(Allied Grape Growers is California’s largest wine marketing cooperative with more than 600 members statewide. Information is this article is gleaned from the latest Allied newsletter.)

With the relatively large 2012 crop came the expectation that the 2013 grape market would be less active than last year. That has proven to be somewhat true, but only in the realm of “hyper” activity that leads to rapidly increasing prices.

Grapes are being traded, at least to the extent they are even available, since most of them are tied up under multi-year contracts. However, there is no “reckless competition” for grapes experienced last year. Pricing seems to be at or slightly above last year’s levels.

Depending on the variety, the coastal market is arguably more robust than last year at this point. With much less spot market fruit available, buyer interest is high. Reds in particular have brought great interest in 2013; Cabernet Sauvignon specifically.

Coastal areas outside of the most premium growing regions seem to be bringing the most interest for all varieties. This is due to buyers wanting to purchase great quality coastal fruit that allows them to average down the grape cost of their higher end programs. With that being said, there is much less hyper-activity around Napa Valley Cabernet and Sonoma County Pinot Noir. There is still strong demand, but buyers seem to be more interested in averaging down the cost of their high-end programs rather than fervently competing for additional high-end fruit at historically high prices.

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Sonoma County Cabernet Sauvignon market has benefitted from the runaway Napa Valley Cabernet pricing from 2012. Many buyers are looking to Sonoma and other areas for Cabernet Sauvignon to fill needs at “affordable” prices.” Multi-year contracts are common in the coastal areas with even white grapes experiencing strong demand. Sauvignon Blanc sales have been impressive this spring. The market for Sauvignon Blanc has been about as solid this year as it has been in a decade. Chardonnay hasn’t disappointed, especially considering how large last year’s Chardonnay crop was. Pricing hasn’t been overly aggressive, but interest has been high across the board, and Chardonnay has been selling fairly well.

The Lodi grape market is anticipated to be strong again this year, with considerable early interest in reds. Even Zinfandel for red production seems to be in strong demand, despite last year’s impressive crop. Some Chardonnay offers have started out a bit lower than last year’s contract prices, but growers have not been quick to move on them with the size of the Chardonnay crop being in question. Available Cabernet Sauvignon brings considerable interest. Pricing is mostly similar to last year, although a run-up of the spot market hasn’t seemed to take place just yet. Most buyers and growers alike are intently curious about the size of the crop in Lodi/Clarksburg after last year’s substantial crush from those regions.

Bulldozers firing up?

Any quietness in the central and southern interior market has been due to the lack of grapes available, not lack of interest. For the few contracts that expired last year and are up for renewal, buyers are eager to renew and, in most cases, quick to offer last year’s contract price as a minimum. Many buyers are also quick to offer on grapes that have come off of contracts with another buyer. This is particularly true for all red grapes, including Zinfandel and Grenache for blush programs. The white grape market in the interior is a little less exciting, with most buyers showing passive interest in generics and mild interest in Chardonnay. The floral market seems to be very warm still, but not smoking hot, like in recent years.

With bunch counts noticeably higher in 2013 (Allied’s average was 38 bunches per vine compared to last year’s 26.), the Thompson seedless market has been relatively quiet. No substantial market activity is expected until later this summer, as the raisin industry needs to decide pricing and valuation strategies. If the price is lowered much at all, bulldozers will fire up this winter. The question that must be answered is whether or not short term buyer gain would justify the long-term supply loss. The crop looks healthy on raisin varieties; the crop will average over 10 tons per acre, based on bunch counts and historical bunch weights. But considering that it is generally the “cheapest” grape out there, growers won’t keep them in the ground if they lose too much on price. Almonds and other alternative crops continue to look better.

Looking to the future,there is optimism. Demand for California wine is outpacing the current supply of California-grown grapes. The demand for fruit produced by quality wine growers is strong, will be healthy for quality-driven wine growers for this harvest, according to Allied President Nat DiBuduo. “Prices are stable and and increasing in some case increasing, and I believe we will see fair prices with multiple-year contracts being offered,” he said.

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