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North Bay Business Journal

Monday, March 11, 2013, 6:20 am

Grape Market Insights: Postseason glow of the Super World Bowl grape harvest

42M bottles of ’12 Sonoma pinot, and vintners want it all

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    Imagine a year in which the San Francisco Giants don’t look that great, but to everyone’s surprise, they clinch their division, make it to the World Series — and win. Imagine that in the very same year the 49ers look pathetic then somehow get better, win their league and finally make it to the Super Bowl — and almost win.

    Grape Market Insights by Brian Clements, Turrentine BrokerageCombine all that baseball and football excitement, and you’d have the runup to the 2012 winegrape harvest Super World Bowl. The 2012 growing season started with lots of winter rain, which got the vines off to a healthy start. Bud break and set were unremarkable with most growers counting two clusters per shoot and commenting that the crop looked about “average.” I figured that an average of two clusters per shoot was on target for a medium-sized crop. But scorching summer heat or rain at harvest could still trim the tonnage or excellent weather could result in a large harvest despite the middle of the road cluster count.

    The spring weather was pretty nice. Early summer was great, kinda like signing Marco Scutaro, a pro with firepower. The weather coming into harvest was awesome, like discovering a kid named Kaepernick, from the University of Nevada of all places, who knows how to throw a football — and also can run.

    All in all, harvest in the North Coast of California was like getting a field goal, touchdown, home run and grand slam all in one play. The cluster count may have been average but the grape clusters were full and the berries keep getting bigger and bigger. When all was said and done, the North Coast crop was up a whopping 47 percent from the light harvest of 2011.

    Not only was the 2012 crop big, but the quality overall appears well above average, reaching to “superb” in some cases.

    Winemakers often associate low yields with higher quality, but it doesn’t always work that way. In 2005, for example, we had exceptional yields and mostly excellent wines, and 2012 appears to have duplicated 2005. But 2005 produced more grapes than the market wanted — some high quality fruit was left hanging on the vine. The bounty of 2012, in contrast, came after two light harvests and when consumer demand was starting to revive. Most wineries were delighted to get the extra volume.

    2012 Sonoma pinot noir tons crushed - Turrentine Brokerage

    Tons of Sonoma County pinot noir crushed (image credit: Turrentine Brokerage)

    Due to new acres as well as strong yields, Sonoma County pinot noir won the prize for the most remarkable jump in production, up 85 percent over 2011 and 52 percent over the five-year average. The total of 52,000 tons accounts for over 20 percent of the California pinot noir harvest and will produce nearly 42 million bottles of 2012 Sonoma County pinot noir.

    Those bottles will start appearing on store shelves as early as next fall and they will arrive just in time to meet the needs of consumers who are returning to high-end pinot noir. No winery owner I have talked to sounds worried about how to sell it all — they’re confident the market is there.

    What does the large 2012 crop of all North Coast varieties mean for long-term supply and demand balance? This is what I have seen:

    • Most of the time, when a harvest is unexpectedly big, tonnage over contract maximums is hard to move and usually sells at a big discount. This year, many wineries took it in happily, often at or near the full contract price.
    • After past big harvests, many wineries did not re-sign short-term contracts and often sent cancellation notices on evergreen contracts. That’s not happening much this time.
    • After past big harvests, the bulk market was flooded with excess wine and buyers disappeared. This time, more wine has come on the market — and bulk wine prices have retreated from last year’s highs — but many buyers are still active.

    Overall, I think rising consumer demand is pulling us down the path to relative shortage. The big 2012 crop will slow that process but not derail it. Even with some new acres coming into production, I’m guessing that next harvest will most likely drop back a little in total tonnage. Grape buyers are out kicking tires for most varieties and are hoping for lower prices. The inventory of uncommitted grapes for 2013, however, is low.

    Ultimately, the key player in this game is the consumer. If consumers keep trading up and buying more, well, we may win another World Series. Go Giants! Go 49ers! And go, go, go North Coast grape and wine business.

    Brian Clements is vice president and partner of Turrentine Brokerage (turrentinebrokerage.com), a Novato-based wine and winegrape brokerage.

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