Mike Needham, Broker/Partner with Turrentine Brokerage was interviewed by Malcom Media. Watch this brief interview with Mike Needham as he shares some insights of what he’s been seeing in California’s interior wine grape regions based on his recent presentation at Malcolm Media’s Tree & Vine Expo.

Mike Needham from Turrentine Brokerage share current wine market dynamics for the Central Valley of California, which accounts for the highest portion of the nation’s wine grape crush.

Sometimes the light’s all shinin’ on me
Other times I can barely see
Lately it occurs to me
What a long, strange trip it’s been

The Grateful Dead, of course, must have been singing about the long, strange trip of the wine business. They were singing about hot markets and cold markets, about big crops and small crops, about rain and drought.  

I was reminiscing about the strange wine business journey with a longtime grower client recently over lunch at Willi’s and he said something that surprised me. He said that the single most valuable thing I have done for him over the years was to expand his radar screen to help him detect potential problems before they bit his head off.

I argued, on the contrary, that the most important thing I had done for him was to identify ... read the entire article.

Pinot Noir is often grown in cooler regions, and even with relatively high prices, growers may struggle to achieve economic yields. Many Pinot Noir vineyards in the coastal areas of California produce between 2.5 and 6 tons per acre. Many vineyards in Oregon produce even less. Pinot Noir can produce much higher tonnages, however, in the Central Valley of California. From calculations based on the 2012 California Department of Agriculture’s Grape Acreage Report and the state’s 2012 Crush Report, Pinot Noir vineyards in District 13 produced 12,730 tons of Pinot Noir from 24 bearing acres. That’s 530 tons per acre! At an average price of $423 per ton, that’s a gross of $224,000 per acre. This could be the 24 most profitable acres of vineyard land in the world. Or, maybe there is something wrong with some of the state’s reported numbers.

Wineries are required by law to report the tonnages they crush and these numbers are most likely accurate. The acreage numbers, however, are voluntary and many wineries and growers do not feel the need to disclose their numbers. We would not be surprised if mature Pinot Noir vineyards in District 13 averaged ten tons per acre in 2012. That would translate not into 24 acres but 1,270 acres at full production, although there are probably more acres than that but much of the acreage is not yet at full production.  The problem is not limited to District 13. Statewide, the just-released acreage report claims that only 5,474 acres were planted in 2012. Surveys of nursery sales in 2012 estimate enough vines sold to plant 4 to 5 times the number of acres in the state report. The acreage report is corrected over the years; in 2005, the report stated 7,733 acres were planted that year and by 2012 the number had risen to 12,251 acres planted in 2005.  These misleading numbers published within in the voluntary state report can create major misunderstandings – and lead to bad business decisions. Turrentine Brokerage uses proprietary market information from real world transactions and our research to provide district by district estimates of acres planted and forward looking projections of tons crushed for key varietals to provide information to our clients for better business decisions.  District 11, 12 and 13 were the first regions to plant following many years of excess and the recession.  Some of these new acres should begin bearing Cabernet Sauvignon grapes later this year, signifying the first wave of new grapes that will continue to make its way to the market over the next several years.  Despite new acres coming on, inventory still remains tight and prices are still fairly strong.  Many other new projections will be released in the next few weeks in the updated full issue of The Turrentine Outlook©, which will help us continue to work together for your sustained success.

Contact us or click here to subscribe for your issue today. 

 

 

 

 

 

 

 

What would you give for a crystal ball, full of essential information that could predict the future of the wine industry and allow you to confidently chart a course toward assured profitability?

Such a tool does, in fact, exist. It’s called Turrentine Outlook, a comprehensive industry report that contains the most up-to-date market intelligence available for leading varietals such as Chardonnay, Pinot Grigio, Cabernet Sauvignon, Merlot and Pinot Noir.

The just-released Issue 13 of the Turrentine Outlook is loaded with strategic, wine industry data, contained in color charts and graphs with corresponding analysis and projections across key districts of California and beyond.

According to Turrentine President Steve Fredricks, success in our industry depends on whether or not you have both short and long-term trending information. “By looking at those trends and understanding the big picture, people can be more secure with their planning and long term positioning.”

“If you’re growing Sonoma County Pinot Noir, you need to know what’s happening in Santa Barbara and Monterey where Pinot Noir is also grown,” Fredricks says. “Global alternatives can shape trends around varietals as well.”

What’s happening in the vineyards as harvest progresses? The Turrentine Grape Team will be highlighting what they are hearing and seeing in the vineyards throughout California every week. 

Central Coast

• Chardonnay, Pinot Noir, and Merlot are all ripening at the same time, earlier sites of these varieties are being harvested within days of each other
• Paso Robles Crop looks average for Bordeaux varieties with the exception of Merlot having a potential for being above average despite accelerated maturity
• 

  Byron, Eastern Contra Costa County Syrah. Photo by Erica Moyer

  Santa Barbara Pinot Noir coming in fast

• Harvest appears, as of now, to be 10-14 days ahead of the last few years depending upon the variety and region
• Monterey County Pinot Noir and Chardonnay have sized well.  Chardonnay harvest has just started and the crop looks good.  Pinot Noir harvest is around the corner.

Interior

• Early varieties are in:  Chardonnay, Pinot Grigio, Sauvignon Blanc, White Riesling.  Yields were up and down.  Call it average!
• Merlot and Pinot Noir are rolling in.  Some Cabernet Sauvignon has started to roll in as well.
• White Zinfandel is still being harvested.
• The earlier cooler temps helped in sizing.
• The little heat spurt did not hurt before the cool down as Fall is upon us, September 22.

North Coast

• Sauvignon Blanc is looking pretty big, about 75% picked. Napa and Lake County is above average. Sonoma is average to above average
• Pinot Noir is looking big overall, Napa sparkling picked out above average
• Chardonnay is just starting for still wine
• Cabernet Sauvignon is starting to pick (hillside with shallow soils), still a long way before we have a good idea on CS
• Merlot across NC looks like a decent crop, potential to be above average

   

  

  Napa Valley Cabernet Sauvignon. Photo by Mike Needham

Turrentine

MEDIA ADVISORY

 

Release of Wine Grape Crush Report Reveals a Second Consecutive Record Harvest, Experts Explain Market Impacts

 

 

CONTACT:       Steve Fredricks, President / Partner: (415) 847-0603: specialty: grapes and bulk wine throughout California and around the world

                          Brian Clements, Vice President / Partner: (707) 495-8151: specialty: grapes throughout California, especially Napa, Sonoma, Mendocino and Lake Counties

                          Erica Moyer, Broker / Partner: (209) 988-7334: specialty: grapes from the San Joaquin and Sacramento Valleys and the Central Coast

                          Audra Cooper, Broker / Partner: (805) 400-9930: specialty: grapes from the Central Coast

 

WHAT:             The California Department of Food and Agriculture’s Preliminary Grape Crush Report for 2013 is a critical barometer for the wine and grape industry, containing prices and tons of wine grapes crushed during the 2013 harvest. The Crush Report provides growers and wineries insight into the inventory position for the California wine business as a whole, and influences market dynamics for the current bulk wine market as well as the upcoming 2014 harvest.

 

WHEN:             CDFA is scheduled to release the Grape Crush Report at Noon on Monday, February 10, 2014.

 

ANALYSIS:       The Crush Report is likely to show that the total 2013 California wine grape crop increased slightly from the 2012 record harvest.  Similar to 2012, the 2013 growing season was nearly ideal throughout the state, providing an increase in yields over the last several years.  This was especially true in the North Coast, in particular, Sonoma County Pinot Noir and Chardonnay. In the Northern Interior, it will be interesting to look at the size and continued trend of Zinfandel being harvested from white to red wine.  Paso Robles and the Southern Interior suffered from extreme heat which limited production.  This record harvest stretched capacity to its fullest, putting downward pressure on prices for late season grapes and on the bulk market.

 

WHO:               With 41 years of wine industry experience, Turrentine Brokerage, California’s largest wine grape and bulk wine brokerage company, has a team dedicated to be trusted and strategic advisors to wineries, growers and financiers.  Turrentine Brokerage is available to provide comment and analysis on this report and its probable impact on growers, wineries and consumers.

 

                          Turrentine Brokerage will have its experienced team of grape and wine brokers and analysts available all day Monday, and throughout the week, for comment and questions.            

 

Second Consecutive Record Winegrape Harvest,
Experts Explain Market Impacts

by Turrentine Brokerage
February 10, 2014

For Immediate Release

Novato, CA – The California Department of Food and Agriculture’s Preliminary Grape Crush Report for 2013 has been released.  It is a critical barometer for the wine and grape industry, containing prices and tons of wine grapes crushed during the 2013 harvest. The Crush Report provides growers and wineries insight into the inventory position for the California wine business as a whole, and influences market dynamics for the current bulk wine market as well as the upcoming 2014 harvest.

Typically, the Crush Report is a fantastic opportunity for buyers and sellers alike to reflect on the past year, assess supply and demand, and develop a strategy moving forward.  This year, however, there weren’t any major surprises and wineries and growers are keeping their eyes focused on the road ahead to plan strategically for 2014 not knowing the full extent of drought on crop size.

The Crush Report shows that the total 2013 California wine grape crop weighed in at 4.23 million tons.  Similar to 2012, the 2013 growing season was nearly ideal throughout the state, allowing for increased yields per acre.  This was especially true in the North Coast, in particular, Sonoma County Pinot Noir and Chardonnay. In the Northern Interior, Zinfandel grapes continue to transition from blush wine to red wine.  Paso Robles and the Southern Interior suffered from extreme heat which limited production for early varieties like Pinot Grigio.  This record harvest stretched capacity to its fullest, putting downward pressure on prices for late season grapes and on some early bulk market sales.

About Turrentine Brokerage
Turrentine Brokerage, founded in 1973, serves as trusted and strategic advisors to growers, wineries, and financiers and specializes in the strategic sourcing of wine grapes and bulk wine from the major growing areas across the globe. Working with thousands of wineries worldwide, and with over 2,000 growers, this experienced team has negotiated transactions between buyers and sellers valued at more than $2 billion over the past decade.

Turrentine Brokerage is available to provide comment and analysis on this report and its probable impact on growers, wineries and consumers.  Turrentine Brokerage will have its experienced team of grape and wine brokers and analysts available all day Monday, February 10^th and throughout the week for comment and questions.

Contact

Brian Clements	Vice President	(707) 495-8151	Grapes throughout CA, especially Napa, Sonoma, Mendocino & Lake Counties
Steve Fredricks	President	(415) 847-0603	Grapes and bulk wine throughout CA and global import/export
Erica Moyer	Grape Broker	(209) 988-7334	Grapes from the San Joaquin and Sacramento Valleys
Audra Cooper	Grape Broker	(805) 400-9930	Grapes from the Central Coast
Mike Needham	Grape Broker	(707) 849-4337	Grapes from the North Coast

 

Key Insights by Region

General/Statewide

“For the second consecutive year, California produced record tonnage for winegrapes, weighing in at 4.23 million tons—the equivalent of 740 million gallons.  However, the specific tonnage by varietal in each region is more important.  For example, 50% of the increase over last year’s total is attributed to Muscat varieties from the southern San Joaquin Valley.” –Steve Fredricks, President

“Typically, the Crush Report is a fantastic opportunity for buyers and sellers alike to reflect on the past year, assess supply and demand, and develop a strategy moving forward.  This year, however, there weren’t any major surprises and industry drivers are keeping their eyes focused on the road ahead to strategically avoid the obstacles which 2014 could present, namely the drought.” –Brian Clements, Vice President

Napa Valley

“Napa Valley Cabernet Sauvignon, while setting a district record for crop value, did not sacrifice on quality.  A long, moderate growing season allowed grapes to continue to size right up until harvest.” –Mike Needham, North Coast Grape Broker

“As expected, another record price for Napa Valley Cabernet Sauvignon was reached in 2013.  The crop value was up 7% and reached an average price of $5,423 per ton.” –Mike Needham, North Coast Grape Broker

 “As a region, Napa Valley had a great season.  Both growers and wineries were blessed with high quality grapes and growers were blessed with increasing prices being paid from the previous year.” –Mike Needham, North Coast Grape Broker

“The total Chardonnay crop, up 3% from 2012 and 17% above the five-year average, finally broke the all-time record set in 2005. Cabernet Sauvignon, on the other hand, was up 5% from 2012 and 25% above the five-year average, fell 20,000 tons short of the all-time record set in 2005.  Chardonnay was actually flat or down a little in the Interior regions and up in the North and Central Coast; Cabernet Sauvignon was up in all major regions, except – ironically – Napa Valley and Sonoma County, where demand continues to be strong.” –Brian Clements, Vice President

Sonoma County

“History tells us that when we have two large harvests in a row, the markets soften.  In 2013, and moving into 2014, activity has remained relatively strong.” –Brian Clements, Vice President

“We can say that Cabernet Sauvignon is almost ‘bullet proof’.  Although Sonoma County tons crushed dropped to 43,730 tons, it is still the 3^rd largest crop in history and the grape market will continue to be strong for 2014.” –Brian Clements, Vice President

“2013 Chardonnay was 8% larger than 2012 in Sonoma County.  Despite two large harvests, wineries are continuing to look for additional supply on the bulk and grape market.” –Mike Needham, North Coast Grape Broker

“Wineries and growers experienced another record crop from Sonoma County Pinot Noir, up 3% from 2012. At the same time, we saw district average price rise 4% to the second highest ever paid at $3,095 per ton. What is good news for wineries and consumers is that the volume comes when needed and the wines are exceptional.” –Brian Clements, Vice President

“2013 Pinot Noir was the second large crop in a row for Sonoma County, which is good news for wineries and growers to help satisfy the consumers growing demand for high quality Pinot Noir.” –Mike Needham, North Coast Grape Broker

North Coast

“The coastal regions of California helped produce a second record crop without sacrificing quality. This couldn’t have come at a better time with retail sales above $10.00 showing very strong growth.” –Brian Clements, Vice President

Central Coast

“The regions of the Central Coast of California produced a second record crop without sacrificing quality. This couldn’t have come at a better time with retail sales above $10.00 showing very strong growth.” –Audra Cooper, Central Coast Grape Broker

“As expected, and despite the lack of rainfall, the 2013 Cabernet Sauvignon crop in District 8, primarily Paso Robles, was slightly larger than last year. For the third year in a row the district average price increased, hitting a record high this century of $1,356 per ton.” –Audra Cooper, Central Coast Grape Broker

“2013 was a good year all around for San Luis Obispo and Santa Barbara County Pinot Noir. Increased yields helped set a District 8 record for tons crushed without sacrificing quality and yet the district average price remains relatively unchanged.  This increased supply is great for the Central Coast to help satisfy growing consumer demand for high quality Pinot Noir.” –Audra Cooper, Central Coast Grape Broker

Lodi

“Increases in Cabernet Sauvignon production from California’s Central Valley were from new acres planted in the last few years and new acres coming into full production, which is welcome news as consumer demand continues to grow at a healthy rate above $9 per bottle.” –Erica Moyer, Interior Grape Broker

“Monterey experienced a perfect summer season resulting in the second largest crop for Chardonnay and a record crop for Pinot Noir.” –Erica Moyer, Interior Grape Broker

“Prices for the Interior came off the peak from 2012, except for Pinot Grigio.  Most notably, prices were down for Lodi Zinfandel and Lodi Merlot, down 13% and 8%, respectively.  This is due to tonnage in excess of the contract selling at half or less of the contracted price, unlike 2012, when all tonnage, including excess tons were purchased at contracted prices.” –Erica Moyer, Interior Grape Broker

“Pinot Grigio production was down 9% at a time when Pinot Grigio consumer demand is continuing to grow at a healthy rate. Most likely, production was down to extended heat in the southern interior.” –Erica Moyer, Interior Grape Broker

                                    

Striving For Excellence

For three years in the late 70s, legendary Champagne winemaker, Guy Devaux, employed Turrentine Brokerage in a secret project to sample Pinot Noir, Chardonnay and Pinot Blanc grapes from various regions of California and Oregon for the production of luxury class sparkling wine. This complicated and fascinating project eventually became Mumm Napa Valley. After the winery was built and had finished its first crush, Guy invited my wife and me to a dinner at the winery, which was organized to recognize key contributors to the winery's success, including the architect and contractor, the winemaking team and the marketing team. After these folks were commended and applauded, Guy began to describe someone who had diligently labored in the shadows for several years to help them figure out the best regions and sources of grapes to achieve the product they wanted to make. As he spoke, I realized that what he was saying could apply to me and as he continued it became clear that he was in fact talking about me. I literally felt my ears tingle with interest and joy at the recognition!

Some of our clients have recently made our ears tingle through Vineyard and Winery Management magazine. Based on the magazine's survey of the industry, with nearly 1,100 responses, Turrentine Brokerage has been named the best grape and bulk wine broker for 2014. We appreciate the recognition and consider it a good opportunity to revisit the question: What does excellent service look like from our clients' point of view?

Clients have told us that excellence in grape and bulk wine brokerage consists of:

• Knowledge of the possible pitfalls and dependable help in avoiding them  
• Accurate and unbiased advice on the current market, based on many transactions and a long history
• Personal service and an energetic staff who respond quickly to client needs and inquiries
• The ability to add value with creative solutions
• Attention to detail which helps deals go smoothly
• Experience and skill at mediating disputes
• An understanding of the powerful, long-term supply cycles that can often determine success or failure in the wine business

Our goal is to provide excellent service to our clients, service that helps clients take advantage of opportunities, avoid problems and achieve a competitive advantage in a challenging business. 

-Bill Turrentine

 

Selected Recent Sales of Grapes & Wines in Bulk for May 21, 2014.  Courtesy of Turrentine Brokerage, the leading broker of premium grapes and wines in bulk, 415-209-9463, www.turrentinebrokerage.com: 

Bulk Wine

 

Petite Sirah 2012 wine, Paso Robles, 5,000 gallons at $11.00 per gallon

 

Sauvignon Blanc 2013 wine, Napa Valley, 6,000 gallons at $9.00 per gallon

 

Zinfandel 2012 wine, Mendocino County, 8,000 gallons at $8.50 per gallon

 

Cabernet Sauvignon 2013 wine, Lodi, 13,000 gallons at $7.50 per gallon

 

  

Grapes

 

Pinot Noir 2014 grapes, Napa Carneros, 28 tons at $2,900.00 per ton

 

Zinfandel 2014 grapes, Dry Creek Valley, 38 tons at $2,400.00 per ton

 

Pinot Noir 2014 grapes, Monterey County, 150 tons at $1,700.00 per ton

Selected Recent Sales of Grapes & Wines in Bulk for June 2, 2014.  Courtesy of Turrentine Brokerage, the leading broker of premium grapes and wines in bulk, 415-209-9463, www.turrentinebrokerage.com:

 

Bulk Wine

 

Petite Sirah 2013 wine, Livermore, 13,000 gallons at $8.50 per gallon

 

Chardonnay 2013 wine, Napa Carneros, 2,600 gallons at $15.00 per gallon

 

Cabernet Sauvignon 2013 wine, Red Hills, 7,500 gallons at $19.00 per gallon

 

Cabernet Sauvignon 2012 wine, Stags Leap District, 3,500 gallons at $41.00 per gallon

 

Chardonnay 2013 wine, Monterey County, 23,900 gallons at $7.75 per gallon

 

Grapes

 

Chardonnay 2014 grapes, Alexander Valley, 30 tons at $1,920.00 per ton

 

Merlot 2014 grapes, Mendocino County, 25 tons at $1,300.00 per ton

 

Chardonnay 2014 grapes, Mendocino County, 300 tons at $1,150.00 per ton

 

 

Steve Fredricks, President of Turrentine Brokerage was recently interviewed by Paul Franson of Wines & Vines. Steve discusses the latest publication of the Turrentine Outlook in an article entitled, “Turrentine Forecasts Shortage of Sonoma Cab”… Read the entire article.

 

 

 

 

Turrentine President Steve Fredricks doesn’t mince words when it comes to having confidence in his company.

“With more than 41 years in this business, we know the supply side of the wine business,” Fredricks asserts. “The complexities in the marketplace can be confusing and create some real bumps in the road. Our job is to iron out those bumps and help all parties find a reasonable way to move forward.”

Turrentine Brokerage has been helping buyers and sellers of wine grapes to navigate the choppy waters of the industry marketplace since it was founded in 1973. At that time, California was crushing one million tons of grapes per year. That number has grown exponentially – to nearly four million – and with that growth came enormous fluctuations and uncertainties.

“In the wine business there are a lot of moving parts,” Fredricks explains. “You have to look at bearing and non bearing acreage, not just from totals in the state, but region by region. You have to know about a Napa versus a District 12 Cabernet Sauvignon, or a Sonoma County versus a Lodi Chardonnay.”

Arming their customers with relevant industry knowledge and giving them the critical foundations to create solid business partnerships is what Turrentine does best.

“It’s important to look at the market as a whole,” Fredricks attests. “For instance, if I’m selling Chardonnay for $9 a bottle, where is the supply that will support growth of that price point? What’s the spot market pricing for grapes right now? For bulk wine? If Paso Robles is increasing its acreage of Cabernet today, who will be the buyers four years from now? Understanding both long-term and short-term cycles is the basis for good decision-making.”

In addition to ongoing client consultation, Turrentine Brokerage produces an annual, comprehensive industry report called The Turrentine Outlook. The publication contains up-to-date, global market analysis for leading varietals such as Chardonnay, Pinot Grigio, Cabernet Sauvignon, Merlot and Pinot Noir. Fredricks notes that this year’s report includes Zinfandel, Petite Sirah and Muscat varietals as well.

“When they have that knowledge, that type of essential information, our customers have the ability to be ahead of the curve and position themselves successfully into the future,” Fredricks affirms.

Contact Information
For a copy of the latest Turrentine Outlook and more information on Turrentine Brokerage services, please visit www.turrentinebrokerage.com

                  

 

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	↘	↘	Strong
Sonoma County	↘	↘	Strong
Other North Coast	↘	→	Strong
Central Coast	↗	↗	Moderate
Northern Interior	↗	↗	Weak to Moderate
Southern Interior	↗

 

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	→	↗	Moderate
Sonoma	↘	→	Moderate
Other North Coast	↘	↗	Weak
Central Coast	↗	↗	Weak
Northern Interior	↘	↘	Weak
Southern Interior	↘

 

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	↘	↗	Moderate
Sonoma	↘	↗	Moderate
Other North Coast	↘	→	Moderate
Central Coast	→	↗	Weak
Northern Interior	↗	↘	Weak
Southern Interior	→

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.

Turrentine Brokerage, California’s leading broker of wine grapes and wines in bulk, is pleased to announce that a new broker has joined its growing team. Neil Koch (rhymes with scotch) grew up among the vineyards and wineries of Napa Valley. He graduated from Vintage High School and studied enology and viticulture at both Napa Community College and Fresno State University. He worked in production for Seavey Vineyards and Bryant Family Vineyard and became enologist and cellar master at Lewis Cellars. Then he moved to the oak side of the business, selling barrels in Northern California and Washington state for Mistral Barrels, Bouchard Cooperage and Seguin Moreau.

Neil has joined the Turrentine bulk wine brokerage team, working mainly with clients in the North Coast and Northern Interior regions. Neil lives in Walnut Creek and is an avid cyclist. He can be reached at Turrentine Brokerage’s headquarters in Novato: 415-209-9463.

The understanding of short and long-term supply dynamics are essential to success in the wine industry. It is not a mystery that we stress both. At the Unified Wine Symposium, you will undoubtedly hear several trends, but it is worth talking to Turrentine Brokerage to see how your individual supply situation can be maximized in the long-term. 

For the first time since 2006, more than 14 million gallons of wine for sale in bulk has been carried over from prior vintages; and for the first time since 2009, large quantities of multiple vintages of most varieties are for sale. However, comparing 2014 to 2009, Turrentine Brokerage has had a 60% increase in the total number of sales of wines in bulk and the transactions have been more focused on smaller quantities of higher quality wines. While there have been more middle and high end buyers, there have been few opportunistic buyers for the large volumes of Interior varietals available at low prices. 

 

Cabernet Sauvignon

Napa Valley/Sonoma County

• Bulk Supply- Low, number of gallons actively for sale is down
• Bulk Demand- High, recent sales for 2013 Napa between $28 to $32, sub-appellations between $38 and $42
• Grape Demand- Remains strong with buyers a little less aggressive than last year
• Planting- Few open acres being planted and some redevelopment.

Other North Coast

• Bulk Supply- Low, starting to see some 2014's listed
• Bulk Demand- Steady with recent sales for 2013 around $17 to $19
• Grape Demand- Steady with buyers out early for resigns
• Planting- Increased supply from newly bearing acres will produce more in 2015

Central Coast

• Bulk Supply- 2013 decreasing; 2014 wines beginning to be listed
• Bulk Demand- Slow demand with increasing quality standards; recent sales $12 to $14 for good quality lots
• Grape Demand- Slow
• Planting- About 3,500 new acres that will add significant tonnages annually

California Appellation

• Bulk Supply- Increasing. Plenty of both 2013 and 2014 on the market
• Bulk Demand- Increasing quality standards; recent sales in the $5 to $8 range
• Grape Demand- Slow
• Planting- New acres went in the last few years and roughly 6,000 non-bearing acres will add to supply over the next couple of years

 

Chardonnay

Sonoma County

• Bulk Supply- V14 wines beginning to be listed
• Bulk Demand- Steady demand, but less than supply, quality standards increasing; recent sales in the $13 to $15 range
• Grape Demand- Steady but slower than last year at this time

Central Coast

• Bulk Supply- Good supply and increasing volumes actively for sale
• Bulk Demand- Less than supply, quality standards are up, recent sales in the $8 to $9 range
• Grape Demand- Slow

 

Pinot Noir

Sonoma County

• Bulk Supply- Steady with 2013 and 2014 wines available.
• Bulk Demand- Steady with increasing quality standards and price sensitive for mid-range programs; recent sales in the $17 to $19 range
• Grape Demand- Steady, some buyers out early on resigns but focused on the value vineyards for mid-range programs
• Planting- Some increased tons from newly bearing acres in 2015

Central Coast

• Bulk Supply- Increasing due to another good crop in 2014; wines from Monterey County and Santa Barbara available
• Bulk Demand- Steady, but focused on quality wines for mid-range programs or from buyers looking to upgrade a California appellation wine, recent sales or high quality lots in the $14 to $16 range
• Grape Demand- Slow

California Appellation

• Bulk Supply- Increasing from a good 2014 crop, but choices are still limited; competing with some of the supply offered for sale from the Central Coast
• Bulk Demand- Steady with increasing quality standards; recent sales in the $6.50 to $7.50 range
• Grape Demand- Steady with very few grapes available
• Planting- Some increase in tons but planted under contract and not available

 

Merlot

Napa Valley, Sonoma County, and Other North Coast

• Bulk Supply- Steady
• Bulk Demand- Steady; still riding coat tails of Cabernet Sauvignon; recent sales in the $8 to $10 range for North Coast, $15 to $18 for Napa and Sonoma
• Grape Demand- Slow

Central Coast and California Appellation

• Bulk Supply- New gallons from a good crop in 2014
• Bulk Demand- Very low, supply greatly exceeds demand
• Grape Demand- Very low

 

Within the context of the overall market, every grower and brand owner faces his or her unique supply and demand challenges. Contact our knowledgeable team of grape and bulk wine brokers today to avoid pitfalls and to make use of market conditions to achieve your goals.

 

 

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.

Bulk Wine

Malbec 2014 wine, Lodi, 5,000 gallons at $7.50 per gallon

Merlot 2013 wine, Paicines, 6,400 gallons at $6.50 per gallon

Cabernet Sauvignon 2014 wine, Alexander Valley, 12,300 gallons at $22.00 per gallon

Zinfandel 2014 wine, Lodi, 7,200 gallons at $5.00 per gallon

 

Grapes

White Riesling 2015 grapes, Paso Robles, 50 tons at $600.00 per ton

Grenache 2015 grapes, Paso Robles, 24 tons at $1,400.00 per ton

Bulk Wine

Pinot Noir 2014 wine, Paso Robles, 2,000 gallons at $15.00 per gallon

Merlot 2014 wine, Chalk Hill, 10,400 gallons at $15.00 per gallon

Cabernet Sauvignon 2014 wine, California, 25,000 gallons at $7.25 per gallon

Zinfandel 2014 wine, Lodi, 18,000 gallons at $6.50 per gallon

Cabernet Sauvignon 2015 wine, Paso Robles, 2,000 gallons at $21.00 per gallon

 

Grapes

Chardonnay 2016 grapes, Sonoma Mountain, 60 tons at $2,100.00 per ton

Chardonnay 2016 grapes, Oakville, 55 tons at $2,300.00 per ton

Pinot Noir 2016 grapes, Yorkville Highlands, 55 tons at $2,300.00 per ton

 

Novato, CA – The Turrentine Brokerage team is proud to announce the release of Issue 16 of The Turrentine Outlook: Forecasts and Strategies for a Competitive Advantage©. The information in The Turrentine Outlook sets a foundation that illustrates the long-term cycles of the market, and is designed to be supplemented with specific advice and strategy for your individual situation. This publication draws upon Turrentine Brokerage’s real world experience and unique supply data to analyze changes in supply and demand for eight key varietals in the major regions across California and internationally. The report also suggests strategy options for a competitive advantage.

Highlights in this issue include:

• The potential impacts on the wine and grape markets from:
  • The increased volume of wines and grapes sourced from northern interior to compete on store shelves above $10.00 per bottle
  • Consolidation and distribution
  • Land use restrictions and accessibility to water
• Factors strengthening the market and those weakening the market
• Supply and demand driven analysis for Cabernet Sauvignon, Pinot Noir, Chardonnay, Merlot, Pinot Grigio, Zinfandel, Petite Sirah and Muscat varieties

Excerpt from Central Coast Chardonnay

“Grapes from the Central Coast, including Crush Districts 6, 7 and 8, account for roughly 25% of the Chardonnay crushed in California and are extremely important because they supply brands covering the full spectrum of price points. The 2015 crop was 31% below 2014, bringing inventories much more into balance in the short-term. The market for 2016 grapes was more active early in the year, especially in the cooler regions of Monterey County and Santa Barbara County.  The bulk market was also more active than in the previous three years.

The current perception of the 2016 crop is for an average crop with early projections based on counts of two clusters per shoot; however, there are singles out there as well. The winter of 2015-2016 provided more water than in recent years, and should be enough to properly farm throughout the 2016 growing season. In the long-term, the political effects from the drought have resulted in increased farming regulations, leading to even more scrutiny on water use, increased farming and development costs, and delays.

It seems likely that consumer demand will continue growing at a healthy clip from $8.00 up to $15.00 per bottle. The competition for consumers purchases in this price-point, however, will also be strong. In particular, it is hard to predict the outcome of the continued and concerted efforts to use more northern interior Chardonnay grapes and wine in order to supply a larger percentage of the Chardonnay sold in this price range. With this competitive development, it is difficult to know if the production of Central Coast grapes as well as the production of Chardonnay from competing regions will surge ahead of demand or if growing demand will match, or even exceed, the growth in supply. Growers will want to redouble their work on quality to help justify the premium paid for cool region Central Coast Chardonnay while still keeping control of costs. Brand owners will want to keep tinkering with the puzzle of how to best deliver stupendous perceived quality to the consumer at a highly competitive price.

The Turrentine Outlook©

The Turrentine Outlook is produced by a team of wine industry veterans with an understanding of both strategic and tactical actions necessary to capture a competitive advantage in the marketplace. This report draws upon a robust pool of information, both proprietary and public, that has been refined and corrected in accordance with expert opinion and real world practice. The Turrentine Outlook delivers data snapshots for eight key varieties by region and forward looking analysis that are not available anywhere else, thus shedding a revealing light on supply dynamics.

Supply and demand is analyzed with the help of multiple graphs including: bearing vs. non-bearing acres and tons crushed, spot market versus district average grape prices, bulk wine availability, collateral values of wines in bulk, tons and values of grapes grown by district, international pricing and estimated price per gallon landed in California duty paid, and Turrentine Wheel dynamics for each variety at various price points.

About Turrentine Brokerage

Turrentine Brokerage, founded in 1973, serves as a trusted and strategic advisor to growers, wineries, and financiers, specializing in the strategic sourcing of wine grapes and bulk wine from the major growing areas across the globe. Working with thousands of wineries worldwide, and with over 2,000 growers, this experienced team has negotiated transactions between buyers and sellers valued at more than $2 billion over the last decade. Widely recognized as the leading expert in wine business supply cycles, Turrentine Brokerage provides unique insight into the complex market dynamics that can make or break growers, brands, and financiers.

Contact

To subscribe to The Turrentine Outlook, please visit www.turrentineoutlook.com. For more information, please call Steve Fredricks or Daniel Tugaw.

Steve Fredricks, President (415) 209-9463

Daniel Tugaw, Market Researcher & Analyst (415) 209-9463