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Wednesday, February 10, 2016
February 10, 2016 | 4:00 PM

The California Agricultural Statistics Service released the preliminary 2015 crop report today, confirming that yields fell in 2015 after the record harvests of 2012, 2013 and 2014. CASS said the 2015 wine grape crush totaled 3.7 million tons, down 5 percent from 2014 – the lightest crop since 2011. The overall figure was right in line with industry estimates.

Here are ten takeaways from the preliminary report:

1) It was a tale of two markets: Prices rose in the Coastal areas, as expected, but average prices fell state-wide

CASS said the average price for all varieties was $667.31, down ten percent from 2014, even if prices were higher in Coastal areas, The decrease in overall price was driven by lower demand for grapes from the Central Valley, where 79 percent of California’s wine grapes were crushed in 2015.

“We thought (pricing) would be off 5 percent overall, but being off 10 percent from last year was disappointing,” Allied Grape Growers President Nat Dibuduo said.

2) The above $10 category is growing, yet that’s where yields were short

With Coastal Cabernet and Pinot Noir yields down, wineries could find themselves scrambling to keep up with price increases.

“The real story from the 2015 winegrape crush remains the shortness of the coastal crop and respective varieties grown heavily in those regions, such as Chardonnay, Pinot Noir and Cabernet Sauvignon,” Allied Grape Growers said in a statement.

Because of poor weather during bloom, grape cluster weights were down in Sonoma County, adversely affecting Chardonnay and Pinot Noir in particular. Brian Clements from Turrentine Brokerage noted that Sonoma County Pinot Noir was down 36 percent off of the five year average, and that Sonoma Chardonnay down 27 percent.

“We had a light crop where we needed it most,” Steve Dorfman of the Ciatti Company said. “It’s like the old Randy VanWarmer song, Just when I Needed you Most. Where we needed the volume was on the Coast and we didn’t get it.”

3) Premium brands May see Challenges Meeting Supply Requirements

Premium brands that were built on larger harvests, 12, 13, 14, with coastal appellations were sometimes challenged to secure supply during the 2014 harvest. “We feel this harvest is a bellwether event to determine how and where these brands go forward from here,” Dorfman said.

4) The Lighter Crop is Helping Balance the Market

Industry observers expected to see a lighter crop in Coastal areas and a more “normal” sized crop in the interior and the report confirms that’s what happened.

“We knew the lighter crop had balanced people’s inventories out because of the way they came back to the market in the second half of the year,” Turrentine Brokerage president Steve Fredricks said. “The bulk wine market picked up for the varieties that were most in demand: Cabernet Chardonnay, and Pinot Noir in Coastal areas.”

5) Chardonnay Down by 6 Million Cases

On a negative or positive note, depending on one’s perspective, 2015 brought the lightest crop of Chardonnay since 2011, down 11.8 percent – equivalent to six million cases. “This is helping to erase the last few years of surplus, especially in the coastal regions, so it really brings Chardonnay back into balance,” Ciatti’s Dorfman noted.

6) Napa is its Own Thing

Napa is really its own thing, driven by Cabernet Sauvignon, where the district average price rose to a whopping $6,244 a ton – a $400 per ton, or 7.5 percent increase while overall Cab tonnage in Napa fell by 29.8 percent (Sonoma Cabernet Sauvignon tonnage fell down 29.1 percent while prices rose 4.9 percent, averaging $2,642 per ton).

7) Sauvignon Blanc is Tight

Sauvignon Blanc is in demand, though the overall volume crushed fell by 20 percent. In Napa and Sonoma Sauvignon Blanc was down 28 and 30 percent respectively. Wineries in those regions have been sourcing additional grapes from Lake County and Mendocino, where demand also outstrips supply.

8) More Pinot Grigio Coming Online

The most recent Allied Grapegrowers nursery survey found that Pinot grigio was the white grape that was most planted last year.

Pinot Grigio yields increased by about two percent statewide with new acreage coming online. Additional plantings may be needed: imports continue to come from Australia, Italy and Chile.

9) Tonnage was flat in the northern interior part of the state.

“Northern Interior production was 2 percent down from last year, bolstered by new acres and a better Chardonnay crop than 2014,” Erica Moyer, with Turrentine Brokerage said.

10) The short harvest wasn’t drought related

When people talk about the crop being down in coastal areas such as Paso Robles, there may be concerns about drought. “Our feeling in looking at the harvest and the season leading up to it is that it was probably more set-related than drought-related,” Dorfman said.

 

Monday, February 1, 2016
February 1, 2016 | 11:32 AM

Wine Business Monthly's February 2016 digital edition is now available.

Inside February 2016 you will find:

A Review of the Industry from the WBM 30
Cyril Penn talks with executives from the largest wineries in the U.S.

plus

  • Our list of the 2015 Hot Brands
  • The Number of Wineries in the United States Reaches 8,702
  • Canadian Wineries Report Steady Growth Despite Strong Import Competition

Click here to subscribe to WBM

February 1, 2016 | 7:47 AM

 Graham Tatomer of Tatomer Wines comments on "Wineries: Beware of Shipping Scam to Fiji"

This guy attempted the same thing from me, but I didn't bite. Also, just today, I received a very similar offer from kenadam0312@gmail.com with the subject line:

MAIL ORDER TO TRINIDAD AND TOBAGO

Looks like the same scam.

Friday, January 29, 2016
by Cyril Penn | January 29, 2016 | 7:23 AM

Wine Industry Symposium Group, creator of the Wine Industry Financial Symposium, the Vineyard Economics Symposium, the Central Coast Insights conference, and the recently launched Lodi Vineyard and Wine Economic Symposium, announced this week that it plans to transition its management to Wine Communications Group, publisher of Wine Business Monthly and winebusiness.com, and producer of industry conferences and tradeshows.

Wine Industry Symposium Group was founded in 1992 by a group from the wine community interested in improving communications with the financial community. David Freed and Kathy Archer continue to offer a forum for members of both communities to share their views on a range of wine and financial topics. The Financial Symposium celebrates its 25th anniversary in 2016.

Freed is chairman of Silverado Wine Growers and Silverado Premium Properties, privately held real estate investment funds with more than 10,000 acres of vineyard holdings in California, selling grapes to more than 100 wineries.

WBM: How did you start the Wine Industry Financial Symposium?

DF: We had attended a CPA wine industry conference and didn’t feel it really got to the depth of some – actually Jim Verhey and myself – we were driving back from Santa Rosa, and thought – we should do a conference that focusses more on the wine industry:

At that time, the savings and loan crisis was in full bloom and the regulators were running around to all the banks, checking the files and forms and whatnot – and a couple of wineries had their lines of credit yanked. Richard Arrowood was one – and the gentleman behind the winery at that time called Grand Cru in Kenwood. It was sort of a pattern with the larger banks at the time. They had personal relationships with wineries and maybe the documentation wasn’t all that it should have been, and, all of a sudden, lines came up for renewal, and they said, ‘No.’” You’re an operating winery and you just assume that if you pay your payments, everything’s fine: well, it got pretty nasty with the banks saying, you didn’t comply with the banking regulations and the wineries saying, “Hello, I’m in the wine business – I leave that stuff to you.”

That was the impetus. It was a reaction to a breakdown in communication between the banks, and our industry – mostly the wineries.

The goal was to create an environment where the bankers could express their needs and their views while the folks in the wine industry could express their needs. At that time, in the early 1990s, they didn’t have computers, they didn’t have spreadsheets, and they didn’t have payables and receivables. It was pretty primitive and a lot of players came in through the wine side or came in through the grape side. It wasn’t like there were a bunch of CFOs – a lot of it was family operations.

Our industry at that time had a LOT to learn financially and in terms of how to run our businesses, and we had enough credibility that we were able year one to get Bank of America – to get Wells Fargo – and to get Farm Credit. The financial symposium was sponsored by the major banks and the major financial institutions. For the most part those early sponsors have continued to this day.

That was the philosophy and is the focus - something Kathy and I hope can be maintained – an opportunity for the bankers to come and catch up and find out what’s going on in the wine industry; and for wine industry people to talk to bankers and have an array of bankers to talk to, to get their feedback and council on how to run their businesses better.

For the most part we’ve really accomplished that. By having a financial forum, a lot of deals have gotten done, a lot of bankers have met clients, and a lot of wineries have met bankers, and a certain amount of M&A has evolved – where people once a year come together and have a chance to meet and to talk. We have people that come year-after-year-after-year – and some have been coming for 25 years.

WBM: What are bankers thinking right now?

DF: There’s competition for our business. Rates, even though there’s been one bump from the feds, are relatively low. It’s been 3 or 4 very good years with good harvest and good demand in our part of the market, so things are very, very, good right now. A lot of people have lines of credit and cash, and they’re not anywhere near fully borrowed. A lot of grape growers and property owners have been acquiring new properties – with wineries tying up new properties to assure their supply and assure they can control their grape costs. It’s a pretty good time for the industry.

WBM: Has credit loosened up? If you need it it’s harder than if you don’t need it.

DF: That’s the golden rule in any industry. One measure: you don’t read a lot about Chaper 11’s or foreclosed properties – except for the aberrations. Vineyard prices are at all-time highs and the larger wineries – starting with Gallo have been on an acquisition tear. I don’t know what this blip in the stock market is going to do but we’ve had some pretty good times.

WBM. Can you tell us about the new Lodi event?

DF: Some good people there have been supporters over the years and are looking for more communication among themselves. It’s a chance for the region to get together with financial and other service providers.

WBM: And you’re staying involved with the Financial Symposium?

Kathy and I are committed to be involved for the next three years and hope to provide commentary and guidance. We feel very good about it. We had a meeting in Napa with 20 members of our advisory board and presented them with a memorandum about what we were attempting to do (with Wine Communications Group), put it to a vote, and got a unanimous yes. That was important to us.

WBM: It’s hard to imagine the show without you

(Laughter). That’s kind. What I’m most proud of is that this has all been with volunteers. We’ve had some great speakers and some great panels, and the advisory board of 20 people that comes to these meetings. It doesn’t happen too often that you can have that continuity.

WBM: Where are you focusing your energy?

We are putting energy into a scholarship fund based in Napa to help young people access a four-year university education, with some preference – it’s not required -- to people whose parents work in the wine industry. We call it Fruit of the Vine, and it’s administered by the Napa Valley Community Foundation.

My wife and I went to Berkeley in the 1960s. Tuition was like $47. I went on to law school at Berkeley for another three years: tuition was $75. That’s how we think it should be - college education for people who are deserving. You give back to your community. We've stayed local and think we’ve given back.

The Fruit of the Vine Scholarship Fund benefits graduating Napa County high school seniors who plan to attend a four-year college/university and will find the cost of higher education a financial hardship. Previous recipients who are currently attending college are eligible to apply again in subsequent years. The application deadline is March 1. Click here for more information, including guidelines

Wednesday, January 27, 2016
January 27, 2016 | 6:13 PM

Jon Fredrikson addresses the Unified Wine & Grape Symposium Wednesday. Fredrickson reported that table wine shipments rose 2 percent during 2015. He also warned the craft beers are cutting into wine consumption. Fredrickson named Michael-David Winery the Winery of the Year.

 

Tuesday, January 26, 2016
January 26, 2016 | 8:14 AM

Every year, when Wine Business Monthly creates our annual list of Top 10 Hot Brands, we look for vintners, growers, wineries and wines that are making a statement in our industry. Quality is always an important consideration, but Hot Brands is more than a list of the “best” or most interesting wines we’ve tasted during the year. Some of the common threads with this year’s list: people who had an idea, went for it and made it happen; industry veterans with vast experience doing something extra special on the side; and though this isn’t usually a drum we typically beat, some of the winemakers on this year’s list are proponents of what one might call “non-interventionist winemaking.”

Ultimately, this list is comprised of wines that we here at Wine Business Monthly would serve to winemakers. Indeed, that’s exactly what we do, as each of these wineries was on-hand to serve their wines to winemakers, grape growers and industry members at our annual Bottle Bash party at the Unified Wine & Grape Symposium in January.

We are releasing the Top 10 Hot Brands in alphabetical order, one per day, leading up to the Unified Wine & Grape Symposium (the first Hot Brand was released January 13). Wine Business Monthly will be serving these wines to winemakers, grape growers and industry members at our annual gathering Bottle Bash during Unified on Tuesday, Jan. 26 at cafeteria 15L.

White Girl Wine

White Girl Rosé 2014
Making Sure the Hamptons Never Run out of Rosé

Whether it’s a fad or an outright trend still isn’t clear, but Rosé is definitely seeing increased popularity. Big time. Sales are up. Big wineries have been starting new Rosé programs and looking to bring in Rosé from France. We continue to see coverage of Rosé in the popular press and are now regularly reminded that Rosé isn’t just for women—men drink Rosé, too. In fact, in the summer of 2015, it was reported that restaurants and wine shops on Long Island were dangerously low on local favorite Wölffer Estate and were short on the imports too. As the New York Post put it at the time,

“The summering hordes have been tirelessly swilling all season long.” Josh Ostrovsky (known as “The Fat Jew” to his 7 million followers on Instagram), David Oliver Cohen and Tanner Cohen got together and declared that never again would the Hamptons run out of Rosé. Really. They’ve embraced the Brosé movement.

The full story on White Girl Rosé ~ and all our Hot Brands ~ will be available in our February 2016 issue of Wine Business Monthly. You can come by our booth (#1620) at Unified and pick up a copy or click here to subscribe to WBM.

Monday, January 25, 2016
January 25, 2016 | 9:51 AM

Across the newsdesk this morning is a fantastic opportunity from Andy Beckstoffer:  

Can the Red Hills of Lake County, CA produce a collectible Cabernet that rivals its more famous neighbor Napa Valley? When legendary grape growers, Andy and David Beckstoffer of Beckstoffer Vineyards say they believe that the next great Cabernet Sauvignon wine growing region is the Red Hills of Lake County, CA, they’re willing to back that statement with a grape giveway. For the past 20 years, the Beckstoffers have been focusing time, vineyard development and resources to their Amber Knolls Vineyards in the Red Hills. Now they’re ready to take it to the next level by offering a low risk, high reward opportunity to winemakers and aspiring winemakers to put Red Hills Cabernet Sauvignon on the ultra-premium wine map.

The OpportunityThe Beckstoffers will offer 10 eligible winemakers one acre from their Amber Knolls Vineyards, an estimated 3.5 tons of fruit, for the next three harvests free of charge. They’ll back the winemakers by farming their selected acre to the criteria of Beckstoffer Vineyards’ famous Heritage Vineyards of Napa Valley with customizing canopies, carefully monitoring soils and moisture, and tailoring crop loads to optimize fruit quality. Each chosen winemaker will be requested to follow a specific ultra-premium protocol in winemaking to create their vineyard-designate Amber Knolls Cabernet Sauvignon and, after the three-year free of charge program, be invited to enter into a long term contract to continue to purchase fruit for their vineyard-designate wine.

Widely recognized for their uncompromising farming practices and dedication to the stewardship of the land including the six Heritage Vineyards of Napa Valley, the Beckstoffer name has become synonymous with the highest quality vineyards in Northern California wine growing regions including Napa Valley, Mendocino County and the Red Hills of Lake County. It’s the latter where the Beckstoffers believe that success will be where preparation and opportunity meet – that in the right winemaking hands, fruit from their Amber Knolls Vineyards will produce an elegant, possibly even collectible Cabernet Sauvignon. Is the Red Hills of Lake County the next winemaking frontier?

To learn more about the grape opportunity and Beckstoffer Vineyards’ Amber Knolls Vineyards, please click here.

Upcoming milestones:

  • February 15, 2016: Application deadline (cover letter and resume) for interested winemakers. Apply atinfo@beckstoffervineyards.com
  • March: Estimated bud break for Amber Knolls Vineyards, Red Hills
  • March 15, 2016: Winemaker interviews completed by Andy and David Beckstoffer
  • April 1, 2016: 10 selected winemaker contracts awarded; date announced for acre selection at Amber Knolls Vineyards
  • April 1 – May 1: Chosen winemakers invited to Amber Knolls Vineyards for acre selection
  • Mid-September: Estimated Cabernet Sauvignon harvest at Amber Knolls Vineyards
January 25, 2016 | 5:14 AM

Every year, when Wine Business Monthly creates our annual list of Top 10 Hot Brands, we look for vintners, growers, wineries and wines that are making a statement in our industry. Quality is always an important consideration, but Hot Brands is more than a list of the “best” or most interesting wines we’ve tasted during the year. Some of the common threads with this year’s list: people who had an idea, went for it and made it happen; industry veterans with vast experience doing something extra special on the side; and though this isn’t usually a drum we typically beat, some of the winemakers on this year’s list are proponents of what one might call “non-interventionist winemaking.”

Ultimately, this list is comprised of wines that we here at Wine Business Monthly would serve to winemakers. Indeed, that’s exactly what we do, as each of these wineries was on-hand to serve their wines to winemakers, grape growers and industry members at our annual Bottle Bash party at the Unified Wine & Grape Symposium in January.

We are releasing the Top 10 Hot Brands in alphabetical order, one per day, leading up to the Unified Wine & Grape Symposium (the first Hot Brand was released January 13). Wine Business Monthly will be serving these wines to winemakers, grape growers and industry members at our annual gathering Bottle Bash during Unified on Tuesday, Jan. 26 at cafeteria 15L.

Sonoma Collection, District 3 Wines

Sonoma County District 3 2013 Red Blend
Beyond Vineyard Management, a Unique Partnership

Ned Hill owns La Prenda Vineyards Management in Sonoma County, and Matt Stornetta is his operations manager. La Prenda farms more than 900 acres of estate properties for Parmelee-Hill Wines & Vineyards, Rams Gate Winery, Schug Carneros Estate, Nicholson Ranch, Hanna Winery, Roche Winery, Bennett Valley Cellars, Patz & Hall and many other independent growers.

In 2010 and 2011, with an oversupply of uncontracted grapes on the spot market, some growers opted to crush their wine, hang onto it and sell it later in bulk. It was a way of hedging, hanging onto the inventory to get a better price later.

Stornetta and Hill realized they needed to do more for grower clients than just manage their vineyards. Aside from helping them produce winemaking grapes, they could help them sell their grapes. They started helping their growers take unsold portions of their vineyards to make wine then sell it on the bulk market. By 2013, that service got them to thinking of a new way to work with growers. They took it a step further by releasing their own wines: They’d find a winemaker, secure a winery and make and market the wine themselves.

The resultant wines are called District 3, made by consulting winemaker Alex Beloz. There’s a Pinot Noir, unoaked Chardonnay and a Red Blend, which we’ve chosen as a Hot Brand. All three wines retail for less than $20, a choice the partners have actively made.

The full story on Sonoma Collection ~ and all our Hot Brands ~ will be available in our February 2016 issue of Wine Business Monthly. You can come by our booth (#1620) at Unified and pick up a copy or click here to subscribe to WBM.

Friday, January 22, 2016
by Cyril Penn | January 22, 2016 | 1:00 PM

Allied Grape Growers just released its latest Newsletter, offering a quick glimpse into the 2016 Nursery Survey as well as a preview of what to expect during next week’s discussion of the “state of the industry” during the Unified Wine & Grape Symposium.

Some of the top findings of the nursery survey are that red varieties are still predominant, with Pinot Noir being the primary variety being planted, followed by Cabernet Sauvignon and – this one surprised me - Petit Sirah coming next. Chardonnay plantings have cooled and Pinot Grigio appears to be the white grape that was most planted this year.

Even while considerable planting is going on, mostly in Coastal regions, vines are being removed in the Central Valley. Allied estimates that 10,000 acres have already been removed since the 2015 harvest.

From the report (page 6):

The bottom line is that, following the 2015 crop, we will still need to remove about 36,000 acres from the central and southern valley in addition to the equivalent of any new acres coming into production from 2016 and on (which are very minimum, based on lack of planting since 2013). If we were to see one more year (2016-2017 winter) of pullouts at the rate we have seen since 2014, the 2017 Central Valley winegrape market may be healthy once again

Read the entire report here


 

January 22, 2016 | 12:11 PM

Here’s an interesting announcement to hit the wires today: Landmark Vineyards is buying Hop Kiln Vineyards from an investment group.

Landmark was purchased a couple years ago by a company controlled by Stewart Resnik, who has a net worth of $4.3 Billion according to Forbes. I’ve been wondering what Resnik would do to be disruptive in the wine business ever since he purchased Justin Vineyards, and then Landmark.

The Resniks are behind the whole pomegranate craze, among other things. They recently renamed their company, formerly known as Roll Global. Now it’s “The Wonderful Company.”

One interesting thing The Wonderful Company did after getting into the wine game was to quickly become the largest supplier of grapevines to the California Wine Industry, purchasing Vintage Nurseries, then Mercier.

“We’re excited because it’s such a landmark property,” The Wonderful Company’s vice president of marketing Clarence Chia said of the Hop Kiln purchase. “It’s a nice addition. Our hope is to grow our current luxury portfolio.” I asked if more acquisitions would follow. “We’re always looking,” Chia said.
 

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