Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#51 Post by John Peacock » September 11th, 2019, 9:59 am

GregP wrote:
September 9th, 2019, 11:43 pm
I know of no one who presses off until completely dry. If you know who does, then list them here. Or stop posting nonsense. Only because you think/believe something does not make it true. But, yes, list names, should be an interesting and very extensive list judging by your beliefs. Don't be shy.
Just a touch of clarification, which isn't to counter your point of there being dry CA (or US for that matter) wine. I have seen and heard of wineries that will press off at around 0 brix and finish fermentation (getting to -2 brix or so) in barrel or tank. It is hard to get every last bit of sugar out of the grapes in a fermenter of whole cluster without pressing, so if you think you're fully dry in that scenario and then press, you'll have a little RS in your barrels (which will then likely ferment if the barrel room is warm enough).
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#52 Post by Doug Schulman » September 11th, 2019, 10:02 am

Thanks for the detail, John.

I do wonder, though, why anyone ever tries to reason with Nathan or get him to make sense. There is no point. Everyone can see his posts for what they are.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#53 Post by Roy Piper » September 11th, 2019, 11:14 am

I have been quietly offered fruit I’ve not seen available in a long time. Two years ago there was nothing available. Now even some great vineyards are. And at prices below what I would have guessed. But I am standing pat at my current size for at least another year or so. I don’t know many taking advantage of the availability. Any grower that raises prices right now will lose clients. Have not seen this dynamic since about 2010.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#54 Post by Gordon Fitz » September 11th, 2019, 11:40 am

The answer to the OP question is simple. My farm does corn and soybeans. Swine flu knocked out a lot of hogs in China and there went demand! Prices are cratering because the American farmer doesn’t want to cut production to meet demand. The general expectation is for farm values to fall along with multiple bankruptcies forcing a drop in production.

Look at all the dairy farmers from 10-20 Tagore no longer in the business. Overproduction lead to dirt cheap prices for milk which eventually thinned the herds. Ten to Fifteen years ago most everyone was asking where were all those grapes being brought online in newly planted vineyards in the Willamette going to go.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#55 Post by GregT » September 11th, 2019, 1:17 pm

Except that corn, soybeans, and pigs are considered commodities, whereas not all grapes are. But apparently even special grapes are commodity-like these days based on what Roy and Alan have said.
Adam Lee wrote:
September 11th, 2019, 3:46 am
GregT wrote:
September 5th, 2019, 12:56 pm


The article is misleading even if it does mention the central issue. Grapes that were grown under contract usually are not left hanging on vines because the buyer changes his mind. If there are too many grapes now, those are almost certainly grapes that were grown in hopes of finding a buyer
One specific example that somewhat contradicts this. In one particular, smaller, high-end AVA in California, the largest vineyard in the area was under contract to Constellation. Constellation dumped the contract - simply said they weren't going to pay for the grapes. The owners of the vineyard ended up leasing the vineyard to someone for the cost of farming from July 1 through harvest (guessing around $1000 per acre). At 4ish tons per acre (fairly closely spaced) the fruit that is sold is down to $250 a ton cost. The new person leasing the vineyard is going to sell what he can at between $500-$1000 a ton and then drop any fruit he can't sell on the ground. That means that approximately 19 percent of the fruit in this AVA is now doing to be sold at $500-$1000 a ton (where the going average price has been around $3000 a ton previously).

Adam Lee
Adam - they did have some kind of written contract though, didn't they? Seems like Constellation would owe them something, no? That seems pretty outrageous.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#56 Post by Casey Hartlip » September 25th, 2019, 5:15 pm

Wow, I had to go back a few pages to find this.

I talked to an industry heavyweight yesterday. He said there is 5,000 tons of Mendocino Chardonnay unsold, there is 5,000 tons of Napa cabernet unsold AND 10,000 tons of Paso cabernet unsold. If we ever needed a smaller-than-normal crop this would have been the year.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#57 Post by GregP » September 25th, 2019, 6:35 pm

Casey Hartlip wrote:
September 25th, 2019, 5:15 pm
Wow, I had to go back a few pages to find this.

I talked to an industry heavyweight yesterday. He said there is 5,000 tons of Mendocino Chardonnay unsold, there is 5,000 tons of Napa cabernet unsold AND 10,000 tons of Paso cabernet unsold. If we ever needed a smaller-than-normal crop this would have been the year.
Saw an article in Sonoma Valley paper last week claiming roughly 2,000 tons of unsold fruit there, no breakdown of varietals. Though what was left unsaid is the quality level of fruit in question, something tells me all the high end grapes were under contract and sold. To be honest, I see people asking prices that have no real reflection of the (lack of) quality/AVA, maybe its time some have an attitude adjustment (had an interesting discussion this past weekend with vineyard owner in Santa Cruz, simply mind blowing in retrospect, I walked away). Some base their prices on "Well, my neighbor is getting $$$$, therefore I am also entitled", never mind better mix of clones planted across the fence and way better vineyard management, to boot. Been long overdue.

Another issue that will eventually come to a head, is larger wineries "locking" entire vineyards under contract, long term, without actually having ability/capacity/distribution/sales to use all of the fruit, but simply making it unavailable to others, mostly small guys. Basically, artificial price control. If/when prices come down, consumers will win with lower bottle price. Win/win in my book.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#58 Post by Adam Frisch » September 25th, 2019, 6:39 pm

Just got back from a pick in Lodi. Farmer had 10 acres of Zin he can't sell for $700/ton, good fruit. Across the street Gallo machine picks a big Zin field and pays $180/ton. [cry.gif]
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#59 Post by Evan Pontoriero » September 26th, 2019, 5:15 pm

Warning - this could get rambly.

I think that a lot of fruit out there is due to the big merger delay and cancelled contracts because of it, that is a lot of brands and wine being held up. We look at the listings weekly to see if there is anything that fits what we are looking for. Those vineyards don't seem to be on the market at seriously reduced prices, even behind the scenes. So far only one top quality block that had a cancelled contract looking for a buyer that I've talked to. Several high altitude Chardonnay blocks but the prices are still as high as the mountain. So far nothing that has caught my eye other than a tiny plot on the very edge as an experiment. I think in other years the supply would be sucked up but wineries are taking cautious approach and trying to not get drawn into the lure of good cheap fruit. Old adage - easy to make, hard to sell. Best plan is to get into excellent vineyards and stay there or grow great fruit. I can imagine soon having years like 15 and 16 again and then we will be back to the situation where if you don't have dirt you get whipsawed by the pricing.

I am seeing lots of small growers in less than desirable locations really struggling to sell. There will be a lot of hurt there, but wine will still be made and there will still be people willing to pay a premium, particularly in the bay area. I heard one client say that they were in Napa and found a new iPhone11 outside a tasting room. They contacted the owner but found out the that owner didn't care and had already bought and activated new one. I can't see any reason to get worked up over pricing as there is wine at all price points for all types of drinkers. Is it too expensive or not as good as another wine less expensive? I don't think it is as simple as that since there is all kinds of psychology that goes into judging wine. And saying "I can get this great fruit from X location that is amazing at half the price because it is from a lesser area but will make better wine" seems to discount all the investment in marketing effort and history of great wine from that place that the better locations have done to drive the price of said fruit, not to mention the psychology attached to named SVDs. Often times the 1% rule is what it is though there is plenty of greed out there (maybe that is what Adam is really reacting to). Grapocalypse? Perhaps for some and I don't doubt that there is a lot of people hoping for a comeuppance for those that are greedy but I think that is bad for the industry and you will end up being disappointed as there is plenty of cash sloshing around to keep those people in business. I don't see Gaps Crown PN becoming any more available nor getting less expensive. Don't have the dough to make Gaps? Fine, but I don't see a point in railing against winemakers that need to charge a high price based on fruit costs and seem to be selling all their wine. According to the article today, whatever isn't sold will be sold by Cameron Hughs at Costco anyway, and he will still be pissed that he doesn't get the same score using the same wine. Hmmm, Hermes iWatch vs. iWatch?

AFA Rob -
He gave his millennial and oversupply presentation to the Petaluma Gap earlier this year and it seemed all doom and gloom. He did have some optimistic suggestions and thoughts, though (Craft beer declining for one). But, mainly what I took away from the presentation was that the wine industry is not taking the neo-prohibitionist movement that is scaring the younger drinkers dry seriously enough (he particularly railed on the poorly researched Lancet article). There needs to be a greater, more concerted effort in marketing and advertising to rebuke the false claims circulation recently.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#60 Post by Evan Pontoriero » September 26th, 2019, 5:26 pm

GregP wrote:
September 25th, 2019, 6:35 pm
Casey Hartlip wrote:
September 25th, 2019, 5:15 pm
Wow, I had to go back a few pages to find this.

I talked to an industry heavyweight yesterday. He said there is 5,000 tons of Mendocino Chardonnay unsold, there is 5,000 tons of Napa cabernet unsold AND 10,000 tons of Paso cabernet unsold. If we ever needed a smaller-than-normal crop this would have been the year.
Saw an article in Sonoma Valley paper last week claiming roughly 2,000 tons of unsold fruit there, no breakdown of varietals. Though what was left unsaid is the quality level of fruit in question, something tells me all the high end grapes were under contract and sold. To be honest, I see people asking prices that have no real reflection of the (lack of) quality/AVA, maybe its time some have an attitude adjustment (had an interesting discussion this past weekend with vineyard owner in Santa Cruz, simply mind blowing in retrospect, I walked away). Some base their prices on "Well, my neighbor is getting $$$$, therefore I am also entitled", never mind better mix of clones planted across the fence and way better vineyard management, to boot. Been long overdue.

Another issue that will eventually come to a head, is larger wineries "locking" entire vineyards under contract, long term, without actually having ability/capacity/distribution/sales to use all of the fruit, but simply making it unavailable to others, mostly small guys. Basically, artificial price control. If/when prices come down, consumers will win with lower bottle price. Win/win in my book.

Greg,

I see your point. I see the new Napa model for growth of raiding Sonoma for PN that they can sell for a lot more in Napa or in their newly minted Sonoma vineyards/wineries/tasting rooms. This is driving up costs significantly for the Sonoma side, but that is business. I can get wound up about it or I can see it as a possibility for better times going forward for tourism. I doubt that those coming over are underfunded or have not thought out the sales/dist side of things, though. One of the interesting things I have heard of and experienced personally is Constellation buying up or locking up properties for Meomi. There seems to be no slow-down there.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#61 Post by Casey Hartlip » September 26th, 2019, 5:33 pm

Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#62 Post by Adam Frisch » September 26th, 2019, 6:17 pm

Price of fruit vs. area is drifting into the old terroir talk again. It is a factor for some, maybe even the majority of the more established markets still, but probably diminishing in importance for emerging consumers. For the millennials, less value is put on where the fruit comes from, as long as it fills a lot of other criteria or perceived benefits. They don't buy Methode Sauvage or Bichi's Mexican wines because of what vineyard the fruit was grown at, they buy it because they agree with their principles or ethics and enjoy that style. I think it will become less and less important where things are grown, but more and more important how they're grown, from a consumer standpoint. And a move away from anything that smells corporate.

What does that speak of the future of the high status areas/fruit/terroir of today? I think it's a little dangerous to say that they're somehow immune from all of this emergence and that there's enough money to sustain that indefinitely. Millenials will grow older and won't have the same relationship to Napa as maybe our generation or the one before had. But maybe new prestigious areas will crop up and the whole cycle starts over again? I don't know.

Relating to that: this was a conversation I had with one of the growers just a few days ago in Contra Costa where I took some fruit. He's 60 years old.

Grower: "So, I hosted my granddaughters wedding here at winery."
Me: "Oh, cool. What wine did you serve?"
Grower: "Well, it was funny. I put out shitloads of rosé, some white and some of my reds. But this time I really sat back and observed carefully. And you know what?"
Me: "What?"
Grower: "Only the old guys, my generation, was drinking Cabernet Sauvignon. None of the young ones drank it."
Me: "Wow. Really?"
Grower: "Yep, too heavy. And you know what else? At the end of the night I counted the cases - they'd drank 4x more of the rosé than any other wine."
Last edited by Adam Frisch on September 27th, 2019, 6:37 am, edited 6 times in total.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#63 Post by GregT » September 26th, 2019, 7:18 pm

Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Seriously Casey? You'd rather get nothing than something? The fact that you sold cheap doesn't mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.

I don't know. Doesn't seem to make business sense.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#64 Post by Josh Grossman » September 26th, 2019, 7:58 pm

Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
I feel like there needs to be more co-ops that excess fruit can be sent to--like France.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#65 Post by Brian Gilp » September 27th, 2019, 7:10 am

GregT wrote:
September 26th, 2019, 7:18 pm
Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Seriously Casey? You'd rather get nothing than something? The fact that you sold cheap doesn't mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.

I don't know. Doesn't seem to make business sense.
My wife has has a jewelry business where she purchases stones, metal, pearls, etc from numerous suppliers. She has walked away from more than one of them after finding out that they sold the same product to someone else at a lower price. I totally understand the decision to not upset existing customers.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#66 Post by Gray G » September 27th, 2019, 8:15 am

Roy Piper wrote:
September 11th, 2019, 11:14 am
I have been quietly offered fruit I’ve not seen available in a long time. Two years ago there was nothing available. Now even some great vineyards are. And at prices below what I would have guessed. But I am standing pat at my current size for at least another year or so. I don’t know many taking advantage of the availability. Any grower that raises prices right now will lose clients. Have not seen this dynamic since about 2010.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#67 Post by Gray G » September 27th, 2019, 8:16 am

Josh Grossman wrote:
September 26th, 2019, 7:58 pm
Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
I feel like there needs to be more co-ops that excess fruit can be sent to--like France.
yes

the US is so angrily capitalist
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#68 Post by Wade H » September 27th, 2019, 1:37 pm

Relating to that: this was a conversation I had with one of the growers just a few days ago in Contra Costa where I took some fruit. He's 60 years old.

Grower: "So, I hosted my granddaughters wedding here at winery."
Me: "Oh, cool. What wine did you serve?"
Grower: "Well, it was funny. I put out shitloads of rosé, some white and some of my reds. But this time I really sat back and observed carefully. And you know what?"
Me: "What?"
Grower: "Only the old guys, my generation, was drinking Cabernet Sauvignon. None of the young ones drank it."
Me: "Wow. Really?"
Grower: "Yep, too heavy. And you know what else? At the end of the night I counted the cases - they'd drank 4x more of the rosé than any other wine."
I might caution trying to read too much into that. I would infer that the wedding was held during the summer. If it was at a winery, it was an outside event and likely at least part of the reception was during daylight hours.

I love me some good Cabernet Sauvignon but at a daytime summer wedding as long as it's palatable I'm going for the rosé or maybe some of the white. At most a glass of the Cab during the dinner if the food match is suitable.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#69 Post by Adam Frisch » September 27th, 2019, 4:16 pm

Wade H wrote:
September 27th, 2019, 1:37 pm


I might caution trying to read too much into that. I would infer that the wedding was held during the summer. If it was at a winery, it was an outside event and likely at least part of the reception was during daylight hours.

I love me some good Cabernet Sauvignon but at a daytime summer wedding as long as it's palatable I'm going for the rosé or maybe some of the white. At most a glass of the Cab during the dinner if the food match is suitable.
True, and a very valid point.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#70 Post by Alan Rath » September 27th, 2019, 6:09 pm

Brian Gilp wrote:
September 27th, 2019, 7:10 am
GregT wrote:
September 26th, 2019, 7:18 pm
Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Seriously Casey? You'd rather get nothing than something? The fact that you sold cheap doesn't mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.

I don't know. Doesn't seem to make business sense.
My wife has has a jewelry business where she purchases stones, metal, pearls, etc from numerous suppliers. She has walked away from more than one of them after finding out that they sold the same product to someone else at a lower price. I totally understand the decision to not upset existing customers.
Isn’t that just an indication that there is not enough open information across the market to establish proper pricing?
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#71 Post by Adam G » September 27th, 2019, 7:11 pm

Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Partnering with a Berserker Winery to get a bunch of it into our hands could be a boon for everybody...just a thought!
Sites like casemates.com also commission branded wines that can help good leftover fruit go to good homes where people will appreciate it (albeit at a generally lower price point).
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#72 Post by GregT » September 27th, 2019, 7:29 pm

At least Cameron Hughes is going to be doing OK.

https://www.forbes.com/sites/johnmarian ... 059ec63824

And he mentions something that others have told me, which is that the younger people are not taking up wine at the same rate that the older generation did.

As for walking away from stones that were sold at a lower price - was the lower price before or after she was offered the materials? If the seller raised the price when she came through the door, I'd have left too. But if she found out that after she bought them he sold the rest at a clearance price, I don't see that as being a problem. People clear things out all the time. More importantly however, grapes are very perishable and there's a short period of time in which to make your decision. Seems like a guy along the lines of Hughes would be on everyone's cell phone.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#73 Post by Dale Williams » September 27th, 2019, 7:47 pm

GregT wrote:
September 27th, 2019, 7:29 pm
At least Cameron Hughes is going to be doing OK.

https://www.forbes.com/sites/johnmarian ... 059ec63824
'
I thought Cameron Hughes Wines went bankrupt and was sold? And that's when he started the whole HG Beef thing?

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#74 Post by rsmithjr » September 28th, 2019, 9:34 am

Dale Williams wrote:
September 27th, 2019, 7:47 pm
GregT wrote:
September 27th, 2019, 7:29 pm
At least Cameron Hughes is going to be doing OK.

https://www.forbes.com/sites/johnmarian ... 059ec63824
'
I thought Cameron Hughes Wines went bankrupt and was sold? And that's when he started the whole HG Beef thing?
He is still involved, I am sure he has a contract and maybe some ownership. I love his Monte Rosso cabs, and some of his Napa Cabs are fantastic values.
Roger Smith- Longtime wine drinker and bon vivant'

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#75 Post by GregT » September 28th, 2019, 2:19 pm

Vintage bought it out of bankruptcy but they didn't close it down. They just paid off the debt to the banks and said they'd operate it as a stand alone business. They helped with cash flow and intended to keep the business going. Cameron also stayed involved. Vintage thought it was a good fit because at one point they warehoused wine for Hughes and they were already in Costco because they provide the Kirkland brand wines. With Hughes they got additional shelf space at Costco, in addition to a DTC channel.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#76 Post by Howard Cooper » September 28th, 2019, 3:29 pm

I look at how much prices for wine have gone up over the last 5-10 years and I say that this is great. Wine prices have gotten ridiculous and to me this is the best news I have read in a long time.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#77 Post by Gray G » September 28th, 2019, 3:44 pm

Howard Cooper wrote:
September 28th, 2019, 3:29 pm
I look at how much prices for wine have gone up over the last 5-10 years and I say that this is great. Wine prices have gotten ridiculous and to me this is the best news I have read in a long time.
plus 100

there is more juice in the world than ever and the quality is also better than ever

cheers
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#78 Post by Dan Kravitz » September 28th, 2019, 5:33 pm

My off-the-cuff, somewhat tongue-in-cheek, not-yet-crying-in-my-beer, gently fact-polluted take:

The problem is worldwide.
Wine consumption in the U.S. is stable, with the occasional microscopic decrease in per-capita consumption offset by the growth in population.
The product mix is changing rapidly. Consumption of supermarket 3L and 5L boxed wines is nosediving even faster than consumption of Bugweiser (“the Beer that Infested Saint Louis”).
Consumption of all other categories is increasing gently, except for ‘super-premium’, variously defined as over $10, 12, 15 or 20, which is growing very rapidly.

My business has been affected by over-supply. We were early in the Rose market; I’ve imported my sole Provence producer for 30 years. That wine is well-established and sales have been steady to growing in the face of a tsunami of competition for the past few years. However my other Roses have suffered decreased sales. I finished last year with a lot of stock that had to be closed out. I bought less Rose this year and it’s sold through.
As little as five years ago, a good retailer would stock 5 – 20 Roses. Today, 50 is a typical number. Even if sales go up by 10 – 20%, it’s obviously a lot fewer bottles per wine. This is an extreme example, but indicative of a global over-supply.

Wine consumption world-wide is growing strongly in almost every other country, with exceptions for places like Venezuela, Zimbabwe and Tuvalu.

Millennials are more likely to be vegetarian than teetotal, although there are a significant number who are both. Whether from an ecological, spiritual or health point of view, vegetarianism clearly makes more sense. Wine (and beer, and spirits), consumed in moderation, should be guilt-free.

To Sh@n A: Your ‘anecdotes’ are just that… not statistics. Extremes attract the attention of media, so you see anecdotes that do not reflect the general population of millennials.

I have not seen any statistics on consumption of what board members would probably consider ‘super-premium’, which I will arbitrarily define as $50+. My guess is that consumption of wine in this category is growing very strongly worldwide. The problem is that production is growing far, far faster. The number of people who have made (or inherited) money and want the winery-owner ‘life-style’ is appalling. There are many documented instances of new producers who establish the price of their wine by calculating production costs and margins before a single grape has been harvested.
How many board members have bought Perrarus?
That’s what I thought.

To Michael Martin: It’s fortunately not only old white guys who buy wine (there’s more evidence for golf and Corvettes). Please remember that over half the wine purchased in our own country is purchased by women. I’ll take a wild guess that women represent less than half the golfers and less than half the Corvette buyers.

To Adam Lee: If Constellation had a contract for this vineyard, how can they simply say they are not going to buy the grapes, and walk away?
Oh, they can afford more expensive lawyers than the vineyard owner, sorry I asked such a stupid question. There’s capitalism, and there is unregulated capitalism.

What is happening is easy to explain. As little as twenty years ago, an American consumer who wanted an artisanal beverage with alcohol wanted wine. Sam Adams, Sierra Nevada and Maker’s Mark were just making their marks in the market. Today the consumer has a choice. But eventually, for most consumers, wine is a more appropriate alcoholic beverage to accompany a meal than either spirits (NO!) or beer (it’s close, and dependent on a lot of factors). The future is fine, with bumps in the road.

The wine market has been around for at least 8000 years (probably started in China… so what’s new? Although it could have been Georgia). I don’t know if it will be around for another 8000 years. But I expect to be selling the stuff and to make money doing it through at least 2020.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#79 Post by Dan Kravitz » September 28th, 2019, 5:49 pm

To Nathan Smyth,

You seem to have an obsession about residual sugar in California wines, which based on limited sampling by a colleague, might be inaccurate.

A cheap saccharometer will measure residual sugar as low as 0.15%. A friend who owns a small wine shop here in Maine has one and uses it regularly. He carries a normal selection of California wines and reports that very few of the wines he carries register above that level. He’s not selling $50 – 500 California Cabs or anything really exotic or expensive, although he does like somewhat offbeat wines. K-J Chardonnay consistently registers at about 0.30% RS. Mondavi Napa Cab is below the threshold. So is Fetzer Sundial Chardonnay as well as all of the Bonterras he’s measured. So is Stags Leap Petite Sirah, so is Ridge Estate Cab (he usually carries this rather than Monte Bello, being in a price-sensitive market). Zins sin more frequently than other wines.

Nathan, please post a list of wines that you know for a fact are high in R.S. Is it possible that your new diet has made you hyper-sensitive to R.S., possibly even to the point of detecting it when it isn’t there?

Nathan, I eagerly await your detailed reply, complete with specific RS levels for all wines mentioned.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#80 Post by Kris Patten » September 28th, 2019, 5:53 pm

Dan,

KJ Chard is 7.9 g/L, a bit higher than the 0.3% you quote, but to your point, I don't see a bunch of amped up sugar bombs outside of the labels you'd just expect to be sweet, and I have to taste thru a lot of wine for a living and not all of it is fun, just work.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#81 Post by Ian S » September 28th, 2019, 6:29 pm

Adam G wrote:
September 27th, 2019, 7:11 pm

Partnering with a Berserker Winery to get a bunch of it into our hands could be a boon for everybody...just a thought!
Small side custom crush opportunities abound. You'd be daft not to check out sites that offer them.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#82 Post by Ian S » September 28th, 2019, 6:30 pm

Doug Schulman wrote:
September 11th, 2019, 10:02 am

I do wonder, though, why anyone ever tries to reason with Nathan or get him to make sense. There is no point. Everyone can see his posts for what they are.
Nathan is no Alan Eden. [snort.gif]
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#83 Post by Scott Brunson » September 29th, 2019, 4:23 am

Ian S wrote:
September 28th, 2019, 6:30 pm
Doug Schulman wrote:
September 11th, 2019, 10:02 am

I do wonder, though, why anyone ever tries to reason with Nathan or get him to make sense. There is no point. Everyone can see his posts for what they are.
Nathan is no Alan Eden. [snort.gif]
His posts frequently make as much sense as most of Alan's posts did though.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#84 Post by Dan Kravitz » September 29th, 2019, 5:47 pm

to Kris Patten,

I am very surprised by your post that KJ Chard is 7.9g/l of RS (or 0.79% for those who use American terminology).

I personally have not seen a test run for about 10 years, done at her home by my friend Lucie Morton, a respected viticultural consultant. At that time, it was just over 3g/l. I called my friend in Maine. He hasn't tested in a few years, but remembers 3.8g/l. Again this is far from precise and far from up to date, but all my previous readings, going back 3 - 15 years have been in the 3 - 4g/l range.

Is it possible that KJ 'fine-tunes' depending on the market? I see that this reading is from Quebec. Do you have a reading from the state of Washington, or anywhere else?

I do not doubt either you or the SAQ, but this seems a little anomalous.
Or maybe not:
KJ ships with higher RS the colder the customer's climate?

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#85 Post by Kris Patten » September 29th, 2019, 5:56 pm

Dan,

No clue, I just know that Canada has much stricter reporting standards to sell your wines in their territories than in the US when it comes to wine chemistry, so I frequently look there to see cepage or RS as many companies won't share it in US.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#86 Post by Dan Kravitz » September 29th, 2019, 6:01 pm

Kris,

Thanks. I'm going to buy a bottle of KJ (close to my first, although I've drunk countless glasses in airports and restaurants that are otherwise wine deserts) and run the test. If they are fine-tuning, which would not be a surprise, I guess Maine would be a little lower than Quebec in RS. And I'll ask my peeps in Virginia to do the same. I have no horse in this race, just curiousity.

We are into serious thread drift, but so be it.

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#87 Post by Randy Bowman » September 30th, 2019, 7:36 pm

Back on topic: In the last week I have spoken to two growers asking if we knew anybody looking for vineyard sources for next year as their contracts end this year AND the current contractor will not be renewing at current contract prices. Sitting here listening to the second one.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#88 Post by larry schaffer » October 1st, 2019, 7:36 am

Yep, lots of extra fruit out there for great prices if you're willing to pull the trigger - and realize how much it will actually cost to MAKE the wine and then try to SELL it!!!

Cheers.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#89 Post by GregT » October 1st, 2019, 10:26 am

I think it's the latter that puts people off because they get in and have no idea how difficult it is to sell. My advice for anyone contemplating getting into the wine business is to start on the wholesale side. Not retail, where you collect a salary, however small, and spend your days talking to customers about wines you've tasted through and like, but trying to move pallets of wine out of a warehouse. Anyone who thinks that quality is all that matters has no clue.

OTOH, making a few barrels for yourself and friends could be a fun exercise.

Dan - did you see the study that Gallo did just a while ago? There were some interesting findings. Most interesting to me was that they confirmed online as the way to market wine, rather than reviews, scores, etc. And Gallo is smart. If people want sweet flavored wine, they will get it from Gallo, which has turned their Apothic brand into the largest brand in the over-$10 market. And they've created the Apothic Brew, which is coffee and wine together. Ugh! They're offering carbonated Barefoot in cans.

Constellation has nearly doubled the sales of Meiomi since the purchase in 2015. They've added rosé, which may have been around before, I don't know, and now a sparkling version.

From SevenFifty - Most of rosé’s consumers (40 percent) are women aged 21 to 34 years old. Many live in urban settings, with New York City accounting for 25 percent of all rosé imports, and Miami making up an additional 15 percent.

You're right - wine has been around for a long time. But the question is - what wine? What was once done to wine - seawater, pitch, flavorings, would not be something I would like to drink. And what's being done to it now - 19 Crimes, Meomi, coffee blends, is not something I care to drink either!
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#90 Post by Markus S » October 1st, 2019, 10:50 am

Brian Gilp wrote:
September 27th, 2019, 7:10 am
GregT wrote:
September 26th, 2019, 7:18 pm
Casey Hartlip wrote:
September 26th, 2019, 5:33 pm
Looking like I'll be leaving about 30 tons out there when it's all said and done. A split between Pinot and Chard. What would I do if winery X came to me with an offer of 50% of what I sold to others? No way. I won't give a bottom feeder ultra quality fruit and an unfair advantage in the market and disrespect my clients.
Seriously Casey? You'd rather get nothing than something? The fact that you sold cheap doesn't mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.

I don't know. Doesn't seem to make business sense.
My wife has has a jewelry business where she purchases stones, metal, pearls, etc from numerous suppliers. She has walked away from more than one of them after finding out that they sold the same product to someone else at a lower price. I totally understand the decision to not upset existing customers.
Shit, if this is the model of American capitalism, Amazon (and airlines and anyone else practicing 'dynamic pricing' would be out of business.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#91 Post by R M Kriete » October 1st, 2019, 11:14 am

Markus S wrote:
October 1st, 2019, 10:50 am
Brian Gilp wrote:
September 27th, 2019, 7:10 am
GregT wrote:
September 26th, 2019, 7:18 pm


Seriously Casey? You'd rather get nothing than something? The fact that you sold cheap doesn't mean that you have to do it next year. That hypothetical guy would be getting a one time opportunity. Unless people treat wine as a simple commodity, any advantage in the market would not come strictly from the juice, but from the marketing and effort people put into selling the wine. Also, you might be able to get some agreement that links the wine to you.

I don't know. Doesn't seem to make business sense.
My wife has has a jewelry business where she purchases stones, metal, pearls, etc from numerous suppliers. She has walked away from more than one of them after finding out that they sold the same product to someone else at a lower price. I totally understand the decision to not upset existing customers.
Shit, if this is the model of American capitalism, Amazon (and airlines and anyone else practicing 'dynamic pricing' would be out of business.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#92 Post by Casey Hartlip » October 1st, 2019, 11:34 am

Looking now like we'll only leave about 5 tons of Chardonnay. Pinot TBD.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#93 Post by Markus S » October 1st, 2019, 2:08 pm

Casey Hartlip wrote:
October 1st, 2019, 11:34 am
Looking now like we'll only leave about 5 tons of Chardonnay. Pinot TBD.
Casey, this might be a stupid question, but when you 'leave fruit', what happens to it? I know field crops that are left get plowed under, but what about the grapes?
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#94 Post by Casey Hartlip » October 1st, 2019, 2:18 pm

Markus S wrote:
October 1st, 2019, 2:08 pm
Casey Hartlip wrote:
October 1st, 2019, 11:34 am
Looking now like we'll only leave about 5 tons of Chardonnay. Pinot TBD.
Casey, this might be a stupid question, but when you 'leave fruit', what happens to it? I know field crops that are left get plowed under, but what about the grapes?
We'll either drop them on the ground especially if it's in a high visibility area or just let the rain, weather, birds and critters take care of them.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#95 Post by Josh Grossman » October 1st, 2019, 2:29 pm

Markus S wrote:
October 1st, 2019, 2:08 pm
Casey Hartlip wrote:
October 1st, 2019, 11:34 am
Looking now like we'll only leave about 5 tons of Chardonnay. Pinot TBD.
Casey, this might be a stupid question, but when you 'leave fruit', what happens to it? I know field crops that are left get plowed under, but what about the grapes?
Hopefully a private stash of SGN? Fat deer and raccoons? I want to know also. Wouldn't that increase disease pressure for the next year, like greenaria and black rot?

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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#96 Post by Casey Hartlip » October 1st, 2019, 5:17 pm

Yes leaving the fruit on the vine is less than optimal. We'll have enough income and cushion that we'll likely drop it. It gives my folks some more hours. We will throw the fruit into the row rather than drop them directly under the vine. Less disease pressure and less acid leaching down through the soils.

Those poor guys leaving 100's of tons certainly won't of the funds or inclination to clean things up properly. I'm kind of starting to have 'survivor guilt' already. So many of my fellow growers will be hurt badly, and here we are doing so well.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#97 Post by T Klonoski » October 2nd, 2019, 4:55 am

Thanks to all (except Nathan) for a very interesting thread. Great read.
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#98 Post by Nick F. » October 17th, 2019, 11:08 am

GregT wrote:
September 27th, 2019, 7:29 pm
At least Cameron Hughes is going to be doing OK.

https://www.forbes.com/sites/johnmarian ... 059ec63824

And he mentions something that others have told me, which is that the younger people are not taking up wine at the same rate that the older generation did.

As for walking away from stones that were sold at a lower price - was the lower price before or after she was offered the materials? If the seller raised the price when she came through the door, I'd have left too. But if she found out that after she bought them he sold the rest at a clearance price, I don't see that as being a problem. People clear things out all the time. More importantly however, grapes are very perishable and there's a short period of time in which to make your decision. Seems like a guy along the lines of Hughes would be on everyone's cell phone.
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Dear Friends,

It’s time to introduce our first superstar Cabernet of the season.

At the moment, Napa Valley finds itself in a state of oversupply – while the market prices for Cabernet still remain high, the current conditions allowed us to be extra picky this year. What does that mean for the members of this list? You’re really getting the cream of the crop this year.

Lot 697 Napa Valley Cabernet Sauvignon is a blockbuster Cabernet sourced from a gentleman whose efforts spearheading viticulture efforts in Napa Valley have been felt for 40+ years now. Produced by one of the most experienced winemakers in the valley (with a two-decade stint at one of Oakville’s most iconic estates), the wine is made from all estate fruit from Atlas Peak. Due to the terms of the NDA we couldn’t put Atlas Peak on the label, but rest assured, this is prime Atlas Peak Cab that sells for $100+ under its original label – yours today for less than a third of the price.

Only 300 cases are available. Get yours while you can!
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#99 Post by rsmithjr » October 27th, 2019, 10:13 am

Cameron Hughes in a video on a 2016 Atlas Peak CS he is selling (sold out) mentioned there was an excess of HIGH QUALITY Cabernet on the market. Look up lot 697 on the CHWINE.COM website.

Now does that mean Bond, Harlan, Diamond Creek are going to lower their prices.... I dont think so.

Will it affect Beringer Knights Valley CS, etc.... maybe
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Re: Oversupply in the Grape and Bulk Wine Market - And What This May Mean . . .

#100 Post by ATaylor » November 25th, 2019, 12:09 pm

Here is an article just published in the local Napa rag:

https://napavalleyregister.com/news/loc ... 8028dc.htm
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