Wines & Vines

March 2015 Wines&Vines 15 wine industry news S acramento, Calif.—After two boom years, Cali- fornia's wine grape har- vest shrunk 7.9% to 3.91 million tons, following the record 2013 crush of 4.25 million tons. The USDA's National Agri- cultural Statistics Service released the Preliminary Crush Report on Feb. 10, revealing interesting trends but few real surprises for wine industry professionals who study the wine and grape markets year-round. "Red wine varieties accounted for the largest share of all grapes crushed, at 2,134,995 tons, down 11.7% from 2013," the report stated. "White wine variety crush totaled 1,775,183 tons, down 3% from 2013." Perhaps reflecting the reduced harvest, red wine grapes drew an average of $883.45 per ton, up 3.6% from 2013; white wine grapes, on the other hand, aver- aged $588.30 per ton, down 5.6% from 2013, statewide. "In 2014, Chardonnay contin- ued to account for the largest per- centage of the total crush volume with 17.2%. Cabernet Sauvignon accounted for the second leading percentage of crush with 12.3%," according to the report. For reporting data, California is divided into 17 districts. District 13 (Madera, Fresno, Alpine, Mono and Inyo counties, as well as Kings and Tulare counties north of Ne- vada Avenue) had the largest share of the state's crush, with 1.36 mil- lion tons. The average price per ton in District 13 was $305.69. Not surprisingly, North Coast districts raked in the highest prices for wine grape varieties: Napa County (District 4) pocketed an average price of $4,064.95 per ton, up 10% from 2013. Cabernet Sauvignon from this district aver- aged $5,930 per ton in 2014. District 3 (Sonoma and Marin counties) received the second- highest return of $2,313.82, up 3% percent from 2013. Statewide, the 2014 Chardon- nay price of $858.26 was down 1% from 2013, but the price of Cabernet Sauvignon ($1,412.92) was up 5%. The average price for Zinfandel dropped 5% in 2014 to reach $621.84, while the average price for Merlot was up 2% from 2013 at $771.21 per ton, accord- ing to the report. Syrah prices were down $17.81, to $751.80 per ton. Petite Sirah was down $6.47 to $1,054.73 per ton. Other popular white wine grape varieties remained stagnant or reduced in tonnage: Pinot Gris/ Grigio grew slightly: 181,800 tons in 2014 vs. 178,887 tons in 2013; Sauvignon Blanc accounted for 110,146 tons vs. 127,679 tons in 2013; Viognier fell to 24,488 tons after totaling 28,157 tons in 2013, and despite its vaunted resur- gence in the popular market, Mus- cat Blanc showed just 39,928 tons were harvested (in contrast to 48,476 the previous year). At 159,857 tons, Muscat of Alexan- dria was up 27.4%. Pinot Noir, Merlot and Syrah all lost tonnage in 2014: Pinot Noir logged 249,962 tons in 2014 vs. 259.897 tons in 2013; Merlot plummeted to 219,034.3 tons vs. 273,390 in 2013; Syrah fell to 113,602 vs. 2013's 132.568 tons statewide—although Napa County tonnage increased, according to Steve Fredricks, president of Tur- rentine Brokerage. Grenache (Garnacha) produc- tion fell from 65,800 tons in 2013 to 52,671 tons in 2014, while Pe- tite Sirah edged up to 20,671 tons vs. 18,246 in 2013. Turrentine Brokerage's Fred- ricks told Wines & Vines he found little of surprise in the report. "Perhaps most interesting is the decrease in red grapes," he said, noting that much of that was rep- resented by Zinfandel, and "a lot of that is crushed for white Zin." While the Chardonnay crush was down 27,000 tons in the Lodi region, "People had good crops, still above the five-year average," he said. He also sees growth in the $10 per bottle and up premium market. "We'll be able to produce good $10 bottles for satisfied cus- tomers," he said. Glenn Proctor at the Ciatti Co. commented, "In the end, it ap- pears to be a very healthy crop, the third in a row. In 2011 the industry was tight, but we've re- plenished our inventory." He re- called that in September 2014, "We had 33 million gallons in bulk, a historical high. There is significant inventory on the mar- ket today." The least demand was for Syrah. "Syrah is used mostly in coastal wines as a blending wine," Proctor noted. When Ciatti asked coastal vint- ners what variety they needed most, the answer was Cabernet Sauvignon. The Crush Report showed that Cabernet Sauvignon in District 8, which includes Paso Robles, averaged $1,463 per ton. Cabernet is rarely used as a blending wine, especially in coastal wines, and it's hard to find in bulk; "Merlot is more often used in red blends," which have also seen ris- ing popularity in recent years. Proctor sees increased activity in case-goods sales. "Sales appear positive for cased goods in the $12-$15 (per bottle) price range, especially for Napa and Sonoma County wines," he said. Proctor observed that bottle sales at the $9 per bottle "everyday" category have decreased in volume. He sug- gested that consumers might be moving up to premium wines. Imbalances of inventory and demand in California's interior growing regions will probably af- fect grape and bulk sales, Proctor predicted. He noted that agricul- tural land is growing in value; farmers with increased equity in the Central Valley are looking at profitability. Some 25,000 to 40,000 acres of grapes are being pulled, as landowners move to almonds, he said. NASS' final report is scheduled for release March 10. —Jane Firstenfeld tOP stORY California 2014 Crop Large, No Record-Breaker " Perhaps most interesting is the decrease in red grapes, (and) a lot of that is crushed for white Zin." —Steve Fredricks, Turrentine Brokerage 2010 2011 2012 2013 2014 Chardonnay Cabernet Sauvignon Zinfandel Merlot Pinot Noir Syrah Muscat of Alexandria 800 600 400 200 0 Source: USDA National Agricultural Statistics Service tons Crushed by varietal Thousands of Tons

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