in 2009.
• Cabernet Sauvignon and Chardonnay continue to represent the biggest percentages of newly planted vineyards, according to nursery surveys. However, Muscat Alexander and Rubired (primarily for concentrate) shared healthy percentages of nursery sales.
• The domestic bulk wine market has strengthened, reflecting lower supplies to impact the grape market.
• North Coast wineries are looking for grapes now. For the past several times, the buying, if any, started at harvest.