Contact Information: Contact: Brian Clements: (707) 495-8151 specialty -- grapes from all of California, especially Napa, Sonoma, Mendocino & Lake Co. Steve Fredricks: (415) 847-0603 specialty -- grapes and bulk wine from all of California and around the world Bill Turrentine: (415) 999-9490 specialty -- grapes and bulk wine from all of California and economic analysis Erica Moyer: (209) 988-7334 specialty -- grapes from the San Joaquin and Sacramento Valleys and the Central Coast Matt Turrentine: 805-312-1828 specialty -- grapes from the Central Coast
Trends Shaping the Future of California Wine Revealed in "Grape Crush Report," Experts Explain
| Source: Turrentine Brokerage
NOVATO, CA--(Marketwire - February 8, 2008) - Pinot Noir, the hottest variety in California,
dropped a staggering 16% in 2007 compared to 2006 which is a decrease of
2.9 million gallons or over 14.5 million bottles. The 2006 harvest was well
below demand and the short 2007 harvest further aggravates the shortage.
The shortfall was most acute in the most desirable appellations such as
Sonoma County, down nearly 24%, and Santa Barbara County which was down
over 15%.
"Despite grower's efforts to increase supply by planting new acres of Pinot
Noir, Mother Nature delivered us a smaller harvest of what we wanted most.
The silver lining is that what she gave us tastes exceptionally good," said
Brian Clements, Senior Partner, Turrentine Brokerage.
As predicted by "The Turrentine Outlook" and now confirmed by the "Grape
Crush Report," the 2007 grape crop in Coastal areas declined. The crop in
the Central Valley rose over 2006 but was still less than the record 2005
harvest. In the meantime, wine sales continued to grow, especially sales
for premium varietals. The changing supply / demand balance was
particularly evident in the "Grape Crush Report's" numbers for Coastal
Chardonnay, which dropped by 3.6 million gallons, or over 18 million
bottles in 2007 compared to 2006. In contrast, the Interior Regions were up
52 million bottles.
"Demand is now well ahead of supply for Chardonnay from Santa Barbara
County, Russian River Valley and the Carneros district of Napa and Sonoma.
The supply of Chardonnay from other regions in the state -- and from around
the world -- has also tightened up. Chardonnay has emerged from many dark
years of excess into the sunlight of abundant demand. The demand for
California Chardonnay is the strongest it has been in at least eight
years," said Steve Fredricks, Managing Partner, Turrentine Brokerage.
Cabernet Sauvignon production was flat in the state as a whole. Cabernet
did enjoy a small increase in Napa and a somewhat larger increase in
Sonoma. Mother Nature gave them an additional 700,000 bottles and 2.3
million bottles respectively.
"Cabernet Sauvignon is perhaps the most respected red wine variety grown in
California and around the world. But, respected or not, both California
and the rest of the world developed a big excess of Cabernet Sauvignon.
The combination of high quality and average yields in California's 2007
harvest is going a long way to bring Cabernet Sauvignon supply back into
balance with demand. Supplies will most likely continue to tighten over
the next several years because sales are growing rapidly, but there have
been very few new plantings to keep up with increasing demand," said Steve
Fredricks, Managing Partner, Turrentine Brokerage.
According to the "Grape Crush Report," Merlot fell 9%, the equivalent of
5.1 million gallons or 25.5 million bottles of wine. Sauvignon Blanc was
down 4%, which equals over 750,000 gallons or 3.8 million bottles of wine.
"Some wine critics are rough on Merlot, but American consumers love it
because it is generally a softer red wine, flavorful and easy to drink.
Sales have been growing at about 5% per year but winery inventories swelled
after a massive crop in 2005 and an above average crop in 2006. The 2007
harvest delivered the best possible combination: high quality, which
stimulates demand, and lower yields, which trim swollen inventories. The
Merlot excess could turn into a shortage over the next 12 to 24 months,"
said Bill Turrentine, President, Turrentine Brokerage.
Fortunately, while the tonnage produced was down for many varieties, newly
planted vineyards boosted production for Pinot Grigio which is the fastest
growing white variety in the United States.
"In good news for consumers, Pinot Grigio, an Italian varietal that does
exceptionally well in California, increased production in 2007. Pinot
Grigio increased by 3%, equal to over 400,000 gallons or over 2 million
bottles of wine," said Erica Moyer, Broker, Turrentine Brokerage.
Balancing supply and demand is always difficult in the wine business.
Consumer demand can change quickly, but vineyards change very slowly, with
a period of about four years from planting to first production. Mother
Nature also likes to keep things interesting by producing an unpredictable
sequence of huge harvests (like 2005) and lighter harvests (like 2004).
For the most part, the wine business was glad to see a moderate and high
quality crop in 2007. Consumer thirst for California wine, especially
premium wine, is very strong and California could soon move from the
problems of excess to the challenges of shortage.
While supplies are also starting to tighten up in the Interior regions of
California, average prices declined for several key varieties.
"Prices reported in the 'Grape Crush Report' declined for Chardonnay,
Cabernet Sauvignon, Merlot, and Zinfandel in the Northern Interior as
older, high-priced contracts ended and the grapes were resold at lower
prices. So far, however, demand for 2008 grapes is strong and prices are
inching upwards again. Competitive international supplies have tightened
but everyone is also keeping an eye on the economy and the weather," said
Erica Moyer, Grape Broker, Turrentine Brokerage.
About Turrentine Brokerage
Turrentine Brokerage (www.turrentinebrokerage.com), founded in 1973,
specializes in the strategic sourcing of wine grapes and bulk wine from the
major growing areas across the globe. Working with thousands of wineries
worldwide, and with over 1,500 growers, this experienced team has
negotiated transactions between buyers and sellers valued at more than $1
billion over the past decade.