The once-gloomy market for California’s North Coast wine grapes continues to improve — and none too soon for growers.
The prices for premium wine grapes followed the downward spiral of the economy that began in 2008, and it wasn’t until early this year that they began reversing direction. That was after wineries had reduced product prices to whittle away the backlog of unsold case goods that had built up following several years of large crops and faltering demand from recession-battered consumers.
“Most wineries have dealt with their excess inventories and, price-wise, growers should be pretty happy this year,” says Brian Hendrix, co-owner of H&H Wine Brokerage, Napa, Calif. “Prices have been healthy and demand has been better than in the past two years.”
Among the varieties benefiting the most from the market turn-around, he says, are Cabernet Sauvignon and to a lesser extent, Zinfandel. For example, last year, Napa Valley Cabernet grapes were selling in the $1,500 to $3,500 a ton range, Hendrix notes. This year, average spot market prices for that varietal have rebounded to $3,500 to $5,000 per ton.
He estimates contract prices being offered to North Coast growers this season in the range of around $1,000 to $8,000 per ton for Cabernet Sauvignon. “We’ve had prices as high as $8,500 per ton for extremely premium location grapes,” he says.
Central Valley growers have also seen the price of their wine grapes go up this year by about 25 percent, Hendrix says. Last year, Cabernet Sauvignon south of Lodi was going for about $400 a ton. This year, prices have risen to around the $500-per-ton level. Meanwhile, any increase in demand for premium-priced wines remains stalled.
“We’re not seeing as much movement as we’d like for bottles priced above $20,” he says.
Earlier this season North Coast growers were challenged by unusually cool, wet weather, including rains during the time vines were flowering. In some areas, vineyards suffered significant damage from weather-related problems. But, prospects for this year’s crop looked encouraging at the start of August.
“The vines look healthy, temperatures have warmed up and things are moving along pretty well,” Hendrix says. “We don’t have a good read on berry size yet — in fact, many growers haven’t even gone out to count clusters. Right now, the Chardonnay and Pinot Noir crops look light. But, there’s still a lot of growing season left.”
Like last year, when some Napa Valley growers were still picking grapes Nov. 15, Hendrix is looking for a late start to this year’s harvest due to the unfavorable spring weather, which has pushed some buyers to the market sidelines for now.
“They’re not sure how the crop will ripen,” he says. “There’s still a lot of bidding for grapes, and we’ll just have to wait to see where everything ends up.”