“Product diversification” and a short crop are helping balance continuing oversupply.
By Jeff Siegel
Want to buy Cabernet Sauvignon from California’s Central and North coasts? Take your pick, vintage included. The same is true for Sauvignon Blanc from those regions, even though it’s been one of the few grapes to hold its own during the current downturn.
Having said that, report bulk wine brokers who work in those regions, prices seem to have steadied and the surplus is maybe, kind of, hopefully, approaching manageable levels. And, adds one broker, there are even a couple of grape varieties in short supply.
A Cycle of Oversupply
Some of this is the natural workings of the bulk market, as supply and demand play their part to level the surplus. The near-historic short crop in 2024 has also significantly reduced supply. But some of it, say brokers, is the result of growers and wineries looking for ways to use bulk grapes to their best advantage, even if it’s not using them to make wine.
“The message keeps getting out there, and there are all kinds of things going on and being done, not only on the supply side, but on the demand side,” says Steve Fredricks, the president of Turrentine Brokerage, pointing to the forthcoming Wine Institute marketing program and similar efforts such as “Come Over October” on the demand side.
“This doesn’t mean we’re going to see results immediately,” he cautions, “and it doesn’t mean that more things don’t need to be done. But there is movement out there.”
Short-term contracts
On the supply side, Fredricks points to a contract market that may have started to improve from the 2023 harvest, and where growers and buyers — particularly smaller producers — have reached accommodation with shorter-term contracts. That allows these producers, he says, to know they’ll have enough grapes but without the financial burden of traditional longer contracts.
In addition, the February 2025 analysis from Ciatti Wine Brokers reports what might be increased demand and what it calls “competitive pricing” for generic wines and traditional bulk options, as well as what could be a trend in using better-quality grapes to make less expensive wines with higher quality.
Creative solutions
Meanwhile, what some analysts label “product diversification” may be expanding. This is not only being seen with larger producers who are investing in the low- and no-alcohol category, but with smaller producers (who can’t necessarily afford the costly no-alc process) experimenting with wine cocktails. Broker Shannon Gunier of North Coast Winegrapes cites one customer making high-quality wine cocktails with bulk grapes and enjoying some success.
This does not mean demand has returned to pre-Pandemic levels, of course, or that even more acres of vineyard land don’t need to be taken out of production. Rather, it means the bulk market is more nuanced. The Ciatti report notes that there has been a slight increase in demand for domestic bulk wine, and that international interest — where many higher-end California producers have started to market their products — remains steady.
And what about those grapes in short supply? Gunier says they include Riesling and Sangiovese, two varieties not much grown in California anymore, as they were removed to grow the reds that are now sitting in bulk tanks. That, she says, is the way of the wine business.
Jeff Siegel
Jeff Siegel is an award-winning wine writer, as well as the co-founder and former president of Drink Local Wine, the first locavore wine movement. He has taught wine, beer, spirits, and beverage management at El Centro College and the Cordon Bleu in Dallas. He has written seven books, including “The Wine Curmudgeon’s Guide to Cheap Wine.”
