SOURCE: Turrentine Brokerage

Turrentine Brokerage

February 10, 2010 20:35 ET

Trends Shaping the Future of California Wine Revealed in Grape Crush Report, Experts Explain

NOVATO, CA--(Marketwire - February 10, 2010) - Chardonnay, the largest white wine variety, was up a substantial 28% statewide in 2009 compared to 2008, which is an increase of 26.5 million gallons or almost 133 million bottles (over 11 million cases). The strongest yields were mostly in the areas supplying value-priced brands which are growing but also face competition from low-cost imports.

"Vineyards in the Northern Interior damaged by frost in 2008 came back with a vengeance in 2009, resulting in a 49% increase in production driven by high yields per acre."

- Erica Moyer, Partner/Broker, Turrentine Brokerage

Cabernet Sauvignon, which is the largest red wine variety, was up a substantial 35%, the equivalent of nearly 8 million cases, from the very light 2008 harvest. Compared to the five year average, however, it was only a 2% increase which is not much for the fastest growing major variety. The large rebound over 2008 will likely be a benefit for brands sourced from the Central Coast and the Interior. The average crop in Napa Valley and Sonoma County is probably in excess of current sales.

"Cabernet Sauvignon production from Lodi was up by 7.25 million gallons or over 36 million bottles of wine. This increase was great news in Lodi where demand has surged."

- Erica Moyer, Partner/Broker, Turrentine Brokerage

"Cabernet Sauvignon in Napa Valley and Sonoma County was in line with our forecasts and the early reports on quality are very good. The available supply and the high quality will be a boon for consumers."

- Brian Clements, Senior Partner, Turrentine Brokerage

As predicted by The Turrentine Outlook and now confirmed by the Grape Crush Report, Pinot Noir, which is still growing rapidly, increased by over 47% or nearly 3.5 million cases. Monterey County, which has seen substantial new plantings of Pinot Noir vineyards in recent years, overtook Sonoma County as the largest producing region for Pinot Noir in the state.

"Pinot Noir production in the Interior Regions of California, which increased by over 110%, 25,000 tons or 20 million bottles of wine, represents a continuation of major increases in production of Pinot Noir in warmer areas. This lower priced Pinot Noir, coming on during challenging economic times, will provide the wine to fuel rapidly growing sales of value-priced Pinot Noir."

- Bill Turrentine, President, Turrentine Brokerage

The 2009 grape crop was much larger than 2008, increasing by 23% or nearly 700,000 tons. The increase in the Northern Interior was especially pronounced. The crop on the coast was mixed. Despite current economic conditions, wine sales continue to grow, especially at price points below $10 per bottle, which are sourced primarily from the areas of the Interior that had a large crop.

According to the Grape Crush Report, Merlot jumped 100,000 tons over the very light 2008 harvest. Most of that increase came from the Interior regions, especially from the Lodi area. The Central Coast also had a strong recovery after a small 2008 harvest. But many acres of Merlot vineyards have been removed since 2005, when the massive Merlot crop was almost 100,000 tons more than it was this year.

"So many acres of Merlot have been removed it is surprising that the state produced such a large crop of Merlot, a total of over 326,000 tons."

- Steve Fredricks, Managing Partner, Turrentine Brokerage

In 2009 newly planted vineyards boosted production for Pinot Grigio which is the fastest growing large white variety in the United States.

"In great news for consumers, Pinot Grigio, an Italian varietal that does exceptionally well in California, had a record crop in 2009. Pinot Grigio increased by 61%, equal to over 9 million gallons or over 45 million bottles of finished wine."

- Bill Turrentine, President, Turrentine Brokerage

According to proprietary research conducted by Turrentine Brokerage, the overall inventory position of the industry is much better today than it was after the record harvest of 2005. Though everyone is dealing with the current economy, the long-term challenge will be to prepare for the growing purchases of wine by Millennial consumers and the eventual economic recovery.

"The overall industry position is good for most varieties except for Chardonnay. Many brands at higher price points are experiencing difficulties. When the economy recovers and consumer confidence grows, the excess at the high-end is likely to disappear and eventually a shortage will develop."

- Brian Clements, Senior Partner, Turrentine Brokerage

"The Interior regions of the state are well placed in the sweet spot of the California wine business supplying the value-priced brands that are experiencing the strongest rate of growth."

- Steve Fredricks, Managing Partner, Turrentine Brokerage

"In San Luis Obispo and Santa Barbara Counties, the 2009 crop was certainly larger than the very light 2008 crop, but relatively close to the 5 year average for most varieties, with two exceptions: Pinot Noir (up 47% from 2008 and 31% above average) and Pinot Grigio (up 60% from 2008 and also 31% above average)."

- Matt Turrentine, Grape Broker, Turrentine Brokerage

About Turrentine Brokerage

Turrentine Brokerage, founded in 1973, serves as trusted and strategic advisors to growers, wineries, and financiers and specializes in the strategic sourcing of wine grapes and bulk wine from the major growing areas across the globe. Working with thousands of wineries worldwide, and with over 2,000 growers, this experienced team has negotiated transactions between buyers and sellers valued at more than $1 billion over the past decade.

Contact Information

  • Contact:
    Brian Clements:
    (707) 495-8151
    specialty - grapes from all of California, especially Napa, Sonoma,
    Mendocino & Lake Co.

    Steve Fredricks:
    (415) 847-0603
    specialty - grapes and bulk wine from all of California and around the

    Bill Turrentine:
    (415) 209-9463
    specialty - grapes and bulk wine from all of California and economic

    Erica Moyer:
    (209) 988-7334
    specialty - grapes from the San Joaquin and Sacramento Valleys and the
    Central Coast

    Matt Turrentine:
    (805) 312-1828
    specialty - grapes from the Central Coast