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16 WINES&VINES August 2018 in their tanks and barrels. They are less eager than last year to commit to more grapes and/ or higher priced grapes for 2018, according to several well-informed sources. "We're in a time of change and adjustment," said Glen Proctor, partner and broker in the Ciatti Company and a former winery grape buyer. "Premium wine is not showing the strength it once did as an overall category. Starting around last harvest we're seeing some change. Price had been able to grow, but not so much now." Grape prices had risen generally in areas suitable for wines retailing at about $15 and higher. The weighted average grower return per ton in Monterey County, for example, rose by 8% to $1,413 from 2015 to 2017, according to the California Grape Crush Reports, and for Sonoma County the average grower return rose 15% in two years to $2,767. Proctor said the squeeze at retail means wineries can't maintain their margins if they keep paying more for grapes that go into wines stuck at certain price points. Adding to their resistance to higher grape prices is a currently strong supply of bulk wine. "We're seeing a bit of a stall from the buyer side. The competitors are not chasing it. It's not just big guys but the smaller wineries, too. I am getting more calls from growers who say, 'I've got grapes avail- able, do you have a buyer?' On the other hand, wineries are saying, 'My finance department won't let me buy.'" Besides the wait-and-see tactic, some winer- ies with full tanks have become sellers of bulk wine rather than buyers to manage the margin challenge. One move that Proctor has seen re- peatedly is a winery selling off bulk wine from the more expensive coastal counties and buying bulk or grapes from lower-priced interior re- gions. They then blend in as much as they can to keep a Sonoma County or North Coast AVA on the label, or transition the brand to the low- est common denominator California AVA. The Ciatti Company's latest newsletter ad- vises, "Sellers can unload small lots of wine at the current prices, but those wishing to move large volumes must consider discounting their price. This is when opportunities could arise for buyers." Weather cooperating Affecting the likely timing of the harvest were spring rains and somewhat cooler tempera- tures than usual in the early part of the growing season, setting up expectations of a later than average start, at least in the coastal counties. Stapleton, at Francis Coppola winery, said the season is tracking seven to 10 days behind last year, and has been reading that a wet El Nino weather pattern may potentially settle in be- fore the year is over, so he is watching the weather closely. Dave Michul is the viticulturist who manages Beckstoffer Vineyards' 1,000-plus acres of wine grapes in Napa Valley. "Things look really good here," he said. "the vines are very uniform. Char- donnay looks less uniform, with some hens and chicks (variations in berry sizes). It was a little bit longer bloom than usual but Cabernet looks really good and Merlot looks really good. Growth was really good this spring. We had plenty of it and the April rains helped. Hopefully things will keep on par and we can finish the season without any more drama." —Jim Gordon WINE INDUSTRY NEWS QST offers its clients……. Professionally fabricated stainless tanks 35 years of tank fabrication experience Performance & reliability guarantees Custom designs & modern features Quick & competitive tank project pricing On site tank repairs & modifications Special application tanks of all sizes "In stock tanks" from 500 to 10,000 gallons 510 Caletti Ave. Windsor, Ca. 95492 Phone 707-837-2721 or Toll-Free 877-598-0672 www.qualitystainless.com Company Website winetanks@aol.com email contact/sales info Custom Fabricated Tanks for the perfect size & fit… or Ready to Ship "Stock Tanks" Either way QST is ready to assist our clients! Call QST today for information or pricing! QUALITY STAINLESS TANKS As U.S. wine sales deceler- ated from a 5% growth rate in June 2017 to less than 1% growth in June 2018, some larger wineries have more than adequate inventories.