The bulk wine and grape market has seen a recent downturn, resulting in a surplus of inventory actively for sale. This is due to sluggish consumer sales of wines priced below $10.00 per bottle. At our brokerage firm, we’ve been closely monitoring the changing market and marketing opportunities to ensure we offer our clients the best advice. However, buyers are still cautious about investing in additional inventory despite attractive prices.

During oversupply periods, custom crushing becomes a topic of discussion, and wineries are reaching out to us for promotion of their custom crush services. With over five decades of experience in custom crush bulk brokerage, we believe success comes from understanding the risks, creating mitigation strategies, and setting realistic expectations.

Over the past five decades, we’ve seen successes and failures in custom crushing. Drawing from this experience, we emphasize that success in custom crush ventures hinges on understanding the associated risks, devising mitigation strategies, and setting realistic expectations. While our guidance has remained consistent, there isn’t a one-size-fits-all strategy.

Each client has their own unique market position so our advice is custom. However, regardless of market conditions, we consistently advise:

• To Growers: Be mindful of the grape market’s impact on the bulk wine market.  A challenging grape market often signals a tough bulk wine market.
• To Processors: We emphasize the importance of offering reliable customer services to the growers who will become clients paying for services. 

For those looking to take the next step:

• Understand the Market: Be aware of present market dynamics. Seek our counsel on probable future market conditions when the wine will be ready for sale. We have data on current inventory, demand patterns, and consumer preferences, as well as future insight on supply and demand trends by variety.
• Know the Purpose: Determine if the goal is to broaden a customer base and a market for the grapes for future sales, preserve crop value, or are merely are dissatisfied with current grape prices.
• Quality and Quantity: Produce the right volume of wine, considering factors like region, variety, and inventory.  Strive for the best quality—if you do not have winemaking expertise, hire a consulting winemaker. Understand the demand for various wine styles. Make wine that allows for the greatest probability to sell on the bulk market while simultaneously showcasing your grapes to potential buyers.
• Budget Wisely: Strike the right balance of investment— be cautious not to over invest in wine that may not sell, and avoid under investing to the point that buyers are uninterested in the wine while also reflecting poorly on your grapes.  Allocate funds for improving wine quality. Ensure your wine remains competitive, especially for last-minute blends.
• Patience Pays: Be prepared to store your wine for 18 months to 2 years. Rushing sales can severely undermine your success.
• Grower Winery Partnerships:  Decades ago, we developed custom crush partnerships, and during oversupply these strategies become more popular. While these have been beneficial when both parties share clear expectations, they have also proven challenging and unsuccessful, especially when expectations were not aligned. To ensure mutual benefits, we’ve devised strategies to foster not just superior wine quality, but also strong partnerships.

Since the variables for each deal are too numerous and the advice too specific, it is best to give us a call to help you understand the pros and cons of your unique situation. We’ve fostered lasting relationships with our clients for over 50 years, continually focusing on their best interests for the long-term. Give us a call so we can offer personalized advice on the pros and cons of your unique situation.