California Bulk Wine Market Update for Oct. 30, 2014

Market Update by Turrentine Brokerage - Oct. 30, 2014

Take a look at the three charts below for Cabernet Sauvignon, Chardonnay and Pinot Noir, which compare 2014 tons crushed (estimates) and current bulk inventories to the situation last year at this time. The following charts illustrate, at a glance, the dynamics of the grape and bulk wine markets coming out of the 2014 harvest. Yields per acre appear to be generally down from last year, but an increase in productive acres will help boost both interior and Central Coast tonnages. Quality appears to be good for the third consecutive year, which could increase pressure on the nearly 4 million gallons of 2012 wine available on the bulk market.

Cabernet Sauvignon - Current situation compared to last year
	2014 Est. Tons Crushed	Bulk Inventories	Bulk Demand
Napa Valley	â†˜	â†˜	Strong
Sonoma County	â†˜	â†˜	Strong
Other North Coast	â†˜	â†’	Strong
Central Coast	â†—	â†—	Moderate
Northern Interior	â†—	â†—	Weak to Moderate
Southern Interior	â†—	â†—	Weak to Moderate

Cabernet Sauvignon volume crushed in the North Coast appears to be smaller than last year, but still above historical averages. Many wineries were happy to take in Cabernet tonnage in excess of contract maximums in each of the past three vintages, reflecting strong consumer demand for bottles priced above $15.00. Yields are lighter in Paso Robles, but increased tons in Lodi and Monterey may offset this reduction—at least for some brands.

Chardonnay - Current situation compared to last year
	2014 Est. Tons Crushed	Bulk Inventories	Bulk Demand
Napa	â†’	â†—	Moderate
Sonoma	â†˜	â†’	Moderate
Other North Coast	â†˜	â†—	Weak
Central Coast	â†—	â†—	Weak
Northern Interior	â†˜	â†˜	Weak
Southern Interior	â†˜	â†˜	Weak

The Chardonnay crush also appears smaller than last year but still above average. Bulk market demand for Chardonnay, however, continues to drop since last year in the wake of three large harvests. Strong yields in Lodi, the Delta, and Monterey may make up for lower yields in southern interior Chardonnay, which suffered from poor water quality and extended heat. Bulk inventories continue to rise, but remain well short of 2009 levels, when a large harvest coincided with a flood of Australian Chardonnay.

Pinot Noir - Current situation compared to last year
	2014 Est. Tons Crushed	Bulk Inventories	Bulk Demand
Napa	â†˜	â†—	Moderate
Sonoma	â†˜	â†—	Moderate
Other North Coast	â†˜	â†’	Moderate
Central Coast	â†’	â†—	Weak
Northern Interior	â†—	â†˜	Weak
Southern Interior	â†’	â†˜	Weak

The combination of multiple years of remarkable yields and increased production from newly bearing acres in key regions has provided beaucoup Pinot Noir. Consumer sales are strong, but pricing is competitive, resulting in lower spot market grape prices in most areas for the 2014 harvest. Bulk demand has also dropped from last year while supplies have ballooned from 100,000 gallons in 2011 to the current level of 1.1 million gallons, mostly from the Central Coast and Sonoma County.