US grape growers wihhout contracts struggling to sell grapes, with outlook "bleak" in some regions
Californian grape growers without contracts in place are struggling to sell their crops, despite the health of the overall wine business.
This is according to Jeff Bitter, president of the Allied Grape Growers who told Wine Business that the ”spot market is down almost across the board, in all regions and all varieties.” This is being driven by two factors, he claimed, namely last year’s good sized crop, which was 10% bigger than the average of the previous four years, and over-ambitious sales projections from the 2016 – 2018 sales years, which has resulted in a slow build of inventory ahead of last year’s plentiful crop. It is likely that some grapes will remain unpicked and stay on the vine this year, Bitter said.
"I can’t comment quite yet on whether or not this also includes the most premium winegrowing regions, but if so, it woudln’t be the first time.”
One of the problems is that tanks are already full, while another issue is that growers whose vineyards are coming off contract have been unable to re sign, or are being offered much lower prices.
”It’s not a year to have open fruit,” confirmed Lodi’s Winegrape Commission executive director Stuart Spencer. Other brokers claim they are receiving calls from growers who stil have grapes available, with a surfeit of fruit compared to the last three to four years.
Karen Mancuso, primary broker at San-Francisco-based Mancuso Wine Brokerage reported that some Napa Valley Cabernet Sauvignon was selling as low as $1,500 a ton, compared to last year’s average price in for Napa Valley Cabernet Sauvignon of more than $7,850 a ton, according to the US Department of Agriculture’s crush report. She said that she receives calls every day from growers desperate to sell their fruit.
Brian Clements, vice president and partner at Novato-based Turrentine Brokerage, also reported lower wine grape prices than in past years. “We see prices falling throughout California on all varieties,” he said, adding that there was a lot of Napa Valley Cabernet Sauvignon on the market. On the Central Coast the situation for fruit not under contract is “bleak,” he and others said. “There is no market for these grapes.” Meawnhile, Winemaker Michael Haddox at Agajanian Vineyards and Wine Company on the central coast concurred, and said : “Nobody is buying - It’s scary.”.
The industry is also having to cope with the pending sale of Constellation Brands labels and other assets to E&J Gallo which has created a certain level of uncertainty, according to Spencer.