Turrentine Brokerage.com

Bulk Wine. Grape Brokerage. Strategic Brands.

Steve Fredricks: Prowein Tradeshow Recap

Written by Steve Fredricks, President

Prowein in Dusseldorf, Germany continues to grow. In order to accommodate about 1,500 more wineries and countless more visitors, the show moved to a whole new set of buildings in the expansive Messe Center. Prowein is now being housed in 9 separate buildings each seems to be the size of the Sacramento Convention center, and all 9 are filled with wine producers from every region of the world. The scope is still overwhelming even after attending for a number of years now. For me to survive Prowein 2017 I will need some new shoes! The event affords me the opportunity to meet with most of our international clients and to get a face to face update on the bulk market from our strategic alliance partners from Europe, South America and Australia.

My take away from Prowein this year is the optimism of sellers; similar to the optimism of California wineries. Globally, wineries are excited about consumer trends above $10 per bottle in the United States and are working hard to try to sell more wine there. Wineries also continue to see positive market demand in the Scandinavian countries and parts of Asia. The optimism is not just buoyed by the consumer trends, but aided by lower bulk inventory levels and support of weaker currencies in Europe, Australia, and Chile vs. the US Dollar.

Europe’s bulk inventories are more in balance. Inventories of low priced generic and valued priced wine, which were a drag on the market the last few years, are down. It continues to be easier to find more commercially appealing and modern styles of wines from Bordeaux, Languedoc, central and southern Italy, and all of Spain can compete with new world style wines.

As the 2016 harvest finishes up in Australia, the end result is a crush with close to average yields per acre despite varying weather conditions and excessive heat at the end of harvest. According to our strategic partner Jim Moularadellis of Austwine, a crush with average yields per acre two years ago would have meant a surplus of wine compared to sales, but the removal of acres has brought bearing acres down to the same level as ten years ago. Export sales have also grown with the benefit of weak currency and the combination has resulted in stronger bulk prices and fewer liters actively for sale.

Jaime Lagos of San Nicolas Wine Services described a very challenging harvest in Argentina caused by very wet conditions. Bulk supplies are likely to be shorter for generic red and white and quality may be tougher to find. In talking with Eduardo Bentjerodt of San Nicolas Wine Services, the 2016 crop in Chile is just getting started for Sauvignon Blanc and projections for the crop are to be 10% to 15% below normal. The main red wine for color blending, Tintorerra, is in short supply and bulk prices have increased. The projections for Cabernet Sauvignon, Merlot, Pinot Noir, and Chardonnay are expected to be average in yields per acre and overall volume. There are still 2015 wines available and prices have firmed for Cabernet Sauvignon, Merlot and Chardonnay, but are still fairly attractive.

Give Turrentine a call if you are interested in any specific market information for bulk wines or strategic brand bottled wines. We have established relationships which can help source great quality wines from suppliers who can back it up with great customer service. I have already begun the search for my new shoes for Prowein next year.

Steve Fredricks, President

Steve Fredricks, President