Mother Nature rarely provides the industry with precisely what it needs, but She has been generous in recent years. Not only was the industry short on supply entering the 2012 harvest, which was the beginning of two record harvests, but 2014 was less than 2013 for many wineries that were beginning to fall behind on depletion rates. While there is still an uphill battle on the bulk market to move 2012 and 2013 vintage wine, yields on some challenged varieties on retail shelves, namely Merlot and Zinfandel, were -12% and -16% below long-term averages. Meanwhile, more growing varieties like Cabernet Sauvignon and Pinot Noir were up 11% and 24% over long-term averages, respectively.

 

THE 2014 HARVEST WAS BELOW 2013 ACROSS ALL REGIONS AND NEARLY ALL VARIETIES,
BUT STILL ABOVE THE FIVE-YEAR AVERAGE.

Wineries are still processing their internal information and buying activity both on the grape and bulk wine markets have not moved up or down since the February 10th Preliminary California State Crush Report release. The next agricultural indicator is the counting of clusters per shoot, which could have more sway on market activity.

There are currently over 20 million gallons actively for sale on the bulk market, the most we've had at this time of the year since 2007. With ample supply, buyers have their choice of wines to purchase and good quality lots are being selected first. We are receiving numerous phone calls each day.

The market, even when it seems straight-forward, can provide many unseen challenges and hurdles. Please give us a call to help you buy or sell your bulk wine and grapes today! 

 

Best Practices 

In California, the bulk wine market is an efficient and effective tool for wineries to buy and sell. Wineries send samples to us and in 24 to 48 hours they are in the hands of interested buyers around California and other areas of the US. Due to this efficiency and our extensive network, we negotiate approximately 1,500 individual successful transactions a year. However, one deal every few years does not go correctly. In almost every case in our 40+ years we have been able to help the parties resolve the issue in a sensible manner, especially if best practices are followed by both buyer and seller.

 

We write in this newsletter and speak often about what sets our service apart from other brokers and how the more closely you work with us-the greater the benefits to you and your winery, but there are also some best practices and a few simple tips that you can do to increase your success in working to buy and sell bulk wine.

 

The Summary for Sellers:

1. Don't neglect it; improve it
2. Get the wine ready first
3. Prepare samples that sell (provide us with all of the information to properly label the wine for a buyer to buy)
4. Think customer service
5. Pick the best broker

These are incredibly valuable tips that, if followed, can result in improved returns for the sellers. Read the entire description for each point above here.

 

The additional list of best practices is for after the sale is complete. Following these tips can help insure that issues do not arise, and if they do, you have the objective information to resolve them.

• Follow the details on the Sale Memo
• Send properly prepared and labeled shipment confirmation samples
• Perform lab analysis on the wine prior to loading
• Request information from the Buyer for any specifics of temperature or SO² adjustment before loading
• Inspect the truck before loading
• Pull samples from the truck for hold back after loading
• Invoice as soon as the weight is known and volume is determined

For Buyers:

• Perform laboratory analysis on the samples selected to purchase
• Send a loading protocol
• Request properly labeled shipment confirmation samples
• Perform lab analysis on the shipment confirmation samples vs. the samples selected for purchase
• Ship on-time
• Perform lab analysis on the wine on the truck vs. the shipment confirmation samples
• Do not unload the wine if there is an issue-call us ASAP!

We will be there to help resolve the issue. If best practices were used by both parties the issue can be resolved in a few phone calls. If they were not-it may take longer.

Sometimes people say that dealing with the extra samples and analysis is difficult and not worth it. Think of it as insurance. A little bit of effort can pay big dividends if by some chance you are in that very small percentage of deals where an issue arises. Companies that instill 'Best Practices' have the best reputations, get the best deals, and usually receive the best returns when selling wine in bulk because people want to deal with them.