When you play the slots in Vegas, you pull the handle and hope that three symbols line up. If so, bells start to ring and lights flash and money comes gushing out of the machine. Well, it is still early to tell for sure, but the great slot machine of the 2012 North Coast harvest is lining up with: good quality, good yields, good demand.
Given that demand is strong because of increasing consumer demand, it really doesn’t get much sweeter for growers or wineries. Ding, ding, flash, flash, cash, cash.
Many vineyards in the North Coast this year had two grape clusters per shoot, and this indicated the likelihood of an average crop load. With the mild summer, however, the berries kept sizing -- getting larger -- and the crop has begun to weigh in significantly above average. This has certainly been the case for chardonnay and pinot noir harvested for both sparkling and still-wine programs.
At the writing of this article, about 40 percent of the North Coast crop has been harvested, with yields averaging around 10 percent to 20 percent over projection. In most cases, wineries are accepting deliveries that are over the tonnage specified in their contracts. In a few cases, however, vintners are asking growers to sell the "overage" elsewhere. So far, we have been able to sell the extra tons at prices mostly in the range of 10 percent to 20 percent lower than the prices paid for contracted tonnage on the spot market.
With increasing -- although still price-sensitive -- consumer demand and considering last year’s light harvest and the low inventories of bulk wine, a bigger crop is good news for just about everyone, from grower to winemaker to marketer to retailer to restaurateur to consumer. Growers have more tons in a market that wants more tons. Wineries can replenish inventories and perhaps even average down their cost of goods.
Last year’s rapid jump in bulk-wine prices may well ease a bit, and the grape market may be somewhat less frantic, but the long-term trend is still in place. Consumption is increasing, and planting for the most part is barely keeping up with replacement requirements. Global competition will continue to capture market share, but few places in the world have planted much acreage in the last few years of worldwide excess supply.
The proprietary chart accompanying this column shows that the amount of North Coast wine listed by Turrentine Brokerage for sale in bulk is up from last year but is still below the levels for several years before that. And casegood sales continue to grow.
Markets aside, harvest is always awesome for me: Leaves turning yellow and red as vineyards finish the job of ripening delicious grapes to optimal sweetness. The bounty of nature, encouraged, preserved and perfected by the diligent grape growers, now picked and delivered to the eager winemaker.
Best of all, it seems the reels on the North Coast one-arm bandit have lined up, and growers and wineries winning big. Cheers!...
Brian Clements is vice president and partner of Turrentine Brokerage (turrentinebrokerage.com), a Novato-based marketer of winegrapes and bulk wine in California and abroad. The company produces proprietary data on global markets, bearing and nonbearing acres, projected tonnage for the next five years, bulk wine inventories, spot market grape prices and collateral value trends.