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8 WINES&VINES November 2015 A member of Wine Communications Group Inc. President & Publisher Chet Klingensmith Chairman Hugh Tietjen Publishing Consultant Ken Koppel Associate Publisher Tina Vierra Publishing Assistant Maria Brunn EDITORIAL Editor Jim Gordon Managing Editor Kate Lavin Associate Editor Andrew Adams Senior Correspondent Paul Franson Contributing Editor Jane Firstenfeld Northwest Correspondent Peter Mitham Columnists Grapegrowing: Cliff Ohmart and Glenn T. McGourty Contributing Writers Laurie Daniel, Richard Smart, Richard Carey, Chris Stamp, Andrew Reynolds, Craig Root Practical Winery & Vineyard (PWV) Editor Don Neel Wine East Editor Linda Jones McKee DESIGN & PRODUCTION Art Director Barbara Gelfand Summer Designer Bridget Williams DATABASE DEVELOPMENT AND INFORMATION TECHNOLOGY Vice President—Data Management Lynne Skinner Project Manager Liesl Stevenson Database & Web Development James Rust, Peter Scarborough EDITOR'S LETTER THIS YEAR THE ANNUAL PERIOD of speculation about how big and how high quality the West Coast wine harvest will be began two weeks earlier than normal. Of course, that's because the harvest was more than two weeks earlier than normal. So what's the scoop? This issue's Top Story by Paul Franson on page 15 explains that the harvest quantity was estimated to be down from normal by as little as 5% in some places and as much as 50% in others. The only person brave enough so far to state a concrete California-wide prediction was Nat DiBuduo, a data lover and president of the Allied Grape Growers association with members spread around the state. DiBuduo predicted the 2015 total will be just shy of 3.8 million tons once the official results are in, which won't be until February, when the state releases its Prelimi- nary Grape Crush Report. That number is just a couple of percentage points below last year's 3.9 million tons, and only 5% down from what DiBuduo and other in- dustry experts are now calling the "new normal" of 4 million tons—a rough average of the 2012-14 totals. At first glance we can't see how the crop can still be that big, after local growers and observers in numerous counties are citing yields that are 15%, 30% and even 50% below normal. Even if you factor in that the biggest producing region of all, the San Joaquin Valley, appeared to be down only 5%, wouldn't all those other reductions affect the total by a few points? Time will tell, and the forecast may change by the time you read this. One thing that does not appear to be changing is the ongoing split of U.S. wine sales into a nicely growing $10-and-up market and a slug- gish or slipping under-$10 market. This situation is closely tied to supply from the vineyards. Inexpensive grapes from most of the San Joaquin Valley supply the vast quantity of low-priced wine that makes up most of the volume of California production. More expensive grapes from the coastal counties supply the higher priced wine segment that is growing steadily. The Wine Industry Metrics (page 10) consistently validate this split. So do industry suppliers that managing editor Kate Lavin interviewed for the cover story on page 34, "Supplier Opinions in Line With Bullish Economy." CEOs in the wine business also spoke openly about the trend when surveyed by Dr. Robert Smiley's team at the University of California Graduate School of Business for the article on page 108, "Premium-Minded Consumers Split Wine Market." Circling back to the 2015 harvest, it's interesting to note that the worst crop reductions were in the higher priced areas from Paso Robles and Monterey County in California's Central Coast to the North Coast regions of Napa, Sonoma and Mendocino. So the shortest supply may be in just the price ranges that are in most demand. It could be cause for concern among winemakers who need to keep filling demand for their fast-growing premium brands. True, the past three bumper crops left an oversupply in the form of bulk wine, but the high-quality part of that bulk is now being drawn down rapidly. Close observers are describing the supply-demand situation now as balanced, and it will be interesting to see if that tips toward under-supply and higher prices for grapes and bulk wine in 2016. In the meantime, most winemakers and grapegrowers are beginning to enjoy the relatively quiet post-harvest period and the prosperity that the last few years have brought. There will be plenty of time to run the numbers as the year draws to a close. —Jim Gordon Harvest 2015 and the 'Premiumization' Trend The shortest supply may be in just the price ranges that are in most demand. CONTACT US SUBSCRIPTIONS Email: subs@winesandvines.com Online: winesandvines.com/subscribe Phone: (866) 453-9701 EDITORIAL Email: edit@winesandvines.com MAIL 65 Mitchell Blvd., Suite A San Rafael, CA 94903 CONNECT WITH US facebook.com/WinesandVines twitter.com/WinesandVines youtube.com/WinesandVines1919