So I’ve been hearing some rumblings recently about availability of grapes in California, particularly in Sonoma, and it’s made me wonder about the economic outlook on wine in the industry in 2025. Then I came across this listing:
Sure, Dutton Ranch is a big operation – and grows really high quality fruit – but it shocked me that 700 tons of RRV Pinot Noir is listed as available. Tha’ts a LOT.
This seems like a big story to me, and I wonder just how deep it cuts into the industry I love so much in Sonoma. Trying times. Thoughts from folks here? Maybe this is the year to take the leap and make a barrel of wine.
This isn’t an isolated phenomenon, and it is a very real phenomenon.
A Napa winemaker I spoke to recently told me that some very well-known wineries are trying to back out of large portions of their grape contracts. He says that there will be a “apocalyptic“ amount of fruit dropped or left hanging this harvest.
I also read what Kathleen Inman and Alison Story wrote on FB. Very disheartening to hear Alison say that she is being offered fruit at no cost, but it’s still not able to make Wine from it.
Everyone needs to understand the cost of grapes is a very small part of the entire process. Once you make the decision to pick, then the cash tower really opens and stays open for a very long time. That is the challenge. Trying to look ahead 18 months to three years to see what is going to be happening.
700 tons might seem like a lot from a small winery perspective, but Dutton Ranch is a big operation, producing thousands of tons of RRV fruit. They sell to a wide range of wineries. In a contracting sales environment, and after a very large 2023 harvest and a decently sized 2024, you can expect a lot of people to be making less 2025 to rebalance their supply. So there are many thousands of tons across Sonoma that will go unpicked this year.
I think Dutton Farms about 1200 acres of grapes. Assuming 60% of those are Pinot Noir and an average yield of 5 tons per acre (may be high) that’s 3600 tons of Pinot Noir. Having 20% of your Pinot Noir unsold is a significant amount, I’d think.
I’ve been offered so much fruit for pennies on the dollar already, but when you’re in a custom crush facility and pay through the nose for each ton that darken their doorstep, it’s just not possible to take it on even if free. If I had my own facility, then it would be much easier. It’d just be the time, transport and barrel costs (at least initially) then.
I did a retirement gig at a winery for a few years during harvest and contracts were just starting to dry up. Had a lot of growers asking if we wanted their fruit for cheap, but we had all our fermenting and storage space/vessels spoken for and no room to put it. Then if we had room, we’d still be sitting on surplus wine. Enough of that going around!
The glut hit really hard last year. I saw some small labels, especially custom crush, make nothing. Plenty of small wineries sitting on slower moving inventory cut back quite a bit on production, both in volume and number of wines. I’m seeing wineries go out of business. It’s a good time for many to wind things down, selling through their inventory and not harvesting anything new. There’s a lot of really high quality grapes available, really tempting. But, if you’re treading water or trimming back, how does anyone justify picking up a new source?
I’ve seen market corrections and short-term economy down-turns, where some wineries trimmed back for a vintage. Some lucked out with the low yield 2011 vintage and merely didn’t look to make up the lost volume because they had inventory to move. That’s not now. We’re in a global wine glut, which looks like a significant long-term drop in demand.
This would be a great time for someone with the cash and a solid long-term business plan to jump in and bail out some top-notch growers. Start a great relationship with a dream vineyard. I’ve seen that happen in the past, but it seems like a pipe dream in the current situation.
Next they’ll be ripping out vineyards. Charles Krug pulled the big plot in the corner of 29 and Deer Park Rd. Last year Gallo cut the trunks on the vines at Laguna Ranch.
Step-son told me Gallo is pulling a bunch of vineyards and letting them go tallow. They just did a 30% reduction in their vineyard manager force, him included.
I was driving down Slusser Rd the other day and Talawind Ranch at Russian Hill Winery was ripping out their vineyard. Today coming into Forestville they were tearing out Vine Hill Ranch along Hwy 116. No sense growing fruit you can’t sell.
A friend would happily buy all that tallow, as she now uses on toast for breakfast.
On salad for lunch.
On face and hands for skin treatment.
On hair for conditioning.
Onward……
