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California North Coast farmers struggle as wineries cut growing contracts amid a grape glut

Amid the glut of wine grapes in the region, Sonoma Valley vintners have been notified by Gloria Ferrer Caves and Vineyards that their growing contracts will not be renewed because the renowned sparkling winery plans to refocus on its own estate vineyard.

The Sonoma winery, which went through an ownership change in 2018, will replant vines with clones from the Champagne region in France.

The move is similar to efforts other area wineries are taking, as they pare grape inventory following the record 2018 North Coast harvest and then the oversupply evident during last year’s harvest when tons of grapes remained on vines unsold. Furthermore, retail wine sales have flattened.

The implications of the actions by Gloria Ferrer and other winemakers, however, have caused ripple effects as grape farmers adjust and decide how to remain viable in a wine market with fewer buyers for their fruit.

“There are just too many grapes right now,” said Janet Sasaki, who for 18 years has grown exclusively for Ferrer on her 12-acre Sonoma vineyard. She was informed this summer by Gloria Ferrer winemaker Steve Urberg that the winery would not renew her grape contract when it expires at the end of the 2021 harvest.

Turning 80 this year, Sasaki does not know yet what she will do, beyond pondering the viability of grape growing under the tough market conditions.

“I really don’t want to grow hemp. It smells awful,” she said.

The contract cancellations also affected Bob Iantosca and his small Sonoma Valley pinot noir vineyard even though he had worked at Ferrer since its founding and he mentored Urberg, who took over winemaking duties from him.

“The new owners have made a decision that they are only going to use estate fruit,” Iantosca said of the German wine company Henkell that owns Gloria Ferrer.

Everado Robledo, CEO of Robledo Family Winery, said the 2019 harvest was his family’s last as a contract grower for Ferrer after almost 30 years, providing 10 acres of grapes for sparkling wines. “It does affect us. They paid a good rate and they always paid on time,” Robledo said.

The action was compounded by both Duckhorn Wine Co. and Constellation Brands Inc. also alerting Robledo in recent months they will no longer buy grapes. Robledo now is faced with taking up to half of its grapes historically sold to outside wineries for other use. In response, he has increased his tank space and will look to make wine for the bulk market, but that sector has been at oversupply, too.

“I don’t see another sparkling house that will take in those grapes,” he said of the grapes previously grown for Ferrer.

Gloria Ferrer made the decision to concentrate on growing its own grapes since it already owns 334 ?vineyard acres and wanted to improve the quality of that fruit, said Enore Ceola, CEO of Freixenet Mionetto USA, the North American division of German parent Henkell.

“We should refocus on those (grapes) to get them to the next level,” he said.

The effort will expand on the Sonoma winery’s planting of imported clones from the Champagne region, which began in the early 1990s in conjunction with research conducted by UC Davis, Urberg said. More than 8% of its estate is planted with these pinot noir clones and 4% with similar chardonnay clones. “They are the top clones they are using over there for Champagne,” he said of France.

The winery was founded in 1986 by the Ferrer family, which already were a large cava producer in their native Spain. They helped popularize sparkling wine within Sonoma County and, in particular, grapes grown from the Carneros region just north of San Pablo Bay.

In 2018, German wine company Henkell bought a controlling 51% interest in the Ferrer’s family business, Freixenet. Freixenet Mionetto USA now oversees Gloria Ferrer’s operations and importing wines from the conglomerate’s portfolio.

Ceola said he is impressed with the quality of wines produced by the Sonoma winery, which has a large inventory for future years.

Its wines also have been known for affordability among premium selections, where many of its wines are positioned in the $20- ?to $25-a-bottle range. Ceola declined to comment on the targeted future price point for Ferrer wines.

Jon Moramarco, a wine industry analyst, said Ferrer dropping vintner grape contracts is a reflection of the market oversupply of grapes, similar to the situation from 2000 to 2003. It likely will be exacerbated after Constellation Brands completes its $1.1 billion sale of the low-priced wines to E. & J. Gallo Winery, leaving fewer grape buyers in the marketplace.

The 2018 North Coast harvest reached a record of 588,864 tons of grapes picked in Sonoma, Napa, Mendocino and Lake counties - making it a $2 billion crop. That followed previous large harvests in the region.

Moramarco predicted a market rebound, noting that North Coast wineries typically grow about a third of their own grapes and have to rely on third-party farmers for the rest.

“There is an adjustment going on,” he said.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com.

On Twitter @BillSwindell.

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