Insight about the current wine and grape market, and also comments from some outstanding outside speakers. Glenn Proctor – Wine/Grape Domestic Market Greg Livengood –Wine/Grape Global Market Stephen Rannekleiv, RaboBank – Market Observations and Consumer Insight Tony Correia, The Correia Company – Vineyard Market Update

There’s the potential in California’s vineyards for a 2018 crop at least average in size. With prices high, inventory big and retail sales disappointing, market activity remains subdued bar for a few exceptions in the premium areas. Click through for deep dives into Cab, Pinot Noir and Zin, the latest acreage stats and how they reinforce a feeling that Cab supply is outpacing demand.

READ FULL REPORT HERE

As 2013 comes to a close, most will remember the year of large crops across the globe and the market that began to shift back to the favor of the buyer. The Southern Hemisphere produced record crops in several markets, and with the exception of France, growers in the Northern Hemisphere experienced bountiful harvests as well. Buyers returned to the market in full force, taking advantage of pricing that had not been seen in recent quarters. Despite reports of potential global wine shortages, the market ends the year 2013 in a balanced to long position.

Demand continues to be strong for wine in many markets, and wineries were able to weather the storm of higher bulk pricing in 2011 and 2012. Margins were squeezed, and many struggled with price increases. Hopes are that growth will continue with ample supply to meet future demand. 

The team at the Ciatti Company thanks you for your support during the 2013 year, and we wish everyone a successful 2014.

Read the full report

Selling or buing bulk wine or grapes? Call us 415-458-5150

With a deeper look into the grape crush report, certain themes emerge that are in line with what we’re seeing in the bulk wine and grape market as well as what we’re reading and hearing about in case good sales. Certain varietals stand out as being longer than others, with both Muscat and Chardonnay posting strong numbers again in 2013.  Muscat Alexander jumps off of the page, with year over year volume growth of 60%. The additional California Muscat production could prove to be problematic, as its growth coincides with already existing international Moscato inventories and an overall softening of Moscato demand at the retail level.

Analysis on pricing reveals that it was almost uniformly down in the Central Valley (see pricing for Districts #11 - #14, and #17), while pricing was uniformly up in all Coastal appellations (see districts #1- #8).  This parallels what has been going on in each category, as lower cost wines from the Central Valley have been struggling due to higher cost of goods coming off the short 2010 and 2011 harvests.

In the end, the quality of the 2013 vintage should be pleasing to both winemaker and consumer and the quantity in the Central Valley should help in the short term to keep imports for certain varietals at bay.

What the future holds regarding the expectations for the 2014 crop will certainly make for a dynamic market after coming off two back to back record harvests.

Read the full report

After several months of a relatively low level of activity, the bulk market “broke out” in the middle of January. Buyers, perhaps concerned about potential supply issues in California and the Southern Hemisphere, ramped up their purchases over the past few weeks. Suppliers in California continue to look for drought relief, as 2013 proved to be the driest year for California in recorded history. There continues to be a debate about the potential size of the drought-affected 2014 California crop. Both Chile and Argentina are reporting lower crop projections, as frost and other weather issues appear to have damaged yield potential in both markets. Australia and New Zealand both could see healthy outputs, although some growers in Australia may face some issue caused by the recent heat wave.

Suppliers seem to be gaining renewed strength, as demand numbers look promising in many markets. Chile has reported a record volume of exports in 2013, and current bulk pricing makes the Chilean market extremely attractive for red wine buyers. South African suppliers have a low level of carryover stock, and growers are hoping for a large harvest, as the weakening Rand continues to make South Africa a popular target for buyers from Europe and North America. European market reports are varied, as ample supply exists in Spain and Italy, while the demand is currently greater than supply in France.

It appears that the bulk market has found a pricing floor in many markets, as prices are now holding, and in some cases starting to strengthen. Actual crop sizes in the Southern Hemisphere will certainly help solidify pricing in the short term, but the view for the long term continues to be a balanced market.

Read the report

Producers in much of the Southern Hemisphere are now in the last stage of their 2014 harvests. Reports remain unchanged out of Argentina and Chile, with both countries reporting substantial decreases in output from the previous year. Australia also looks to be slightly down, however, New Zealand producers continue to expect larger numbers than last year. South Africa is holding steady with reports for an average sized crop and good quality in most regions.

The bulk market in the Northern Hemisphere continues to be varied, based on region. Spanish suppliers are struggling under the weight of very heavy supply. Spanish pricing has continued to drop over the past month, with many expecting further declines in May and June. Conversely, the French market is quite strong with limited supply, especially for white and rose wines. California producers are looking towards the 2014 harvest, and production capacity seems to be the greatest concern at this time.

The annual ProWeinshow in Germany was once again a very well attended and successful wine fair. More than 48,000 wine professionals visited the show, and most of the 4,830 exhibitors had very active stands. Bulk wine buyers were active during the event, with many transactions being finalized over the three-day period. The Ciattistand was busy, and we thank all of you that were able to visit us this year. We look forward to seeing many of you again in London in June.

Full World Report April 2014 & Ciatti Bulk Wine Pricing, April 2014

 

Updated reports are coming in on harvests around the world. The government projections in Argentina have changed dramatically over the past month. Earlier crop reports had projected a 30% decline in volume, but new reports now estimate only a 6% decline from the previous year. In Italy, an updated harvest report now shows that they had a much larger than previously reported crop in 2013, and now holds the title of largest wine producer in the world. Chile continues to report a significantly smaller crop than last year, while Australia and South Africa are expecting average returns. 

The California bulk market has experienced some slowdown, especially in the central valley region. Inventories remain high on several varietals, and storage capacity will be at a premium. Crop estimate reports are mixed in California and it remains to be seen what effects, if any, the draught will have on the coming crop. 

Full World Report, May 2014 - Ciatti Pricing, May 2014

There is a strong level of optimism in the industry about future growth. But given the past two large crops and the expected average plus crop of 2014 the market for grapes and wine has slowed. These challenges seem to be greatest in the Central Valley where large amounts of bulk wine remain on the market. Three large crops in a row could lead to a significant short term supply correction over the last half of the year.

California Wine & Grapes by Region

North Coast

Grapes

As we look back at the first half of 2014,we can definitely say Cabernet Sauvignon isthe most in demand variety in the North Coast. Current grape inventories, especially in Lake, Mendocino, and Sonoma are verytight. In general terms the overall market for grapes has been as healthy as one could expect coming off of two back to back large vintages. Other varieties have also had some activity, Pinot Noir, Zinfandel, Sauvignon Blanc, and premium appellated Chardonnay have seen relatively strong demand. Transaction activity was brisk from mid January to mid April. The market has slowed somewhat as we seen expectations for an above average crop become more probable. We have seen buyers be more hesitant the last 4 weeks and unwilling to chase anything but Cabernet Sauvignon.No one knows how big the 2014 crop will end being at the end of the season – but the potential for another above normal crop has caused a slow in the early season activity. Also, harvest has the potential to be 2-3 weeks early!

Bulk Wine

The North Coast bulk market has been a bumpy ride depending on what you were selling and from where. Here are some highlights to demonstrate that point:

Cabernet Sauvignon: Strategies to source Cabernet Sauvignon from anywhere in the North Coast continues to dominate the headlines. Sonoma and Lake Counties continue to sizzle with lot after lot continuing to sell withlittle difficulty. After seeing little movement in the first two months of the year, 2012 Napa Valley Cabernet Sauvignon is selling in the $30 - $38 per gallon range with brisk sales and 2013 Napa Valley Cabernet sales are now getting going in the $26 - $32 per gallon.

Merlot: For as hot as Cabernet is, one would think the Merlot market would not be as tepid as it is. There is still carry over stock from 2012 that can at least be used as a Cab blender, can it not? Sonoma County Merlot is readily available at $12-$15 and Napa Valley at $15-$18. Mendocino and Lake County are quiet butthere have been a few sales in the $7-$10 range.

Chardonnay: Mendocino and Lake County Chardonnay sales continue to be sluggish with sellers today willing to take a $5 California appellation price in order to get some inventory moved. Sonoma County Chardonnay sales have really picked up since February with good volumes moving between $12 - $16.

Pinot Noir: Two record harvests in a row? Another good crop on the way? So what? Pinot Noir continues to see demand from all appellations with Russian River and Sonoma Coast leading the way. Pricing has been in the $20-$25 range with some higher end barrel lots exceeding $30. For a buyer, the opportunity for Pinot Noir today looks to be in Carneros, where there is at least decent inventories to build on.

Zinfandel: The two big harvests in a row have not been kind to the Zinfandel bulk market. Prices for Sonoma County Zin has been all over the board. Some larger lots moving in the $12 range and some higher end lots moving closer to $20. But there seems to be limited demand at the moment, soit will be interesting to see what happensover the summer as to whether this product can move at close to a decent price.

Central Coast

Grapes

The Central Coast has seen a lot of activity over the past two vintages. Entering the 2014 season,over 70% of the available fruit has been contracted. This year buyers have continued to look atCabernet Sauvignon, but many sellers are trying to bundle other varieties such as Merlot, Chardonnay, and White Riesling with Cabernet Sauvignon.Buyers have tempered their demand for Central Coast Chardonnay, with potential yields looking healthy and ample supplies on the bulk market. Pinot Noir was a hot item in the first quarter of this year, but activityhas slowed after set. Prices for Pinot Noir have continued to remain steady to date. One area we have seen demand growth in is District 6 (North Section of Central Coast AVA) , with more buyers moving into the area to source their Central Coast labels. Grape activity has slowed on the Central Coast, from earlier in the year. The reduced activity is a combination of both larger amounts of Bulk wine supply and the potential size of the 2014 crop.

Bulk Wine

Bulk wine inventories on the Central Coast still remain in ample supply for most varieties. Most activity has been focused on Cabernet Sauvignon; however asother Coastal regions have seen large price increases, Central Coast supply remains available and prices for Cabernet Sauvignon have remained relatively stable at $12 to $16. Monterey Pinot Noir has also kept up with the action and moves in the $15 to $18 range, whileselect lots of Santa Barbara Pint Noir have commanded considerably more. Early year activity in Pinot Grigio hascleaned out most remaining inventories which had been selling in the $7 to $9 range. On the other side of the spectrum we have larger inventories of Coastal Chardonnay which moves steadily yet moderately at $8 to $12 and Merlot, which has had limited sales in the $7 to $9 range. Central Coast buyers seem to be cautious and watchful of storage space as we proceed towards another harvest. 

Lodi / Central Valley

Grapes

The Interior region vineyards have made it through bloom and appear to have an average set. Bunch counts by variety seem about average with some varieties showing slightly larger counts than last year in the Southern Interior. As you travel North, cluster counts tend to be slightly off versus 2013. Lodi, Chardonnay looks good and seems to have normal berry sizing, but Zinfandel seems to be significantly lighter and have lower cluster counts. Cabernet Sauvignon and Merlot look average at best but have seen some shatter as a result of a mid May heat spell. With summer temperatures approaching and the drought affects still uncertain, individual bunch size may struggle to have average weight. Buying activity has been slow with only a few buyers for select varieties such as Cabernet Sauvignon, Petite Sirah, Pinot Noir, Sauvignon Blanc, and Pinot Grigio. Most of the grapes are under long term contracts in the Valley and selling uncontracted grapes has been a challenge so far this year.

Bulk Wine

Inventories of Central Valley varieties are readily available. Overall movements this year have been less than robust and these inventories are becoming "heavier" as we head into the summer months. We feel the effect of the two large harvests of 2012 and 2013. Wineries with full tanks have been absent from buying on the open market. This is causing concern and capacity problems for many speculative sellers. Specifically we have had demand for Pinot Grigio, Cabernet Sauvignon and other heavy reds, with moderate movement. Many other varieties including Muscat, Zinfandel and Sauvignon Blanc have seen sparse activity, surprising as those were the hottest items a couple of years back. Chardonnay sales have been slow in the valley, hurt by readily available amounts of coastal Chardonnay. An "average" valley crop overall would be welcomed and a hopeful reality given the current statewide drought conditions.

CONTACT INFORMATION

Partner/Broker John Ciatti M.415/264-0762  john@ciatti.com

Partner/Broker Steve Dorfman M.707/321-3843  steve@ciatti.com

Partner/Broker Greg Livengood M.415/497-5032  greg@ciatti.com

Partner/Broker Glenn Proctor M.707/337-0609  glenn@ciatti.com

Partner/Broker Chris Welch M.415/298-8316 chris@ciatti.com

Partner/Broker  John White M.415/250-0685  johnw@ciatti.com

Broker  Todd Azevedo M.415/265-6943  todd@ciatti.com

Broker  Johnny Leonardo M.415/717-4438  johnny@ciatti.com

Broker Greg MaGill M.559/977-4040  gregm@ciatti.com

The summer has begun in the Northern Hemisphere, and the London Wine Trade Fair has come to a close. The annual fair has now moved to a new location in the heart of London, and this new venue seems to have sparked new energy to what had been a fading event. The Ciatti stand was busy for most of the three day event, and we thank those of you who had the opportunity to visit us during the show.

It is clear, after spending several days with suppliers from all around the globe, that there is ample supply of bulk wine in the market. Most of the talk of oversupply revolved around the market situation in Spain. Rumors of low priced offers were confirmed, as many suppliers have very attractive offers on both generic and selected varietals from the La Mancha region.

Markets in the Southern Hemisphere remain active, with Chilean and Australian pricing continuing to be attractive to global buyers. Argentine suppliers continue to struggle, and it appears that the government will again study ways to offer support to the market. 

The direction of the bulk market will now be dictated by the size of the coming crops in both Europe and the United States, and buyers and sellers alike now wait to see how those crops will size up. Predictions vary, and weather can change expectations quickly, but we know the next sixty days will be interesting.

Read the full report

While the world has cheered, cried, yelled, screamed and held its collective breathe during the 2014 FIFA World Cup, we at Ciatti have not been immune to the fever of this year’s play. The verbal rivalry between countries has been, well, somewhat less than reserved and in some cases downright bitter……but then again, the most ardent of them was from Canada.

The bulk market has been much the same.  Inventories are, in general, available from around the world, so the competitive spirit is alive and well on the brokering front to get as many people the wines they need from around the world.  Higher‐end wines have fared better during this time, while more commercial areas still have a ways to go in order to work through the 2012 and 2013 inventories that are currently in tank.  We feel that while inventories are firm, the good news is that we continue to consume wine at an increasing rate, in spite of the surge of craft beers and spirits.

So, while you are waiting for the final game between Germany and Argentina to begin, please take a look at some very good stats by country and a great Buyer's Corner that focuses on the expanding Asian market. Finally, while watching the game, remember the legendary English footballer's Gary Lineker's famous quote:

"Soccer is a game for 22 people that run around, play the ball, and one referee who makes a slew of mistakes, and in the end Germany always wins."

Full Global Market Update

July Export Market Pricing

With tanks full around the world, we decided to offer a brief respite from the detailed version of the Ciatti Global Market Update. If you are reading this in the Southern Hemisphere we hope you are settling in for a nice winter as the wines finish and ready themselves for sale. If you reside in the Northern Hemisphere we hope that you are well rested from your summer vacations and ready for an eventful harvest season.

In the following pages, we hope that our direct and to the point, albeit abbreviated country comments will offer you some quick insight into the market as we see it today. As an added bonus however, Greg Magill has taken this opportunity to do a country by country round up of the World of Concentrate.

We would like to thank you all for being loyal readers, and will bring you a full and detailed report in September.

Read the full report here!

 

Global export pricing: USD per liter

Currency Conversion Rates as of August 11, 2014

For list of prices click here!

 

It’s harvest time in the Northern Hemisphere, and early estimates compared to the previous year are beginning to be reported. The overall European harvest looks like it will be down, as Spain and Italy are both looking to take a step back from strong 2013 results. Predictions are for a lower than average crop in Italy, with some serious quality concerns.  Spain is expecting a crop of average size, after the huge crop last year. France looks to be having a larger crop that least year, near the historical average. Most estimates have the California crop coming in smaller than last year, but perhaps similar to the 2012 crop. The drought in California does not appear to have had a major effect on this years’ crop, but many fear that continuing lack of rainfall could have a large impact on 2015 results.

In the Southern Hemisphere, Argentine suppliers continue to struggle with difficult economic conditions.  Opportunities for varietals like Malbec have increased, but the outside economic influence has many concerned about the future.  New Zealand suppliers continue to enjoy strong world‐wide demand, and it seems that supply will allow for an increase in sales.  All eyes in Australia are on the unfolding story at Treasury Wine Estates, as multiple bidders attempt to purchase the company. 

Read the full report & current Ciatti pricing

Harvest is coming to an end in the Northern Hemisphere, and like the Southern Hemisphere earlier in the year, it looks to be smaller than the volume produced in the previous year.   Spain and Italy both look to be sharply down on volume when compared to 2013, while France looks to rebound from the small crop of last year.   Estimates from the United States are now coming in, and California looks to be down, as expected, from the record setting crop of 2013.   Based on current estimates, the combined Northern and Southern Hemisphere crops should be much closer to the results of the previous five years average, compared to the much larger than average crop of last year.  

The bulk market for exporters continues to be slightly on the slower end of the activity spectrum, with plenty of stock available in most markets.   Sales have picked up a little over the past thirty days, as harvest reports from the Northern Hemisphere have been less than enthusiastic in regards to volume. Given the smaller harvest globally in 2014, expectations are that the available wine inventories will move from a long position back towards balanced.

Read the full report & current Ciatti pricing

The harvests have all come to an end in the Northern Hemisphere, and it looks as though
France has regained its position as the largest producer in the world. French growers looked to
have rebounded from disappointing volume results in 2013 with a much better looking crop in
2014. While all regions did not participate in the gain, as Languedoc notably did not have large
output, the French growers overall are feeling good about the size of the harvest. The second
factor allowing France to regain its status as top producer is the size of the harvest in Spain.
The Spanish harvest is down measurably from 2013, and this decrease in volume seems to have
helped balance the previous over‐supply situation. Quality and volume both seem to be an
issue in Italy, as adverse weather conditions have caused for a very difficult harvest in 2014.
California growers agree that the crop this year is a good one, but not nearly the size of the
record crop from the previous year.
Many producers in the Southern Hemisphere are now nearing the end of the frost season, and
despite some reports of frost, no major damage is expected from the larger production regions.
While it is still very early for harvest estimates, most areas are reporting normal growing
seasons thus far.
The bulk market continues to move forward, and many players will meet in Amsterdam in the
coming days. Please come visit the Ciatti stand at the show, and we look forward to seeing
those of you who will attend.

CLICK HERE to view the REPORT

 

 

 

 

January’s report looks back at an eventful 2017 in the bulk world, in which supply tightened and prices rose, and looks ahead to a 2018 filled with opportunities – and a few pitfalls. The team at Ciatti is here to help you navigate the twists and turns, and wishes you a very Happy New Year.

 

 

Good morning and welcome to the start of 2015, at least on a calendar basis. While we all tend to work harvest to harvest, the Ciatti World Report hopes to capture the ongoing fluctuations in the wine business from a supply side month to month around the globe!

As we did last year, we would like to offer you this first report of 2015 as a primer to what may be next for us in the global wine business. The year of 2014 had many bumps and grinds along the way, with larger or perhaps larger than expected harvests in some areas of the world, while in a select few markets the supply stream was down a bit. The great news is that the wine business continues to grow year over year, as people continue to savor our wines the world over. Regardless of the growth in the Craft Beer and Spirit categories, we continue to attract drinkers who see the value in the lifestyle that wine offers them on a daily basis. We have often stated that we may have a bit of oversupply today (country and varietal dependent of course), but we also have increased consumption, just not at the level that can keep up with the volumes created between 2012‐2014. To that end, we need to drink our way through it collectively. Luckily, consumers of our wines are looking for us all to continue to produce quality wines for many years to come. We at Ciatti will continue to do our part in moving us towards a balanced position through brokering or drinking or both!!

Finally, remember, this January 2015 World Report offers a consolidated view from the year that was, with some predictions for the year that may be. So, sit back, enjoy an early cup of coffee and start the year off with us!

We hope you all had a very Merry Christmas and a Happy New Year, and we look forward to a fruitful 2015 (pun intended!)

 

CLICK HERE FOR FULL REPORT

 The California grape crush report for 2014 was released on February 10th, and results were generally in line with expectations. The crop was down in volume from the record 2013 harvest, with reds retreating more than white varieties. Export sales are driven by the grapes coming from the San Joaquin Valley, and intake numbers were down for almost all varieties across the board in that region. We don’t expect a big change in market pricing due to the release of the crop report, as most producers had already estimated that the wine grape crop would be very close to the 3.9 million ton number that was reported yesterday. The French bulk market remains very strong, with prices trending in an upward direction on most varietals. The small crop in Southern France has caused many buyers to move quickly, and supply does not seem capable of meeting current demand. We have seen a lot of action in the Italian market, with Pinot Grigio and Prosecco wines now at the top of many buyers list of needs. Spanish producers are also reporting low inventory of 2014 wines and prices have remained stable. Harvest has begun in the Southern Hemisphere. Argentine suppliers continue to face very tough economic headwinds. Despite those issues, Good harvest conditions give hope for exceptional quality in 2015, and producers continue to have good product to market. The weather has been slightly less cooperative in Australia, with reports of mildew being made in some parts of the country. Producers are hopeful that the relative weakening of the Australian dollar against the US dollar will result in a boost in export sales. The harvest is not yet underway in Chile, but expectations are for a crop that will be larger than that of last year. The bulk market remains steady, with good opportunities for buyers in many markets. Suppliers and buyers alike are getting ready for what should be a very eventful ProWein in March.

 

To view the entire report CLICK HERE

North Coast Overall the 2014 harvest will go down as one of the most bountiful in the history of Napa and Sonoma Counties. The last three years have produced historically large crops and that has gone a long way in replenishing some of the inventory in the market that had been depleted by the shorter 2010 and 2011 harvests. We continue to see average grape prices rise for most of the varieties in these areas with especially large jumps, 5-7 %, for Cabernet in Sonoma and Napa. The demand continues to be strong in Napa and Sonoma because case sales of wines over $15 per bottle has been strong for the last two years. There are some areas that are weaker than others though – with concerns centered on Chardonnay and Merlot. We believe the market is relatively balanced and that continued increased demand should work through the available inventory. 

To view the entire report CLICK HERE

 

 

The Ciatti Company is in the process of updating our winegrape inventory database and would like to know if you have winegrapes for sale for 2015 and/or beyond.

We are constantly talking with and receiving new inquiries from winegrape buyers across the state and it is important for us to have an updated list of available winegrapes at the ready when speaking with these buyers.

If you have winegrapes available for 2015 please call, fax or email this information to Jennifer Forrest in the Ciatti office.  Jennifer can be reached at phone 415/458-8865, fax 415/458-5160 or Email jennifer@ciatti.com.

We've include a quick FORM that you can use to fax over if you are interested otherwise feel free to get the information to us in any format that is convenient for you. Click here to access the form.

 

We appreciate you thinking of Ciatti when you have the need to buy or sell winegrapes.

 

The Harvest season is moving along in the Southern Hemisphere. Reports on volume are mixed, as Chile expects to have rebounded from a short 2014 crop, Argentina and New Zealand look to be down, and Australia and South Africa seem to be holding steady. Quality looks good in most regions, with some issues reported in selected markets. Bulk wine volume is balanced to slightly long in many Southern Hemisphere markets, but sales activity has been brisk in recent weeks.

In the Northern Hemisphere, the French market continues to be very active, with prices holding firm on most varieties. Prosecco and Pinot Grigio sales have been strong from Italy and the falling Euro has helped with exports to the United States. California reports sufficient inventory for most items, and the continuing drought remains high on growers’ lists of concerns. The bulk market has picked up pace in California and older inventory is beginning to disappear.

CLICK HERE for the full April 2015 Global Market Update