Grape Market Update

North Coast – Mike Needham

Sparkling wine producers are reporting that Chardonnay is picking out on estimates which are close to the five-year average, but below last year. Sauvignon Blanc harvest is well under way in Lake County, and while yields appear to fluctuate from vineyard to vineyard, it appears to be more light than heavy. Some early feedback from wineries is that Russian River and Sonoma Coast Pinot Noir is picking out above estimates, but yields per acre are not as heavy as last year. The most updated analysis from our vineyard visits and talking to growers and grape buyers is that grape maturity across varieties and regions of the North Coast is tracking similar to last year at this time. In recent years, many of the quality grapes from the best sites and growers had already been contracted at this time, but opportunities are ripe this year. We have Russian River and Sonoma Coast Pinot Noir and Chardonnay, Napa Valley and Alexander Valley Cabernet Sauvignon, Napa Valley and Sonoma County Sauvignon Blanc all listed for sale. The tightest market for supply is Napa Valley Merlot. Buying activity has ramped up as we ap-proach harvest for many varieties driven, in part, by the lower spot market prices. Recent deals for Russian River Pinot Noir and Napa Valley Cabernet Sauvignon have been well below last year’s spot market average. If you have interest in any of the varieties listed above or another variety from a region, we are confident we can find great options for you.

Central Coast – Audra Cooper & Erica Moyer

In Monterey County, climatic conditions have allowed for berry sizing of Chardonnay and Pinot Noir, resulting in yield expectations to be aver-age to average plus. Harvest is just getting started in Pinot Noir. Wineries are remaining conservative in their purchasing due to capacity constraints and slowing sales. We have a good supply of Pinot Noir and Chardonnay available in all appellations of Monterey County, including Santa Lucia Highlands. There has been recent activity on Pinot Noir, but there are still good opportunities.In San Luis Obispo and Santa Barbara Counties the crop is lighter than last year across all varieties and it appears to be hovering around aver-age to slightly above long-term average yield per acre. Similar to Monterey County good climatic conditions have led to berry sizing of Chardonnay and Pinot Noir. The later ripening reds do still appear to be behind normal maturity as of this date. Good Chardonnay and Pinot Noir grapes from Santa Barbara and San Luis Obispo are available. Good Paso Robles Cabernet Sauvignon and other red varieties are available and due to another year of plentiful rainfall the canopies on most vineyards look better than they have in 10 years. In the last few days limited activity from buyers is picking up as the early white varieties ripen up. There are still many opportunities for grapes from all regions and all varieties available for purchase at re-duced prices.

Interior – Erica Moyer

Harvest in the Interior has been underway for a month. Chardonnay for sparkling, Pinot Grigio and Sauvi-gnon blanc are in the barn, as harvest has begun for Chardonnay, Zinfandel (red/white) and Pinot Noir. Merlot harvest will be right around the corner. In general, wineries are holding growers to their contracts and not accepting excess tons. There have been a couple exceptions, such as Pinot Grigio and Sauvignon blanc, where excess tons were either accepted by the winery or purchased by another winery. Yields for Chardon-nay are average to average plus, as we are receiving calls to broker excess tonnage from contracts.In the Lodi/Delta and Southern Interior regions, many tons remain unsold and our list of available grapes continues to grow, as wineries remain conservative in their purchasing due to capacity constraints and slowing sales. Although we have been busy making deals happen by being at the right place, with the right variety, with the right grower, at the right time. There has not yet been the volume of tons moved compared to last year and prices are typical of surplus prices, in the $200-300 per ton range, trending more to the mid to low-er $200. Give us a call to review opportunities.

Bulk Market Update

The volume of bulk wine actively for sale has begun the seasonal downturn as wines are sold or sellers re-move it from the market because they have higher and better use than to sell at current market prices. There are 2 million fewer gallons over the last two weeks and the volume continues to decline. Buyers still have plenty of wine to taste though, but inventory is always changing as wines come off the market and new 2018 wines are listed for sale.

Despite harvest starting there are still a number of active buyers for bulk wine at this time, mostly the smaller growing companies and négociants, but storage space is limiting some purchases. We still can find storage to make a deal happen. Many large purchasers, similar to the grape market, have decided to hold on purchas-ing additional 2018 wines until after harvest and a few may not come back to the market at all. With plentiful supply, bulk sellers are more willing to accept the new prices, and in some instances more creative payment terms, which means deals can be done more quickly than earlier in the year. Attractive pricing is the main driving factor for deals right now, but the quality still has to be there.The wines that continue to be most in demand are Napa Valley Cabernet Sauvignon, Russian River Valley Pinot Noir and Chardonnay, and other higher-quality lots of Central Coast Chardonnay and Pinot Noir. Recent sales of Napa Valley 2017 and 2018 wines as low as $15 per gallon. Larger volumes with quick shipment have gone for even less. Russian River and Sonoma Coast Pinot Noir lots have been sold for less than $10 per gallon. The extra tons of Chardonnay that wineries crushed last year have been offered for sale in bulk and it has taken some very low prices to move that wine in the last few weeks. A few buyers are still active purchasing wine for distillation, but delivery of wines on these deals need to be scheduled weeks in advance, so please reach out to us if this is of interest to you.

Do not assume that nothing is happening or what others will or will not be doing. We have actually sold con-siderably more gallons of bulk wine this year to date than last year. Do not assume that the wine or grapes you need will be available when you enter the market to buy them. The best advice is to call us, talk over your situation and work with us on a plan for success in buying or selling. Our grape and wine brokers are continuing to work hard to find any and all buyers by calling and meeting with buyers that have the ability to enter the marketplace and do some purchasing. Since 1973 we have experienced all the challenges in all the cycles…. we have been here before and we are always here to help our clients navigate the cycles, so please give us a call.