Growers examine changes in grape market

How did rap music make more people drink moscato? Should grape growers plant more vineyards with cabernet sauvignon or merlot? And how is the North Coast wine industry going to deal with the state's new frost regulations?

All were topics of discussion Thursday at the 21st annual Dollars and $ense Seminar, organized by the Sonoma County Winegrape Commission.

The conference drew about 500 grape growers and wine industry executives seeking insights into the rapidly changing market for North Coast grapes.

Grape prices have risen sharply, but wineries are only just beginning to sell bottles without discounting prices, said Brian Clements, vice president with Turrentine Brokerage, a Novato wine and grape broker.

Lighter than normal harvests, along with other factors, have reduced bulk-wine supplies to the lowest point in a decade.

Currently, there are 4 million gallons of bulk wine on the market, down from about 25 million gallons in 2002. As the supply of bulk wine tightens, wineries began paying higher prices for grapes in 2011, although they have not yet returned to peaks reached in 2008.

"This is the first time that I've been involved in a flip in the market that isn't about sales," Clements said. "This flip is about inventory. Mother Nature kind of flipped this market ... and that makes me a little nervous."

On the consumer side, there has been a resurgence of confidence. More consumers are starting to drink wine and core wine consumers have enjoyed low rates of unemployment, said Mike Colicchio, client business partner at Nielsen.

"However, when we talk to consumers and ask, &‘Is the country still in a recession?' the overwhelming majority say &‘Yes,'" Colicchio said.

Drinkers are scooping up moscato, sweet wines, red blends and unoaked chardonnay in growing numbers, Colicchio said.

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