Amid economic uncertainty, North Coast wineries await gauge of 2023 crop size

North Coast wine grape season growers and vintners are awaiting a key early sign of how big this year’s crop will be. They’re hoping that by mid-May they’ll have an advance look on the potential size of the region’s billion-dollar wine grape crop, a critical look for an industry that’s keeping a close eye on inflation and consumer demand in an uncertain economy.

Cool weather across the North Coast the first week of May put the brakes on rapid growth for the region’s wine grape vines during increasingly drier and warmer April days that followed a cool, wet winter. With a later season start this year, the growing season is shaping up to be closer to the norm over the past two decades, according to Christian Klier, North Coast wine grape broker for Novato-based Turrentine Brokerage.

“People in the past three years, due to the drought and the heat that we've seen, had gotten used to grapes coming out earlier, knowing what the crop looked like sooner and getting the grapes harvested sooner,” Klier said. “This year is not going to be that year.”

Leaves had started emerging from vines in the typically warmer North Coast appellations in the latter half of February in the 2020–2022 drought, but this year that first visible stage of development, called “bud break,” came later, in late March and early April.

By late April, vine shoots on the first vines to awaken from winter dormancy were 2 to 3 inches long, roughly three weeks behind the 8- to 10-inch shoot growth seen by that time last year, Klier said.

This puts the expectation for first emergence of flowers on the nascent clusters in the latter half of this month, followed by completion of self-pollination to start production of grapes by the beginning of June. That latter phase, called crop “set,” helps growers and vintners estimate crop size by how many berries per cluster could develop.

In warmer Sonoma and Napa counties, growers are seeing two and sometimes three emergent clusters per shoot on early-ripening varieties such as chardonnay, compared with one cluster per shoot at this point in the 2022 season, during the third straight dry year, according to Klier.

Russian River Valley grower John Balletto said he’s expecting to start seeing bloom the third week of May on his 850 acres of vines in the Santa Rosa Plain and Sebastopol Hills.

“Bunch counts are coming out looking pretty good,” Balletto said.

With the rain so far this year and vine roots down 10 to 12 feet, Balletto doesn’t anticipating having to start irrigating until June or July, compared with starting in March during the drought.

“You’ve got to make sure there's water down there, because if (the vines) start coming out and they're searching for water, you're gonna stunt the growth, like during the drought years,” Balletto said.

The vine-growth pace this year is slower in the cooler North Coast areas of Mendocino and Lake counties, where bud break is just getting started, Klier said.

“Growers are concerned about a later season, but (the vines) can make that up with one or two weeks of hotter weather,” Klier said.

While the North Coast has made it through the winter and into spring with just a few freezing nights and limited frost damage, the specter of hail in the forecast for the first week of May was unsettling for some.

“I hope we don’t get that,” Balletto said.

Hail and frost can damage tender shoots and sensitive flowers, as inclement weather around crop set can also limit the resulting crop. The term for clusters with blooms that fail to become berries is called shatter.

Until crop set in the North Coast helps with rough estimates of resulting tonnage at harvest this fall, purchase contract deal-making has been slow, Balletto said. Heat spikes, like what happened just before harvest last year, can significantly impact tonnage.

“Wineries right now put the brakes on purchasing and are slowing things down, maybe because of possible recession in the future,” he said. Earlier this year, Balletto reached purchase deals for chardonnay, pinot noir, and sauvignon blanc grapes.

Only 10% of the grapes Balletto’s company farms go for the family wine label, producing 30,000 cases annually. The rest is sold to 40 wineries, with 10% on one-year contracts to give customers flexibility, 60% on two- to three-year deals and 20% for longer than three years.

Glenn Proctor, partner of San Rafael-based grape and bulk-wine broker Ciatti Co., said Napa Valley cabernet sauvignon continues to have the most active demand and price stability from wineries looking for North Coast varieties. Chardonnay largely from Sonoma County and Russian River Valley pinot noir also have had demand so far this year, but buyers are more hesitant based on price and need, Proctor said.

“With what’s going on with the economy and the threats of recession, plus some information that (direct-to-consumer wine sales) are not as strong and (sales for) off-premise (consumption) have issues, the news out there is choppy,” Proctor said. “Nobody is going to bet heavy and/or commit unnecessary resources at this point before they have a better idea of what's going on.”

In addition to crop size, part of that analysis involves for vintners the ability to increase bottle prices without sacrificing sales volume or market share and for growers the likelihood of recouping rising costs for fuel and labor with higher grape prices, Proctor said.

Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.