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Wine Grape Broker Warns Market Already Tight for 2017

February 2017
by Andrew Adams

Santa Rosa, Calif.—The 2016 harvest in the North Coast was good—and in some cases may even have been remarkable—but demand has remained so strong since the short harvest of 2015 that the grape market remains tight.

Speaking at the Sonoma County Winegrowers’ annual Dollars & Sense conference held Jan. 12 at the Luther Burbank Center for the Arts, Glenn Proctor, a partner with global wine and grape broker The Ciatti Co., said attendees could be justified in playing a little hard to get this year when it came to selling their grapes. “The market is relatively tight,” he said.

Premiumization remains the big-picture trend, and just as demand increased for high-quality wine grapes to supply these higher priced wine programs, 2015 saw yields drop by nearly 30% in both Napa and Sonoma counties. The harvest also came in lower than normal in other coastal counties such as San Luis Obispo and Monterey.

Yields in the interior valleys were normal to good in 2015, but demand for those grapes has softened. In 2016, the situation was reversed: good harvests on the coast with shorter yields in the interior.

Yet the market for 2017 is looking similar to 2016, with strong demand and buyers out early trying to pin down the grapes they need. Current spot market prices for Sonoma County grapes include: Chardonnay for $1,700-$2,700 per ton; Cabernet Sauvignon for $2,800 - $3,800 per ton, and $2,700-$4,800 per ton for Pinot Noir.

Proctor also revealed some insights from Ciatti’s annual survey of its clients about their grape and wine needs for the coming year. He said Cabernet Sauvignon and Chardonnay are the most sought after grapes with Zinfandel the least needed, possibly the result of a shift in the market toward red blends.

Another Ciatti partner, Chris Welch, followed Proctor and said the current bulk wine market is “overall balanced statewide.”

He said Russian River and Sonoma County Chardonnay is fetching high prices with wineries also seeking wine from Monterey and Lake counties to blend down costs or improve California appellation programs. Sauvignon Blanc is in short supply, and Welch said there’s large demand for the varietal.

There’s not as strong demand for bulk Zinfandel, and Welch said Pinot Noir continues to be highly sought after.

Welch said the market may have seen its peak for Napa Cabernet.

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