Experts: winegrape shortage to persist for years

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NAPA -- Not enough winegrapes have been planted in California, leading to a shortage of fruit for wine in the next several years, so growers and wineries should be actively working together to boost that supply, according to two major industry experts.

On Feb. 23, accounting firm Moss Adams LLP hosted a Wine Industry Financial Roundtable at the Napa Valley Marriott resort. The topic was "Shifting Strategies for Grape Sourcing." Featured speakers were Joe Ciatti, a prominent wine business broker with Zepponi and Company of Santa Rosa and former driving force of giant wine and winegrape brokerage Ciatti Co. of San Rafael, and Hugh Reimers, executive vice president and chief operating officer at Jackson Family Wines.

"A monumental change in supply occurred in January 2011," Mr. Ciatti said at the beginning of his presentation. "An excess of grapes has become a shortage."

He emphasized that the change is not due to short crops, as some believe: The past three years’ harvests were historically large, however decreasing year by year.

He noted that the 2011 winegrape harvest of 3.3 million tons was actually above average, even though it was less than the 3.7 million tons harvested in 2009 and the 3.6 million tons of grapes from 2010.

The problem is that growers have not been planting grapes.

New vines have represented about 4 percent of the total of 500,000 acres of grapevines in California for years, but about 10 percent of planting and replanting each year is needed to replace aged stock and satisfy growth in consumption. Wine consumption growth averaged 4.5 percent yearly for the past decade and is now projected to continue at 3 percent annually for the foreseeable future.

Mr. Ciatti predicted that the grape shortage would last six to eight years.Revolving cycle of shortage, excess

Large varietal plantings occurred for the first time in the 1970s across the state, Mr. Ciatti said. More plantings took place a decade later (particularly in 1983) of Chardonnay, Zinfandel (for white wine) and French Colombard in the Central Valley, and the North Coast counties of Napa and Sonoma replanted several vineyards.


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