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Turrentine Market Update

Grape Market

North Coast

It has been a dynamic year. There was early activity in the market directly after harvest following a second short crop in a row. That led to early activity and new contracts following the 2022 harvest into roughly the beginning of spring. Then there was a slow down as buyers wanted to see about set and bloom and then another surge in activity. This has been a bit of a different dynamic from the last two years where it was busier throughout. Harvest is much later than it has previously following plenty of rain last winter which led to strong canopies.

There are some areas in Sonoma and Napa where ripening is much slower than the North Coast (Lake and Mendocino County) where there were more sunny degree days. Overall, the fruit looks good. We are almost through the white grape harvest which is wrapping up in the next two to three weeks. Cooler regions such as Russian River Valley and Sonoma Carneros are tracking quite a few weeks behind the last few years, but the recent warm weather will ensure that fruit will be harvested.

There is quite a bit of uncontracted fruit in the North Coast areas of Lake and Mendocino Counties this year, mostly reds. Sonoma has had their difficulties as well, and there are some red grapes still available, not many whites. Red grapes in Napa Valley have fared better.

We are starting to see some overages with all the winter rains we got last year. This has led to an average to slightly above average crop this year than the past two years. This is good for the growers, just hoping that wineries stay active on purchasing grapes throughout harvest on any type of overages.

Central Coast

The crop looks a bit heavier than last year, with larger berry sizing. This season has come with its challenges both from a growing and market perspective. We started out with quite a bit of rain similar to the El Nino years of 1997 and 1998. We did have a lot of mildew pressure, maybe the worst in the last 17 years, perhaps the last 20 years.

In regards to overall quality, there were a lot of concerns whether or not the crop would get ripe. The great news is that a lot of chemistries come well within the windows of optimum parameters for contracts, so we should get most of it in the barn. The challenge is going to be logistics. This is a very compressed harvest and a lot of grapes will need to come off the vine in the coming weeks.

We had resigns that were strong coming out of the gate from harvest of last year. As we got into May and June, the market really dropped off and demand has remained minimal since that time. We will see some deals happen between now and the end of harvest. They will be at value pricing, sub-$1,000, more cleanup deals than not. This is the 3rd greatest number of tons available at this time since we have been tracking in 2001, there should be a number of grapes that are either going to custom crush or left on the ground. If you are a winery, this is a great time to take a look at fruit for the future and do some trial lots. You will get a great deal and great quality.

Overall, the Central Coast crop is likely to be slightly above average. That said, Sauvignon Blanc will likely be the largest on record due to the record bearing acreage. There will be varieties like Chardonnay and Pinot Noir that are hit-and-miss. Pinot Noir appears to be larger than Chardonnay, but that remains to be seen as it depends on how much we can get in and when between now and Thanksgiving. The reality is that we will likely go well into November for this harvest.

San Joaquin Valley

We’ve had a cooler growing season which delayed harvest, particularly with whites that were 2-4 weeks later than last year. Reds are later than one year ago, but closer than whites have been.

There have been a lot of early season mildew issues, in some cases rot issues. This is something that wineries and growers are still dealing with now and has led to rejections up and down the valley. This has had more of an impact on a number of varieties, but in particular for thin-skinned varieties. Growers have been challenged to try and keep these clean with big canopies and more soil-moisture early in the year.

Yields have been pretty good for those that did not have mildew or rot issues—especially younger and frost damaged vineyards from last year that essentially had the year off.

Market demand has been challenged for red varieties. White varieties have had a bit more demand for Chardonnay, Pinot Grigio, and Sauvignon Blanc. As overages came in from those three varieties, wineries were willing to contract additional fruit. That has really slowed down lately as a lot of overages came to the market. Most wineries are holding their growers to tonnage maximums.

Let’s stay in touch as we finish out the 2023 harvest. Let us know what you have available and we will do our best to find a home for those grapes. Let’s start talking early after harvest about the 2024 vintage and what you have available so we can start working on those for you also. Hopefully we stay dry here at the end of the season and get everything in the barn. Hope you have a successful harvest and we’ll talk to you soon.

Bulk Market

We have seen a lot more wine that been available for the last 18 months—one indicator that is showing us that we’re in that front-end of a cycle trending to excess and understanding the lack of demand for those gallons is also very important. As we’re going into the 2023 harvest, we have not seen a lot of demand or opportunistic buying that come back to the bulk wine market to clear out a lot of gallons that are available or opportunistic grapes on the market.

It is without a doubt this time of year that we always have a discussion of making grower-owned gallons of wine and taking advantage of other opportunities that can show up. We can’t stress enough the need to exercise caution considering we’re still working on moving through 2021, 2022, and even 2020 gallons of red wine that have been crushed in the past because there weren’t those opportunities to move the grapes. Talk to us early and often to understand the bulk market as far as what is available and what demand is.

Red Wines

The first variety is Cabernet Sauvignon. We have available supply in the interior and in the North Coast that has seen very little demand with inventory levels backed up for 2020, 2021, and 2022 vintages with an oncoming 2023. This has led to buyers having more time on their hands to look through and be able to pick and select which lots they like and prices have been moderating downward. When we look at other areas for Cabernet, in particular Napa and Paso Robles, these areas continue to do very well in the marketplace with inventory levels moderate to limited. This is followed by Sonoma where we do have available supply, but prices have been coming down in this area.

When we look at Pinot Noir, most of the inventory that we have within the state is coming from the Central Coast. Demand levels have been very limited to moderate at best. Prices have been coming down and we are building up inventory levels with 2020, 2021 and 2022, and again 2023 that is coming online with very little interest at this time.

Moving to Zinfandel, there is an abundant supply in the interior and that’s predominantly where we see some limited activity coming up. Petite Sirah has limited activity in the interior and a bit better in coastal areas.

White Wines

There are about 1.6 million gallons of Chardonnay listed with Turrentine Brokerage—1 million gallons of that is California Appellation. This is followed by Central Coast at about 250,000 gallons. Back at the end of Q3, there was a slight uptick in demand for California Appellation Chardonnay, but that has since flattened with just a handful of value buyers looking between $3.00 to $3.50 per gallon.

Currently there are around 450,000 gallons of Sauvignon Blanc, mostly 2022 vintage, listed with Turrentine Brokerage. Of this, 300,000 gallons are California Appellation followed by 65,000 of North Coast and 54,000 gallons of Sonoma County. The window closes pretty quickly on Sauvignon Blanc, typically around Q3. Since then, demand has been flat. There are some opportunities for buyers looking to bridge a gap, and there are good deals likely available between $3.00 to $4.00 per gallon.

There are 182,000 gallons available of Pinot Grigio, mostly 2022 vintage, through Turrentine Brokerage. Similar to Sauvignon Blanc, the window for Pinot Grigio typically closes around the same time, but there are still some opportunities for those looking to bridge a gap. There is some early interest for 2023 Pinot Grigio.

The last is generic whites, including floral varieties. There are 1.2 million gallons listed with no demand. Buyers are eyeing the 2023 vintage to determine what they need at the moment.

If you have any questions, please reach out to your broker so we can get together and answer your specific questions. Read More