Santa Rosa, Calif.—
Sonoma County Winegrowers president Karissa Kruse announces the group's plan to become the first 100% sustainable U.S. wine region within five years. Source: George Rose/Sonoma Winegrowers
Sonoma County growers received an update on grape and wine prices as well as details about the push toward countywide vineyard sustainability certification at today’s Dollars and $ense program.
Hosted by the Sonoma County Winegrowers
, the session featured a presentation from Turrentine Brokerage
vice president Brian Clements and broker Matt Cuneo. The two titled their presentation “2013: A Wine Odd-yssey,” riffing on the classic science fiction movie “2001: A Space Odyssey.”
The “oddness” they referred to started with the recession, which was followed by an almost critical shortage of California bulk wine. Two large harvests across most of the state in 2012 and 2013—as well as significant new acreage in the Central Valley—appear to have rectified the shortage.
Clements said grape buyers in the Central Valley told him the 2013 harvest was not so much a big crop, but rather the 100,00 acres of vines planted during the past five years are now starting to reach maturity. “At 10 tons an acre, that’s a lot of grapes,” he said.
The new ‘floor’ for California grape production
Clements said he now considers 4 million tons the new “floor” for California’s harvest; 2013 is expected to yield 4 million tons if not more. “These numbers are going to keep getting bigger every year, unless Mother Nature has a say in it,” he told the audience.
In terms of bulk wine, the current level of the California bulk market stands at around 15 million gallons. Prices for the key varieties of Cabernet Sauvignon, Pinot Noir, Chardonnay, Zinfandel and Merlot have stayed largely stable, with just a slight drop off from the large crops of 2012 and 2013.
Cabernet Sauvignon prices remain the strongest, shrugging off the low point following the recession. “Cab is like a rocket ship,” Clements said. “It really is bulletproof.”
Sonoma County produced around 45,000 tons of Cabernet Sauvignon in 2012, and that total is expected to be matched in 2013. Despite the two large harvests, the market has an insatiable appetite for Cabernet grapes and bulk wine.
According to Turrentine’s average spot prices (which extend beyond Sonoma County), Cabernet fell to $1,232 per ton in 2010, but it rose to $2,376 by 2012 and hit $2,424 in 2013. Bulk wine prices rose from $10.57 per gallon in 2010 to $20.35 in 2012 and $19.60 in 2013.
The popularity of Cab has supported Merlot, of which Clements said 95% of Sonoma County’s crop goes into Cabernet programs as blending wine. In 2012 grape prices hit $1,728 before slipping to $1,636 in 2013. “It does better than most people think,” Clements said.
There is now about four times as much Pinot Noir acreage in Sonoma County as in the late 1990s, and the prices reflect the popularity of the grape. Prices for grapes rose from $1,861 in 2010 to $2,466 in 2013. Bulk wine prices hit $27.72 per gallon in 2012, but due to the large harvests prices are now at $18.73 per gallon. Clements said Sonoma County produced more than 50,000 tons in 2012, and the 2013 yield is expected to be about the same.
Zinfandel, of which Sonoma County produced around 22,000 tons in 2012, has seen mainly stable or “lukewarm” prices in recent years. In 2012 a ton went for $1,721, and in 2013 the price was $1,992. Bulk wine prices in 2013 fell to $14.52 per gallon from $16.01 in 2012, and Cuneo said he expects prices to “continue to moderate.”
Turrentine predicts the 2013 Chardonnay harvest to come in slightly below 80,000 tons. The price for Chardonnay grapes hit $1,879 in 2012 and then dropped to $1,678 in 2013.
Clements, however, said higher prices could have been maintained if there was enough tank space to handle the fruit. “It dropped because there wasn’t capacity,” he said. “If there was enough space going around, that price would have held.” The price for bulk Chardonnay in 2013 was $11.73, which is down from $15.56 in 2012.
Five-year sustainability goal
Prior to the Turrentine presentation, the president of the winegrowers’ group, Karissa Kruse, announced an ambitious plan to get all of the county’s vineyards certified sustainable within the next five years. “We realized it was really time for Sonoma County to put a stake in the ground as a leader in sustainability,” she said.
Such a move would put Sonoma County growers in the enviable position of growing grapes to make wine branded as sustainable, which is in more demand from major retailers and consumers.
And while Kruse acknowledged third-party certification can be complicated and expensive, she contended that the benefits of improved operations and better grapes would pay off in the end. “It actually saves you money and improves quality,” she said.
Kruse said about 60% (or 37,000) of the county’s vineyard acres are in assessment for sustainability programs. Instead of creating a new certification program just for Sonoma County, Kruse said the winegrowers group will use the standards of the California Sustainable Winegrowing Alliance, although she added any third-party certification program would suffice.
Steve Smit, vice president of vineyards and grape management for Constellation Brands
, said growers would be well advised to pursue certification because it’s what consumers and major retailers are beginning to demand. “It behooves us to be the leaders,” he said. “This is so important that we take a hold and lead the charge in this situation.”
Smit was one of four experts on a panel discussion about the benefits of sustainability. Joining Smit was master sommelier Emily Wines of Kimpton Hotels and Restaurants. She said Kimpton requires 30% of restaurant and hotel wine lists to contain sustainable, organic or Biodynamic products and that more than 30% of the company’s sales are from such wines. She relayed that consumers are interested in sustainability but find it rather “murky,” so they trust brands and retailers like Whole Foods to help them find sustainable products.
Katie Jackson, the manager of sustainability and community outreach for her family’s Jackson Family Wines
, said consumers and retailers are not just interested in the company’s sustainable practices, they demand to know and expect proof. “For us being able to communicate what we do is increasingly important,” she said. This interest extends to Jackson Family Wines suppliers as well.
Kruse said the winegrowers group will be working on certification training during the spring. Assessment with certification will follow after harvest 2014. Future grower-education sessions will be presented through the “filter of sustainability,” she said.