North Bay Business Journal

So here we are at half-past spring in 2013. Frost danger is just about over. Both the bulk-wine and grape markets have been active, and tonnage available on the spot market is limited. Most vineyards are reporting two clusters per shoot, as seen last year at this time.

Are we caught in a “Groundhog Day” replay of last year? Well, no, we’re not. Here are two differences.

Growers are anticipating the 2013 Napa Valley winegrape season will begin with substantial emergence of vines from a winter nap in the last week of March, just ahead of the start of last year’s record crop, according to a major local trade group.

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. Combine all that baseball and football excitement, and you’d have the runup to the 2012 winegrape harvest Super World Bowl.

Winemakers often associate low yields with higher quality, but it doesn’t always work that way. The bounty of 2012, in contrast to that of 2005, came after two light harvests and when consumer demand was starting to revive. Most wineries were delighted to get the extra volume.

NORTH COAST — Many wine industry experts figured the 2012 winegrape harvest was going to be the biggest in several years and refill grower pockets after two smaller crops, but the first official tally of the crop released Friday suggests it was the biggest ever, even crushing the giant 2005 harvest in value and tonnage.

SANTA ROSA — While the 2012 winegrape harvest in Sonoma County appears to have been among the county’s largest ever, the market for grapes continues to be active early in the 2013 buying cycle, yet rising costs and uncertain ability to increase retail prices is crushing wine producer margins, according to industry supply and finance experts at a major seminar.

Brisk mergers-and-acquisitions activity for North Coast wineries, vineyards and brands in 2012 is expected to continue into 2013, even if the estimated huge size of the recent harvest moderates supply pricing underlying a number of the deals, according to the deal brokers.

More than half the 2012 North Coast winegrape crop is off the vine and most of the rest is expected to be arriving at wineries by early November.

Many North Coast growers and wineries were surprised to find the crops were much bigger than expected around the beginning of the season.

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.

We cannot forget the most urgent game of all: the race — often a marathon — to profitability. In the end, income must break the tape before expenses, and do so by enough margin to make a decent return on investment.

What makes the Grape Games interesting is that growers must engage in all three of these races at the same time.

After three straight years of harvests delayed and reduced by unwelcome weather, North Coast winegrape growers see signs of brighter prospects for a 2012 crop that could be, thankfully, average-sized and on time.

After a dozen years of winegrape excess statewide, the California wine business is headed into several years of tighter supply to slake growing global demand while competition and costs of production are rising, according to experts at the Business Journal’s 2012 Wine Industry Conference in Santa Rosa on Wednesday. …

The Sonoma County Board of Supervisors last week voted unanimously to roll back all but simplified registration provisions in the county’s Vineyard and Orchard Frost Protection Ordinance. …

F. Korbel & Bros., producer of Korbel sparkling wine, plans to sell the half-million-case-a-year Kenwood Vineyards brand and related assets to Banfi Vintners, one of the country’s major wine marketers. …

The McWilliams family, owners of Arista Winery with 36 acres of estate vineyards on Westside Road in Russian River Valley, purchased the 74-acre Martinelli Road Vineyard from the Martinelli family. …

Sebastopol-based mobile wine filtration services provider American Winesecrets teamed with Australia’s Diverse Barrel Solution Pty. Ltd. to operate the latter’s Phoenix high-tech barrel-restoration system starting in July. …

Longtime wine and spirits executive and entrepreneur Mike Kenton formed OFFbeat Brands to develop, find sourcing for and market high-quality, “eclectic” and different wine and spirit brands. …

Santa Rosa-based Provino, which evolved its wine telesales business into an outsourced direct-to-consumer marketing service for vintners, changed its name to VinoPro to reflect its move further in that direction and launched a technology services division to blend its DTC customer resource management software with popular wine business software package. …

Spring and summer are set to have more wine business seminars and training: Sonoma State University’s new Napa Valley expansion for the wine executive MBA program, Sonoma State University’s Wine Business Institute global wine business education conference, Vineyard Economics Seminar, Wine Industry Technology Symposium.

In this game, which is the real California Lottery, you’re going to need a four-wheel drive vehicle and you’ve got to get your boots muddy. There will be two kinds of mega-winners: Growers who have used this time strategically to build relationships with the best long term homes for their grapes and brand owners who have forged relationships with key growers that will allow them to respond to growing consumer demand with an ample supply of quality wine while maintaining a healthy profit margin.

ST. HELENA — After strong sales growth last year, U.S. makers of fine wine could see somewhat moderated growth this year as an improving domestic economy and shrinking supply of grapes and wine may allow planned luxury bottle price increases stick in the marketplace, while global economic problems together with an increasing supply shortage may boost imported wine sales for the next few years, according to a highly watched annual wine industry forecast released today.

Wine consumption is growing worldwide and particularly in the world’s new largest wine market, the U.S. Trouble is, shocks to the global economy and to the wine business in particular over the past several years along with tough growing seasons have dramatically limited the supply of grapes and wine sold in bulk to supply the thirst.

The Business Journal asked members of the 2012 Wine Industry Conference panel on grape and wine supply panel at the about some of the hotly discussed topics in the wine business in California.

After nearly 10 years of oversupply and low prices, California winegrapes and bulk wines are suddenly in a position of scarcity. Wineries are scurrying to find grapes and secure vineyard assets, while négociant wineries see their wine sources dwindling. How did we come to be in this situation, and what lies ahead for growers, wineries and consumers?

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.

Brokers, growers, grape buyers, winery financial execs and marketing wizards are all complaining about Mother Nature because she was stingy this last harvest.

NORTH COAST — The first official tally of the impact of the stormy 2011 winegrape season is in: North Coast vintners crushed 11.8 percent fewer tons last year than in 2010, and the value of the 2011 crop at nearly $848 million was 6.9 percent smaller than the year before, despite average per-ton prices rising 5 percent to 10 percent last year, according to preliminary state figures released today.

SACRAMENTO — The prices of wine on U.S. store shelves could start rising this year because of an “emerging shortage” of winegrapes and wine plus a sales and marketing “blitz” last year, according to experts speaking at a major wine industry trade event this morning.

SANTA ROSA — The tightest inventory of top varieties of wine available for purchase in bulk in a dozen years and a dwindling supply of those winegrapes could extend the rise in pricing for those fine-wine components into this year, but wineries are hard-pressed to pass those cost increases to consumers who are continuing to look for discounts, according to experts at a major local wine industry seminar this morning.