Statewide prices dip slightly from prior year. We should have more than enough supply unless the drought materializes.
(February 10, 2014, San Rafael, CA) – The Preliminary California Grape Crush Report released today shows that we have hit another record harvest in California, 4.23 M tons up 5.3% from 2012. The output, while large, was in-line with industry expectations. Growers and vintners scrambled for tank space during the harvest, and few if any, felt that the crop was not going to at least equal that of 2012.
It was another large Cabernet Sauvignon harvest across the state – up 5.1% from the historic harvest of 2012. This supply should continue to support the increased demand for premium wines from Coastal appellations that are priced in that category’s ‘sweet spot’ in the eyes of consumers. At the same time, this should allow the sub $10 category to see some relief on high cost of goods that had a major impact on California appellation economy wine sales and opened the door to Cabernet Sauvignon bulk imports.
Chardonnay is California’s number one wine grape. Today’s report validates what most of us have been expecting—We had a record crop, and due to excellent harvest conditions, quality was text book perfect. All regions had above average crop size and above average quality. Chardonnay weighed in with a whopping 755,500 tons, up 2.7%, and pricing held steady, up only 0.8%. The state set a new record with Chardonnay tonnage, beating both the 2005 and 2012 vintages.
California succeeded in another record Merlot harvest up 3.1% to 345,203 tons from the previous record crop in 2012. It’s interesting to note that the average price per ton for Merlot in all Central Valley districts decreased anywhere between 4% and 11%, while the average price per ton in all Coastal districts increased. Some this has to do with the nature and the term of these contracts, but we believe this points to the continued effort towards price relief for wines in the $10 and less per bottle price category that had previously been impacted by higher cost of goods.
Muscat grape varieties posted the strongest gains in 2012, with Muscat Alexander leading the way at 60%. The major Muscat varietals combined to take the third spot in white grape production, behind Chardonnay and Colombard. The explosive growth in Muscat production could result in bulk market imbalance, as recent demand for Moscato has been sluggish at the retail level.
Grape production of Pinot Grigio, a high sales growth item for California, dropped by almost 9% in 2013. Demand in both the grape and bulk wine market remains strong for Pinot Grigio.
After the large 2012 Pinot Noir crop, nobody believed that we would see another record year. The 2013 Pinot Noir crop is now on record as the largest crop in California history with 257,000 tons up 3.4% from 2012. This would make one consider that Pinot Noir has no growth ceiling. 200,000+ tons appears to be the new norm for the Pinot Noir crop in California. District 3 (Sonoma) and 7 (Monterey) accounted for 42% of the California production.
California backed up a huge 2012 Zinfandel crop with an even larger crop in 2013. The state’s total Zinfandel production was 467,337 tons increasing 4.3% from 2012, giving the industry a healthy supply which has softened both grape and bulk wine prices. Districts 11 (Lodi) and 13 (Fresno area) accounted for 71 % of the state’s production alone, while the Interior regions in general produced 89 % of California’s Zinfandel.
Thompson Seedless grapes which are used in both the wine and food industries as concentrate rebounded nicely from a very small 2012 harvest of 231,000 tons to a 289,000 ton Crop in 2013. The average price per ton dropped from a record high of $322 per ton in 2012 to $252 per ton price.
The Rubi Red harvest recovered as well in 2013, from a below average 2012 harvest yield of 226,500 tons to a solid 2013 harvest of 255,700 tons. Not only did we have more new acreage come into production, but both sugar and color showed dramatic improvement. Pricing is expected to stay fairly stable on this grape as a majority of these vineyards are under long term contract.
About CIATTI GLOBAL WINE & GRAPE BROKERS
The Ciatti Company is the world’s largest and most comprehensive bulk wine and grape brokerage. Aside from its home base in San Rafael, California, seven additional offices around the world provide clients the kind of information and intelligence that today’s competitive global wine industry demands. The company, founded in 1972, has deep roots in the wine industry, both in California and the countries in which the company operates. The current partnership includes industry professionals with over 135 years of collective experience including: John Ciatti, Greg Livengood, Glenn Proctor, John White, Chris Welch and Steve Dorfman.