The current market for California’s North Coast wine grapes is like nothing Brian Clements, vice president of Turrentine Brokerage, Novato, Calif. has seen in 25 years of matching sellers with buyers.
Three straight years of larger than-average-crops followed by what currently looks to be another one in the making is unusual enough, he says. But this increased supply of grapes combined with prices that continue to remain relatively strong in the first few months of 2015 is downright astonishing to him.
In the past, every time Clements has seen two big crops in a row, grapes prices have dropped significantly for most varieties. While prices, as of the first of June, were lower than this time last season, they were still higher for quality grapes than he would have expected.
So what’s up?
“To me, it’s a pretty strong statement by wineries of their confidence in selling more case goods down the road,” Clements says. “I’m pleasantly surprised that wine grapes are still making money for North Coast growers even as this year’s crop is shaping up to be another big one.”
Following the 2011 harvest, stocks of California bulk wine actively for sale totaled a meager 4 million gallons. In response, many wineries then signed three-to-five-year contracts with growers to ensure adequate supplies of grapes. As it turned out, the next three crops were big ones. As a result, bulk wine supplies have since built up to the current level of about 22 million gallons, Clements notes.
“Now the tanks at the wineries are full, and everyone is bottling ahead of schedule to make room for this year’s crop,” he says. “Meanwhile, sales of $10 a bottle and higher wine have been doing quite well. Although the market for North Coast grapes hasn’t been a barn-burner this year, it’s been pretty steady since February.”
Now, however, except for continued very strong prices for Cabernet Sauvignon, the relatively good prices for other available North Coast varieties are starting to slip. Clements looks for these prices to keep sliding through the remainder of the growing season.
“The vines have set a reasonably good-sized 2015 crop, and there’s no reason to think prices for 2014 North Coast grapes, with the exception of Cabernet Sauvignon, will increase or even stay at current levels,” he says.
In fact, as typically happens this time of year, some wineries in need of fruit are biding their time, waiting until veraison, when they anticipate lower prices, before they get back into the market, Clements adds.
“I predict prices for varieties other than Cabernet Sauvignon will continue to decline through harvest,” he says. “If you’re still waiting to sell North Coast grapes because you’re asking an above-market price you may be surprised just how low they could go for certain varieties.”
For the most part, though, North Coast growers and wineries remain optimistic about the 2015 season.
“Mother Nature has given us a fantastic growing season,” he says. “As a result of the cool weather in May, the North Coast crop is now anywhere from normal to seven to 10 days ahead of the usual rate of growth. Of course, we could get hot weather and water supplies will continue to be an issue for some growers in this region. I just hope the favorable growing conditions continue, and we have another ‘perfect’ growing season that produces fantastic wines for the consumer to enjoy.”