Your insider pass to the Paso Robles Wine Country Alliance (PRWCA) spring seminar on Grape Sales and Negotiating is here.
Market Conditions
There's uncertainty around supply and demand. A competitive landscape includes the Central Coast, North Coast, Lodi, Napa, and Sonoma. Water issues and fire risk are both concerns. Bulk wine supply is climbing, even after the light 2022 crop, while consumption is slowing due in large part to the demand for seltzer.
Pricing
District 8 averages $1,824/ton and ranges $1,200-$4,000/ton across sub-AVAs. The 10 day heatwave in September of 2022 impacted supply because far fewer tons were crushed. Pricing varies dramatically between sub-AVAs and the historical production of a vineyard (or those nearby). Ultimately, pricing depends on the age and health of the vineyard. Wineries increasingly prefer sustainable certifications that ensure alignment with the desire to use fruit from well maintained vineyards that prioritize soil health and vine balance in their practices.
Buyers & Sellers
When it comes to linking buyers and sellers, trust and relationships are everything. Beyond reputation, it truly comes down to who you know.
What grape buyers want from growers:
- Clear maps that include data from the year planted to grafting, clone, rootstock, and spacing. Soil maps are also helpful to identify differentiation around picking or farming.
- Accurate estimates around crop load.
- Organized records on irrigation, fertilizer applications, and chemistry applications.
- Savvy marketing. Actively promote your vineyard with an engaging website or digital collateral. Professional management and vineyard appellation are important factors to highlight.
Practical advice for growers/sellers:
- Identify wineries you want to work with and approach them thoughtfully.
- Don't lead with price. Instead, ask what program or purpose your fruit would contribute to.
- Consistency and transparency are key, so be prepared with accurate estimates and information.
- Be familiar with a winery's reputation before entering into a contract. Consider expectations around, payment reliability and timeliness.
- To determine the retail value of a ton, multiply the price per bottle by 100. For example, $15 bottle of wine = $1,500/ton, and $40 bottle of wine = $4,000/ton. Keep in mind this is an old school formula and not always the case.
Practical advice for winemakers/buyers:
- Think big—Paso is becoming an international market!
- Sustainable practices cast the widest net for success over the limitations of organics. From a grower's perspective, organics generally add 10% more cost with 10% less yield.
- Don't get a certification for the “stamp”. Instead, wholeheartedly do what you can to be as responsible as possible. There are a number of ways to incorporate sustainable techniques into your vineyard management program to improve soil health, crop balance, and more.
- Consider regenerative and biodynamic techniques best suited to the health of your vineyard without limiting yourself to only one restrictive category.
- Awards and accolades are overrated and often based more on relationships than any particular standard of excellence. Don't get caught up in their importance. Instead, focus on marketing fruit to your specific audience.
Variety Focus
Cabernet Sauvignon
Still reigns supreme as the most planted grape variety in the Paso Robles area.
Merlot
Typically used a small percentage blender with Cab and other reds. District average price climbing at $1,650.
Petite Sirah
Tons crushed trending up. Performs in heat. Grows well on Paso's eastside. Very little planted or available or planted on the westside. High $3,000/ton and low $1,000/ton.
Zinfandel
Demand is decreasing. Becoming more of a niche market. Typically $2,000/ton.
Grenache
Increasing production, getting close to saturation. Often used for Rosé. $2,200/ton.
Sauvignon Blanc
Grows well in the heat. $1,600/ton average. Late-season demand commands a well above-average price per ton.
Syrah
More niche than the macro market. Often struggles to ripen. In cooler climates, Pinot Noir is replacing Syrah in terms of demand. $2,000 per ton average.
Paso Robles Vineyard & Winery Real Estate
California's #1 vineyard broker, Jenny Heinzen is the proven agent for wine industry clients, investment funds, and high-net-worth individuals. Equipped with over two decades of insider expertise and $250+ million in closed real estate transactions, count on Jenny to achieve your most ambitious goals.
Contact Jenny at (805) 260-0581 or [email protected].
