North Coast Bulk Wine Market Overview
Written by Marc Cuneo & Steve Robertson
Napa: There continues to be strong demand for Napa Valley Cabernet Sauvignon, however we observed some slowing as harvest approached. More 2013 bulk wine could arrive on market post-harvest. Highest quality or best value lots are receiving the most interest from potential buyers. We still have active buyers looking for wine; recent sales have been in the $28 to $30 per gallon range.
Sonoma/North Coast: This area has the strongest demand in the state for quality and value. There are low quantities of Cabernet Sauvignon available and we are not predicting large gallons to become available after harvest. The 2014 crop will most likely not bring many extra gallons to the bulk wine market either. Excess in the rest of the state for Cabernet Sauvignon is the only factor that could soften price or demand. Even though there aren’t many gallons for sale, new buyers continue to enter the market looking to fill Sonoma County Cabernet Sauvignon programs. Recent sales have been in the $15 to $17 per gallon range for Lake and Mendocino and $20 to $22 for Sonoma County.
Pinot Noir- Sonoma/Napa: We have seen a softening of price, while demand remains moderate. The clients who are going to purchase are the “Just-In-Time” buyers that are entering back into the market for more wine. Recent sales have held at the $17 to $18 per gallon range for high quality 2013 Sonoma County lots.
Merlot – There are not an excessive amount of gallons of Merlot actively for sale; however the supply is in excess of demand. Buyers sourcing for Napa Valley Merlot for varietal programs are ready to make purchases now. Strong demand for North Coast and Sonoma Cabernet Sauvignon has hepled move some Sonoma County and North Coast Merlot. Large winery buyers have 2014 Merlot from grapes and some of those wineries will be sellers. Price will likely soften.
Chardonnay – The large 2014 crop will most likely put downward pressure on prices of bulk wine from all regions of the North Coast. Most of the gallons actively for sale are winery owned. Based upon the deals our Bulk Wine team is working on with growers, we don’t predict there will be many grower owned gallons of 2014 wine offered for sale in bulk. Wineries will try to sell 2013 case goods and adjust inventory by listing 2014 wine in bulk for sale. Lake and Mendocino County Chardonnay could see the largest softening in price due to large inventories of Sonoma County, Monterey County and Northern Interior wines.
Sauvignon Blanc – Demand for Sonoma County and Napa Valley 2014 bulk wines may be soft because of vintage 2012 & 2013 wines that are still in the casedgoods market. We have some early interest in Lake County lots.
Zinfandel – A lighter crop might position bulk wine inventory actively for sale into balance. Our Bulk Wine team has had some new buyers for Zinfandel at the right price, but demand is still soft.
Interior Bulk Wine Market Overview
Written by Michael Robichaud
Most of the large California wineries went into harvest with larger inventories than normal. Due to new acres and reasonable yields on existing acres they also have a good supply of 2014 wine in tanks. Demand for bulk wine is softer which may result in downward pressure on bulk price.
Most likely prices will continue to soften for Cabernet Sauvignon and premium blenders. Due to the increase in supply of Cabernet Sauvignon, Merlot and generic blenders will continue to be a challenge to sell in the bulk market.
Due to lighter yields on 2014 Zinfandel, we may see fewer gallons offered for sale in bulk next year, but still predict supply will be in excess of demand.
The bulk market for Chardonnay and most whites will continue to be slow.
2014 Pinot Grigio bulk wine will be active but also price-sensitive. If you have bulk 2014 Pinot Grigio for sale, let Turrentine know right away!
The continued supply of quality wine at attractive prices typically spurs innovation, new brands and labels that could improve the market.
Central Coast Bulk Wine Market Overview
Written by William Goebel
Recent activity in the Central Coast has been slow for all varieties on the bulk market and that trend has sustained through harvest. The 2014 crop is similar in size to 2013, adding more challenges to selling 2013 bulk Chardonnay, Merlot, and Pinot Noir.
Chardonnay: We have 50 lots or approximately 750,000 gallons of 2013 Central Coast Chardonnay actively for sale, about 270,000 gallons are from Santa Barbara County and 180,000 gallons from Monterey County.
Pinot Noir: We have over 50 lots listed or approximately 340,000 gallons of 2013 Central Coast Pinot Noir that need a home. Most of the bulk wine Pinot Noir available is Monterey County, but still about 100,000 gallons is from Santa Barbara County.
Cabernet Sauvignon: Demand for 2013 Central Coast Cabernet Sauvignon has been hot and cold this year, with buyers coming into the market early with different price expectations than sellers, creating a disconnect that could not be bridged. Buyers then focused inland and north on sourcing Cabernet, while waiting out the Central Coast market. A few months later buyers entered the market again, secured the few truckloads they needed and left before the end of summer. Currently, there are about 40 lots listed for sale, or approximately 580,000 gallons of Central Coast Cabernet Sauvignon. Most of the demand from bulk buyers for Central Coast Cabernet Sauvignon is specifically for Paso Robles.
Merlot: In the Central Coast, Merlot saw an early uphill struggle during the 2013 harvest when wineries and custom crush facilities were not interested in discussing available Merlot grapes. We have a saying here around the office, “If you are having a hard time selling your grapes, we will most likely have a hard time selling the bulk wine.” In 2014, there were only a few completed spot market deals for Central Coast Merlot. 37 lots are available totaling 478,000 gallons are currently offered for sale.
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Sonoma County – Mike Needham & Alicia Kump
Napa Valley – Mike Needham & Alicia Kump
Mendocino County – – Mike Needham & Alicia Kump
Lake County – Mike Needham & Alicia Kump
For all North Coast areas, we have had a long growing season. Spring was warm, summer hot, thus a lot of degree days that have encouraged the vines to keep growing. Growers with water have been proactive on their irrigation schedules to help mitigate the effects of heat.
South Valley – Erica Moyer
Lodi/Delta – Erica Moyer
Monterey County – Erica Moyer
Santa Barbara County – Audra Cooper
San Luis Obispo County – Audra Cooper
North Coast: Mike Needham & Alicia Kump
Monterey/San Benito County: Erica Moyer
Lodi/Delta: Erica Moyer
Central Valley: Erica Moyer
San Luis Obispo and Santa Barbara County: Audra Cooper
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(Article originally published Monday, August 18, 2014)]]>
On August 14th, the National Agricultural Statistics Service (NASS) released their 2014 crop estimate for wine grapes of 3.9 million tons, down 8% from 2013. However, intelligent supply decisions cannot be made using the projection because the crush will not be 8% down on every variety in every region. An excess of French Colombard from Merced cannot substitute for a shortage of Cabernet Sauvignon in Lake County, so why should the industry pay attention to the total tons crushed projection? The NASS is diligent in researching these numbers, but the number needs to be put in perspective. Overall statewide total tons are the combination of roughly 120 different varieties planted across 17 districts with differing vine spacing, trellis systems, viticultural practices, weather patterns, and most importantly this year, access to water. Varietal based projections and market information for the regions (including competing regions) that are vital to your business are exceptionally more valuable.
Turrentine Brokerage has been advising clients on specific market dynamics for over 40 years. Our reputable market analyses in publications and public speaking focuses on both the short and long-term market dynamics of specific varieties in various regions throughout California.
Potentially increasing the overall crop size for 2014; newly bearing acres of Cabernet Sauvignon and Muscat varieties continue to produce more fruit in the San Joaquin Valley as they mature as well as fruit from newly bearing acres of Paso Robles Cabernet Sauvignon and Pinot Noir in Sonoma and Monterey Counties. In Sonoma County, the Pinot Noir crop has also benefited by converting from cordon to cane pruning, which has stabilized and improved yields and formed a line of defense against various diseases, such as Eutypa. In Napa Valley the early results on Chardonnay picked for sparkling wine are above estimates. Projections for Chardonnay yields in Sonoma County and Monterey County remain optimistic. The weather is also currently mild, which may aid in cluster weights.
Potentially decreasing the overall crop size for 2014, a warmer earlier growing season has impacted the yields on early season varieties. The impact of drought has placed downward pressure on yields in many parts of California, most specifically the Southern San Joaquin Valley and the Paso Robles regions. Other regions have escaped major impacts from lack of water, so far. Even in the most drought impacted regions water management has been varied: for example, some growers chose to water their highest value varieties while others left land fallow in order to irrigate established vines and trees. Reports from some early harvesting in the south San Joaquin Valley were of a 50% reduction in yields on fields not irrigated and a 15% to 20% reduction in yields on the fields irrigated normally. The outcome of varied water management choices makes it even more challenging to assess what the overall wine grape supply will be. The disease pressure has been more severe in parts of the San Joaquin Valley and some regions of the North Coast resulting in a few rejections at wineries in the San Joaquin Valley.
Individual specifics for the crush this year are too numerous and varied to write in a single update and are going to be changing weekly as harvest progresses. Turrentine brokers are talking to clients and walking vineyards every day, discussing the progress of harvest and analyzing the effects of supply on the market for grapes and bulk wine. Call your Turrentine Broker to discuss the specific market conditions and how the upcoming harvest will affect the varieties and regions vital to your company.
For more information on the current bulk wine and grape market, click here.