April is here and it's an ideal time to sell your vineyard!
The California Department of Food and Agriculture’s preliminary Grape Crush Report is out now and reporting over 3.4 million tons. A summary for the supply of the wine and grape industry outlining tons crushed and prices of wine grapes sold during the 2020 harvest, the Crush Report report offers key grower data and winery insights across California and the wine industry at-large. It also influences and impacts market dynamics for the current bulk wine market as well as the upcoming 2021 harvest.
General trends show the market cycle is shifting more favorably to grape sellers. Increasingly, more contracts are being offered and grapes that haven't sold in years are committed for 2021. In part because of the wildfires, 2020 marked the Golden state's smallest grape crop in a decade at 3.5 million tons. Comparatively, that's down 14% from 2019.
According to the President of Turrentine Brokerage, Steve Fredricks, grape prices dropped due to four consecutive years of big crops prior to 2020 that resulted in a surplus of bulk wine. He also noted grapes were left on the vine in 2019 because there wasn't anywhere to sell them. The size of the 2020 crop actually brings balance to supply and demand. In Napa, many of the highest-priced grapes weren't delivered because of the wildfire smoke and what was bought at the close of the season was purchased at a discount. Fredericks acknowledges, "As we've gotten past harvest, people are tasting wines in bulk. A lot of people are reporting that the wine quality is better. The negative effects that we thought we'd see from smoke aren't there. There are some wines that are challenged that are never going to see the consumer. The wines (in stores) are going to be fine. People are pleasantly surprised. Things are better than they were thinking they were going to be."
Central Coast Grape Broker Audra Cooper believes "2020 is a vintage we will not soon forget. The wine industry experienced a historic oversupply of bulk wine and grapes going into the year which was quickly followed by a global pandemic causing shutdowns that changed our lives in ways we could have never imagined. We witnessed new consumer trends like 'pantry loading' and booming online sales and on-premise sales declined to the point of near non existence. If that wasn’t enough, unprecedented and widespread late-summer fires burned over 4 million acres in California. Saturated orange skies went viral and we had numerous triple digit days despite the lack of direct sunlight. Mass smoke taint testing overwhelmed labs and contracted grapes were rejected for smoke taint. 2020 will be remembered as one of the most difficult years on record. The silver lining of our trials and tribulations is that it will also be remembered as the year the market began to transition away from excess towards balance and, in some cases, shortage.”
The good news for you? By the start of next year, "...the volume of wine sold is expected to rise to 281 million cases worth $32.9 billion, for a five-year CAGR of approximately 3%."
Fact is—our region produces on-demand grapes for top quality wine. And now is an exceptional time to profit from selling your Central Coast vineyard.
