Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
 

Editor's Letter

 

What Winery Buyers Are Thinking

June 2010
 
by Jim Gordon
 
 
Hope isn’t much of a strategy,” said Randy Luginbill, vice president of winery relations for Silverado Premium Properties as he introduced four speakers during May’s Vineyard Economics Seminar. His point was that the recession has hit many winegrape growers hard. Fewer have long-term contracts, many are expecting lower per-ton payments this season, and quite possibly more growers than last year will have no home at all for their grapes—unless they custom crush.

Growers need to approach the changing grape marketplace with new ideas of their own, Luginbill said, rather than hoping for great deals from wineries. Who better to suggest new ideas than winery buyers themselves? That was the goal for the panel entitled, “Wine Buyers Tell What They Are Thinking.” Here’s a summary of a few of the speakers’ points.

Robert LaVine
Director of sourcing, Brown-Forman Wines

Besides having a great name for his job, LaVine has extensive experience in vineyards throughout the state. His main point was that growers can strengthen their positions by going organic and getting certifications. Since he sources grapes for Bonterra (all organically grown) as well as other brands, this is no surprise.

“Organic certification is a business opportunity for growers,” LaVine said. With organic certification, a grower gains a whole new market—wineries that put “organically grown” on the label—and doesn’t have to give up the old market. More growers are realizing that the transition to organic is less difficult and expensive than they imagined, he said. Further, property losses from holding back on an insecticide, for example, have rarely happened, so the rationale for not going organic is weaker than before.

Rachel Ashley
Director, technical viticulture and grower relations, Foster’s Wine Estates Americas

Ashley dug deeper into the bottle price issue, setting up her comments with graphs that showed how wide a county’s bottle price range can be—$15 to $300 for Napa Valley Cabernet Sauvignon—vs. how relatively narrow its price per ton range is when many contracts rely on weighted district average prices, even with adjustments.

Ashley advised growers to capitalize on the link between quality and price. With objective measures available today for anthocyanins, phenolics, vineyard variation and vine performance, growers can ask higher prices for their better blocks, but may have to settle for less from lesser blocks.

Joseph Wagner
Managing member, Caymus Vineyards

One of Wagner’s key points, that he welcomes growers who use mechanical means to keep costs down, is covered elsewhere in this issue. But the third-generation owner of Caymus also explained a new grape pricing method as an alternative to the formula of 100 times the bottle price = the per ton price, popularized by Andy Beckstoffer.

The Caymus formula uses a wine’s FOB price rather than retail, and calculates prices per ton with a multiplier, which his winery determined to be 180. Using suggested retail prices overlooks one of a winery’s biggest expenses: the cost of selling wine. He said that growers are usually not privy to a winery’s costs for free goods, special purchase allowances, incentives, depletion allowances, by-the-glass pricing, quantity discounts and so on.

Corey Beck
Director of winemaking and general manager, Francis Ford Coppola Winery

Beck elaborated on one of Rachel Ashley’s points: that better tools are now available to measure grape quality, and that growers should use these tools to determine not only where their grapes stand vs. potential competitors, but what flavor attributes they are contributing vs. what the winemaker’s goal for the wine is.

His winery measures the phenolics of each grower’s fruit using the Harbertson-Adams tannin assay, and charts the changes during fermentation. Each grower can view a graph and see if his produce hits near the target attributes. “It’s no more just about TA, pH and Brix, it’s about extract,” he said.

Readers who are growers will have to consider how much of the advice is relevant and useful to them. But I do think that the ongoing recession, the effects of which may still be getting worse for growers, is also a good call to action. Times have changed. Those who think and act proactively now to improve their grapegrowing and grape marketing will be in better shape for near-term survival and long-term prosperity.

 
SHARE »
Close
 
Currently no comments posted for this article.
 
 
SEE OTHER EDITIONS OF THIS COLUMN ï¿½ CURRENT COLUMN ARTICLES »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
July 2014 $557 million
5%
$7,577 million
6%
July 2013 $533 million $7,128 million
     
Direct-to-Consumer Shipments » Month   12 Months  
July 2014 $61 million
9%
$1,674 million
10%
July 2013 $56 million $1,517 million
     
Winery Job Index » Month   12 Months  
July 2014 312
10%
222
19%
July 2013 283 187
     
 
MORE » Released on 08.15.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

Direct To Consumer
Wine Shipping Report
2014
 
Download full report »
 
 

CALENDAR
  • August 30 - September 1
     
    Columbia Gorge Open House Weekend
     
  • September 5-6
     
    Windy City Wine Festival
     
  • September 11
     
    Women for WineSense "Women in Wine"
     
  • September 12
     
    Direct to Consumer Wine Sales
     
  • MORE »
 

READER COMMENTS
 
Article: Ledger David names first winemaker »
 
What a joy to have Kiley on the team! A lot of exciting things happening...
Reader: Guest
 
Article: Useful Spanish for Wine Harvest »
 
you misspelled "zona" under Loading Area
Reader: Guest
 
Article: Early 2014 Grape Harvest Begins »
 
Thanks for mentioning Temecula and the South Coast appellation in your article. It is great...
Reader: Guest
 
Article: Wineries May Lose Internet Domain Dispute »
 
All these arguments could be levied by any industry associated with any gTLD, new or...
Reader: Doug Barnett
 
Article: Wineries May Lose Internet Domain Dispute »
 
Do brands get hijacked now? Even though .wine does not yet exist, are there false...
Reader: Larry Chandler
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2014 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Sales Representative
 Daly City, CA
Sales and Marketing
 Fine Wine/Spirits Sale...
 Albany, NY
Sales and Marketing
 Wine Store - Sales Ass...
 New York, NY
Sales and Marketing
 Retail Store Manager
 Centerville, MA
DTC, Tasting Room and Retai
 Importing / Purchasing...
 Napa, CA
General Administration and
 Customer Service / Adm...
 Napa, CA
General Administration and
 Visitor Center Represe...
 Napa, CA
DTC, Tasting Room and Retai
 Administrative Assista...
 Santa Rosa, CA
General Administration and
 Assistant General Mana...
 City Of Sonoma, CA
General Administration and
 Tasting Room Associate
 Livermore, CA
DTC, Tasting Room and Retai
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2014 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.