Grape, Nut & Tree Fruit Expo
State of the Wine & Concentrate Industry
Nat DiBuduo
President CEO
Allied Grape Growers
November 18, 2014
Industry Update
• Today’s Talking Points:
•
Wine Shipments
•
Imports/Exports
•
Production/Supply
•
Market Demand
•
Concentrate Market
•
Vineyard Sales and Pullout Activity
Wine Shipment Trends
Wine Shipment Trends
Wine Shipment Trends
• 2014 Wine Shipment Trends:
•
•
•
•
•
California Shipments up 4%
“Big 3” Shipments are flat
Coastal Warehouse Shipments up 14%
California bottled exports up 4%
California bulk exports down 2%
Imports/Exports
Import and Export Wine Volumes, 2000-2013
In Millions of Cases
Bottled Imports
Bulk Imports
Tracking 2014
2013
Bulk Exports
2012
2011
2010
2009
2008
Bottled Exports
2007
2000
2001
2002
2003
2004
2005
2006
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Imports/Exports
Imported Wine - Bottled and Bulk
(In Millions of Cases)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Total
-1%
-5%
Total
+12%
-2%
Total
+0%
+7%
Total
+7%
Total
+16%
Total
-7%
Total
-1%
+3%
-2%
+3%
-1%
+71%
-25%
+92%
-20%
-1%
+26%
+27%
2008
2009
Data obtained via the Gomberg Fredrikson Report
2010
2011
Bottled Imports
2012
2013
Bulk Imports
Tracking
2014
Production/Supply
Statewide Grape Crush 2005-2014 Estimate
Tons
(in Millions)
5.00
4.70
4.33
4.39
4.09
4.50
3.67
3.00
3.67
4.02
3.76
3.70
3.14
3.25
3.58
4.15
3.67
3.49
4.00
3.50
3.98
4.25
3.90
3.34
3.06
2.50
2.00
1.50
1.00
0.50
0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Other Crush
Winegrape Crush
Production/Supply
Comparison of Allied Grape Growers' Central Valley Yields (Districts 12-14)
2013-2014 Five-Year
Variety/Category
2010 2011 2012 2013 2014 % Change
Avg Yield
Thompson Seedless
8.9 10.9 8.0 10.2 7.3
-28%
9.1
Generic Whites (French & Chenin) 12.2 10.2 11.5 10.7 10.2
-5%
11.0
Chardonnay
8.9
7.1
7.8
8.3
8.1
-2%
8.0
Florals (Muscat, Symphony, etc)
14.7 12.7 13.2 13.2 12.7
-4%
13.3
Pinot Grigio
N/A
9.0
8.5
8.3
9.1
10%
8.7
Grenache
10.6 10.9 9.8 10.4 10.0
-4%
10.3
Rubired
13.6 14.4 10.9 13.1 11.4
-13%
12.7
Barbera/Carignane
10.3 8.4
9.8
8.6
7.5
-13%
8.9
Cabernet Sauvignon
9.4
8.2
8.7
8.4
6.5
-23%
8.2
Merlot
9.3
9.2
8.6
9.1
7.6
-16%
8.8
Ruby Cabernet
11.5 11.9 9.8 10.8 10.0
-7%
10.8
White Zinfandel
11.8 11.2 12.6 12.6 10.8
-14%
11.8
Syrah
10.5 9.3 10.0 10.0 8.8
-12%
9.7
2014 to Avg
% Difference
-19%
-7%
1%
-5%
4%
-3%
-10%
-16%
-21%
-13%
-7%
-8%
-9%
Market Demand
Central Valley Prices (Districts 12-14)
Existing Contract 2013 Spot
2014 Spot
2013-2014
Variety/Category
Minimum Range Market Price Market Price* Spot % Change
Thompson Seedless
N/A $
235 $
200
-15%
Generic Whites (French & Chenin)
$250-325 $
250 $
225
-10%
Chardonnay
$350-450 $
400 $
250
-38%
Florals (Muscat, Symphony, etc)
$250-400 $
325 $
250
-23%
Pinot Grigio
$400-500 $
500 $
500
0%
Grenache
$250-400 $
300 $
225
-25%
Rubired
$250-325 $
325 $
300
-8%
Barbera/Carignane
$250-400 $
350 $
250
-29%
Cabernet Sauvignon
$350-500 $
475 $
300
-37%
Merlot
$350-450 $
375 $
250
-33%
Ruby Cabernet
$300-400 $
375 $
250
-33%
White Zinfandel
$250-400 $
400 $
225
-44%
Syrah
$300-550 $
375 $
250
-33%
*Note: The 2014 spot price was for tonnage sold on the spot market to returning buyers or to
"new" buyers seeking fruit for bona fide wine programs. In reality, there were many tons of
grapes sold below these spot prices for use in concentrate and brandy programs.
Market Demand
Concentrate Market
Estimated Breakdown - Grapes Used for Concentrate, 2008-2014
TONS
800,000
747,925
700,000
610,000
598,365
600,000
499,323
535,794
529,000
500,000
450,000
400,000
300,000
200,000
100,000
2008
Raisin Varieties
2009
2010
Winegrapes
2011
Table Varieties
2012
2013
2014
Dark Reds (Rubired, etc.)
Concentrate Market
Thompson Seedless crush
1997 - 2014 Estimate
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
Concentrate Market
•Scenarios that help create a strong Thompson market:
•Short supply of white winegrapes
•Robust brandy market
•Robust low-end wine or high-proof alcohol market
•Short Thompson crop
•Healthy raisin industry
•Short white concentrate market
•High white grape juice concentrate price
Concentrate Market
•White concentrate:
•Market is weak with low volume
•CA grape +/-$8/gallon – but little movement
•Foreign product is available and cheaper ($6-7/gallon)
•Apple markets are surplus, which softens grape
•Some negative health press (i.e. sugars in kids’ drinks)
•Red concentrate:
•Stable demand/balanced market
•Pricing at about $12+/gallon
•Other countries not expanding supply – yields are lighter
•California-dominated market
Vineyard Sales & Pullout Trends
• Vineyards are being sold at record levels. Why?
• Lack of desire to fight the wine market & harvest issues.
• Retirement is looking pretty good.
• Available market demand for all nut crops at better $/acre
• High values
• Plenty of cash buyers
• Land with water is being sought out
•
•
•
•
•
Many vineyards may be farmed for 1-2 years while others are
being removed immediately by growers.
Limiting factors are available bulldozers and trees.
We are now starting to loose our better vineyards & growers.
The landscape of SJV agriculture is changing
Allied Grape Growers is here to stay!
Take Home Message
•
The San Joaquin Valley Grape Industry
•
•
•
•
Will continue to be an important part of the wine and
concentrate industry.
Will continue to provide the consumers daily wine with quality
and a reasonable price.
Will need to continue to provide better production and quality
to wineries to meet consumer demands.
Needs pricing to step up for growers so they can be
economically sustainable. If not, the result will be the
continued removal of SJV wine & concentrate grapes.
For more information
www.alliedgrapegrowers.org
Questions?