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Wineries seek new SJV supply

No one is singing “Happy Days are Here Again,” but wineries are out early looking for additional San Joaquin Valley wine grape varieties to purchase this season. They have not done that for at least two years.

Bronco Winery's Charles Shaw Wine, alias “Two-Buck Chuck” and the other “super value” $1.99 per bottle imitators are draining tanks of surplus wine, and wine grape demand is increasing.

Central California Winegrowers association (CCW) president and valley grape grower Carson Smith of Fresno says a turnaround from the low prices of the past two to three years may be at hand in 2003.

“Prices are improving for some varieties this year. Wineries are out looking for some varieties early, and that has not happened in the last three or four years,” said Smith.

Allied Grape Growers president Nat DiBuduo said there is winery interest now in SJV Merlot, Ruby Cabernet, Grenache, and Chardonnay and yes, even French Colombard.

“You have to remember that today there is only 50 percent of the French Colombard acreage that there was 10 years ago. If there was a variety that we may have pulled out too many vines, too soon it may be French Colombard,” said DiBuduo.

“We still face overall low price and oversupply problems like we have the last two season, but optimism is returning in some varieties,” said Smith. He cited Zinfandel for White Zinfandel for wine.

“We are also seeing a separation in pricing French Colombard and Chenin Blanc for wine rather than concentrate,” said Smith. The last two years those white varieties were in oversupply and they could only be marketed in the bottom of the market for concentrate along with the huge oversupply of Thompson seedless grapes.”

Wineries calling

“In mid June, wineries started calling us back,” said DiBuduo. “No one would return our calls last June.”

Vineyards have been pulled or abandoned and supplies are down. Shatter has also been significant in some wine varieties. That also is reducing the potential supply.

However, it is the “Two-Buck Chuck” phenomenon that may be playing the biggest role in the turnaround.

“Growers cannot make any money with $2 super value wines, but the surplus is moving and consumption is up,” said Allied Grape Growers president Nat DiBuduo.

“There is no fair return on grapes to the grower for $2 wine, but those cheap grapes will eventually disappear. Hopefully we will have some “Three Buck Chuck” or “Four Buck Chuck.” Growers get a fair return for their grapes at those bottle prices,” said DuBuduo.

This super value wine craze is one of the most amazing things to happen to the wine industry in recent times. It far surpasses the wine cooler craze that took the industry by storm in the 1980s, taking surplus white wine and mixing it with citrus juice. Almost as quickly as the wine tanks were drained, wine coolers disappeared.

Like the cooler craze, the super value rage is strictly a San Joaquin Valley phenomenon that may be hurting premium coastal wines.

Cannibalizes prices

“Two Buck Chuck is cannibalizing higher priced wines…the $7 fighting varietals. And people are now looking for the $15 value rather than paying $25,” said DiBuduo.

While wineries are out looking for certain SJV grapes, North Coast and Central Coast wineries are looking to reduce tonnage and lower prices to growers this year because their wine prices are being forced down by the $2 wines, said DiBuduo. “That is the unfortunate down side to this Two Buck Chuck craze,” he added. “It is hurting growers and wineries in those coastal areas.”

What is amazing DiBuduo about Bronco's Charles Shaw is that it is such a craze that is being served at fashionable dinner parties.

“I was at a chateaubriand dinner not long ago and they served Two Buck Chuck,” said DiBuduo. “What was more significant is that people drank it and enjoyed it.”

That is important, he pointed out, because it proves the valley can produce a good quality grape that can be made into a good quality wine.

“This also makes it obvious that the valley can compete with cheap imports, which are taking more and more of our market,” said DiBuduo.

Smith also noted that the super value wine boom is pulling in more California wine drinkers. “The price is taking the risk out of wine drinking for many people,” said Smith. “It is so cheap people are willing to buy cases rather than just bottles. That is cleaning out the surplus in a hurry, which is reflected in this year's early prices.

“We have not seen wineries come out this early in awhile,” added Smith.

While Smith and DiBuduo are a bit more optimistic about wine grapes, DiBuduo said the “jury is still out this year on the Thompson deal for concentrate.

“We still do not know how many Thompson vineyards have been pulled; abandoned or spur pruned so as not to produce a crop,” said DiBuduo. He is hopeful production will be down significantly to improve prices on the lowest end of the grape crush market.

Late crop start

“I am a bit concerned because I have seen vineyards that appeared to be abandoned for this year that people are starting to disk and irrigate in June. That is unfortunate, and it will be difficult for them to make a crop starting at this late date,” said DiBuduo.

CCW, formed two years ago, seeks to improve viticulture practices in the valley to improve grape quality. It recently held its second annual meeting at the California State University, Fresno Viticulture and Enology Center.

CCW was formed when SJV wine and concentrate prices dropped to unprecedented low levels in 2001. CCW was created to bring together educators and researcher to “restore” the valley's wine grape industry with research to develop wine grape varieties that will make good wine in a hot, dry climate and to create improved business opportunities for grape concentrate producers as well as public awareness of quality wines produced from SJV grapes.

Smith said there are some “exciting opportunities” created through CCW to improve the plight of SJV wine grape producers. Much if it centers on production practices to improve wine grape quality and therefore prices. DiBuduo said CCW has begun holding workshops to implement elements of the “Code of Sustainable Winegrowing” developed by the California Association of Winegrape Growers (CAWG) and Wine Institute.

A self-assessment workbook was developed by CAWG and WI to encourage producers to evaluate and improve wine grape growing sustainability. The concept has been widely promoted in premium wine grape growing regions of the state, but this effort by CCW is the first to introduce it to SJV wine grape growers, who produce 60 percent of the state's wine grapes from Modesto to Bakersfield.

CCW has sponsored three meetings in the valley to encourage growers to utilize the code, and about 80 producers attended.

“Some of what is in the code is not pertinent to our growing practices and the prices we get for our grapes,” but DiBuduo said it nevertheless is a “powerful tool” to improve wine grape quality in the valley.

CCW is also supporting a deficit irrigation study to improve wine grape quality.

Smith said CCW also has been instrumental in pushing forward a unique joint research effort between Fresno State and the University of California through its Kearney Research Center.

Mechanical pruning

The research project centers on evaluating wine quality from mechanically-pruned vineyards using deficit irrigation.

“We want to see if mechanical pruning produces wine equal to or better than hand-pruned vineyards,” said Smith. “Here in the valley we have to look at ways of saving production costs and mechanical pruning is one. However, we do not want to jeopardize wine quality by mechanically pruning. That would be counterproductive to what we are trying to do through CCW. Research is the way to answer those questions.”

CCW has developed a Web site and brochure that will be unveiled at the annual meeting. It is designed to tell the valley's wine story as well as a vehicle to keep growers informed about research.

“We will publicize what we are calling tailgate meetings at the sites of some of this research to give growers and vintners an ongoing idea of what we are learning on how to improve wine grape quality and not have to wait until a research paper is written,” said Smith.

“The whole idea behind CCW and what we are trying to do is not only to help producers now with improving wine grape quality but prepare us all for the time when new vineyards will be planted. We all want to be better informed on what works for us so we can plant smarter next time around,” said Smith. “The time will come when more vineyards will be economically viable to meet wine demand.”

And, things are improving.

e-mail: [email protected]

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