Thursday, October 15, 2009

Rain, rain go away . . .

Trace amounts last night, very moist out today. Yuck:( Still can't get back into the vineyards. Next pick on Monday maybe? Hope it dries out quickly!

Hear reports out of Napa that grape yields are down due to the "boring", uneventful weather this year, but that quality potential is extremely high. Grape supply, can you say, inventory challenges? We know, 'premium' wine sales are sluggish at best and that well respected properties have become grape sellers themselves this year while they try and undig from backed wines. But believe it or not we had a balanced supply picture in California coming into the 2009 harvest.

So to follow up on this point, somewhere in the last 9-18 months, on top of the 'balanced' california wine grape market many wineries collectively purchased the equivalent of 20% of the existing California grape supply in foreign juice, (mostly Australian). This tipped the scales on the low end. So slowing premium wine sales and a perceived oversupply on the 'low end' quashed any market opportunity.

Stuck in the middle with 'premium' North Coast wine grapes and no where to go!

Right now, there are many branded California, USA products that include globally sourced juice and as far as I can tell, according to existing rules they are entitled to source up to 25% in a given product. Isn't this what you call commoditization? Where's the integrity in California products that have bought into this shell game?

I agree that the legacy of the "Great Recession" we currently experience is likely lower consumer spending. No one predicted the meltdown of our global economy. It's a mess out there. But business decisions were made which will likely affect our grape market for years to come. Like all others, our business cycles. But this 'bottom' just feels harder than others and for good reason. Faced with a common dillema to shift with our market or perish at our own free will. We will continue to produce, estate grown wines from 100 % California grown grapes.

Our winery is at capacity this year, and wine sales are plugging along nicely. Indeed we have 'quality' problems. But on the vineyard side of things, as a result of lower grape revenue, and thus less available cash, we will have to make some uncommonly hard decisions for the upcoming season(s).

But, onward and upward!

No comments:

Post a Comment