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Fourth big winegrape harvest could sate vintner thirst
May 18, 2015
(NBBJ) - With potentially a fourth straight sizable California winegrape harvest on the horizon, a short-term slackening in demand from vintners to buy more grapes and buy excess wine is emerging, according to brokers of such deals.
While demand for cabernet sauvignon grapes and wine has remained active for mass-market brands sourcing from lower-cost California interior regions and high-end brands supplied from the state’s coastal regions, interest in chardonnay has been waning, leaving even wine from previous vintages available.
“There has been some inventory buildup in this market,” said Glenn Proctor, partner of wine and grape brokerage Ciatti Co., told about 125 industry professionals attending the 20th annual Vineyard Economics Seminar, held at the Napa Valley Marriott hotel on May 15. “We’ve been blessed with three very bountiful harvests.”
San Rafael-based Ciatti alone had 33 million gallons of wine for sale in bulk from vintners as of May 13.
“Which, domestically, is the largest we’ve seen in Ciatti’s history,” Todd Azevedo, a wine broker for the 44-year-old company, told the audience.
While available North Coast cab to buy in bulk is scant — Ciatti has only 150,000 gallons listed — more bulk chardonnay and pinot noir grapes from outside the most popular appellations in Sonoma, Mendocino and Napa counties are for sale.
“We’re finding out that everyone has a little inventory to sell,” Azevedo said.
The “relatively stagnant” market for bulk wine elsewhere in the state is leaving such North Coast producers limited options for selling their excess, he said.
Good news is that the fuller tanks are prompting a steep drop in purchases of wine in bulk from outside the state and country, and the profitability of other cash crops is giving farmers in high-production areas of the state alternatives to wine grapes, Proctor said.
The brokers cited recent data compiled by Woodside-based Gomberg Fredrikson & Associates that while California wine shipments to U.S. and export markets increased 4 percent last year overall, imports decreased 1 percent as bottled wine and 16 percent as bulk. That’s quite different from 2010–2011, when California producers of wines retailing for less than $10 a bottle were importing bulk wine actively to make up for smaller harvests, Proctor noted.
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