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Wine grape market shifts in game change

Wine grape market shifts in game change

A looming grape shortage and growing demand for California wines have driven grape prices higher, with some grape prices doubling in the span of a year. And wineries that were hit hard by the recession are exploring alternative ways to maintain lower prices for consumers, even while their production costs are rising.

From the Press Democrat:

The wine grape market has shifted so quickly and dramatically that wine industry veterans are calling it a game change.

A looming grape shortage and growing demand for California wines have driven grape prices higher, with some grape prices doubling in the span of a year. And wineries that were hit hard by the recession are exploring alternative ways to maintain lower prices for consumers, even while their production costs are rising.

These changing dynamics were recurring themes at the 2012 Vineyard Economics Seminar in Napa on Tuesday, which drew hundreds of winery executives, brokers, grape growers and bankers.

Tensions are growing between grape growers, who are demanding high prices for their crop, and wineries, which are hesitant to impose sticker shock on consumers who are still holding on to their dollars.

Contracts are shifting to long-term agreements with higher prices, pleasing growers. Growers and wineries are trying to replant vineyards but dealing with limited nursery supplies, pleasing neither. And wineries are looking to less expensive regions to buy their grapes.

For more, see: Big shift in grape market impacts North Coast wineries, growers

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