Ciatti is committed to providing you with all your wine and drink making needs. Whether you are after 5 gallon pails or bulk tanker quantities, we can help find the right product for your needs.

The following are products we source from around the world:

Bulk Wine

The Ciatti Advantage

Ciatti specializes in brokering bulk wines, and uses this expertise and knowledge to be the world's largest wine brokerage company.

We use our local and global knowledge and extensive network to bring growers, suppliers and end-users together.  With eight offices located around the world representing all major wine growing countries, we can offer global supply solutions to an extremely diverse international client base.

We have built strong relationships with all of the world's major wine companies. We are recognized internationally for reliable information and extensive bulk wine inventories, in both volume and quality.

Our goal is to provide the best information, experience, inventory and service in the global bulk wine market. As we are a pure brokerage company, we take no position on the wine so you will be guaranteed the best unbiased opinion on quality, price and demand.

The Purchase Process

Ciatti recommends that customers take advantage of the wine sample system to assist in finding the perfect wine. No matter what volume of wine you are looking for we can assist in finding the perfect match for your requirements. We work with all valued customers to develop required wine specification details, which can later be used to form part of the purchase terms. The wine brokers operate within individual markets, but their global knowledge they can help source wine styles and prices from our global inventory. Once we are aware of your wine style requirements we will organize samples for style approval.

Ciatti negotiates both spot market and long term bulk wine contracts. We are responsible for matching the needs of the buyer with the available supply options from a diverse range of producers. This enables buyers to diversify their supply risk.

Evaluation Services

Ciatti provides an independent wine evaluation and appraisal service to the wine industry. This includes feedback to suppliers and producers on the quality, marketability and current demand in the marketplace of their wines.

The tasting panel consists of wine professionals associated in various roles in the wine industry (Winemaking, Sales and Marketing) who are able to give opinions on quality and current demand for the wines both domestically and internationally.

Wines are tasted and analyzed so we can provide detailed tasting notes, as well as a guide to demand and price range for the current market conditions. If needed, our staff can answer questions or provide further information before the tasting occurs. Once completed Ciatti is happy to discuss the outcome with the supplier or producer.

Grapes

Ciatti can help source or sell grapes prior to and during vintage time. All of our brokers have extensive knowledge and relationships in the domestic markets, and they utilize this information to find the perfect buyer or seller for your requirements. Grapes can be sourced from any growing region, which ensures the perfect parcel can be found for any situation.

The brokers can assist with and facilitate:

·         Vineyard Inspections

·         On-site grape tastings

·         Selecting harvest options

·         Defining grape or wine parameters before picking (Baume/ Brix levels, grape specifications)

·         Organizing third parties (Transport, winery space and storage)

Please don't hesitate to contact your local office to discuss any of your grape needs.

Grape Juice Concentrate

Standard White Grape Juice Concentrate

Sourced from California, Argentina, Australia, Chile, Italy, Spain and South Africa, we can fill your standard white grape juice concentrate requirements. Whether you're looking for crude, standard, organic, extra light or Kosher certified we have you covered.

Red 2000, 1600, 1000, 700, 600, 400 Grape Juice Concentrate

Sourced from California, Chile, Australia, Italy and Spain, Ciatti can source red juice concentrates of every colour intensity for your needs. These products are also available in crude, standard, organic and kosher.

Varietal Grape Juice Concentrate

Available Varietals include:

Specialty Grape Juice Concentrates

Available specifically in the US, we can source Mega Natural (R) 8000 colours in red, purple and cherry. We can also assist in Grape Juice Concentrate 8000 in red and purple.

Also available Grape seed extracts, hi proof grape spirits, brandy, (aged and unaged), grape oils and flour and pomegranate essence and arils.

Fruit Juice Concentrates

For any queries in the US, please contact our concentrate specialist broker Greg MaGill. If you have any global concentrate or juice enquiry, please contact your closest Ciatti Office.

After many months of very strong pro-seller conditions in the bulk market, signs are now pointing towards a time when buyers regain some control. With strong harvests being reported across the board in the Southern Hemisphere, and a record sized 2012 crop in California, the bulk market is now experiencing a softening of prices in most markets. All countries are now reporting either stable or decreasing prices across all varietals, with the exception of dry white wine in selected markets.

The world economy continues to be a concern, especially in Europe, and Government policies in Argentina have severely impacted the local wine industry. Given the headwinds of the economy and more abundance in supply, the market picture seems somewhat less positive than it did only a few months ago.

There are more opportunities for buyers today than we have seen over the past couple of years. In addition, many feel that with a lower cost supply structure, overall demand will increase in the near future.

For the full Ciatti Company - Global Market Update, CLICK HERE

The month of May brings spring in the Northern Hemisphere and high hopes for the 2013 vintage. May also brings the results of the Southern Hemisphere harvest. The April 2013 World Report predicted strong numbers, and was correct indeed. All major supply countries had harvests that were nearly equal to, or greater than that of last year. Quality is looking good, even excellent, all around the world.

Spring in California has come early this year, with some flowering already taking place. One grower commented that things are as early as 2004, which was well ahead of the average. There still remains a long time until the 2013 harvest harvest, but thus far things are looking good. Europe is finally emerging from the coldest winter in fifty years, and hopes remain high for a good harvest.

For the full Ciatti Company - Global Market Update, CLICK HERE

April marks the end of harvest for much of the Southern Hemisphere, and all predictions call for strong numbers across the board. All major supply countries are expecting harvests that are nearly equal to, or greater than that of last year. Argentina should see the largest increase in production, as the 2012 vintage year was much lower than the average. Chile looks to increase on its record 2012 crop, with Australia and South Africa looking to match results of previous years.

The annual ProWein event was held in Germany in March, and buyers and sellers of bulk wine were active. The trade show was well attended, and most of the exhibitors seemed happy with the results. Most agree that despite low 2012 harvest numbers from Europe, pricing on the bulk market continues to soften, giving buyers relief from the historic highs that were experienced over the past several quarters. While generic wines are short of supply, most varietals are balanced, with some trending towards a long position.

Thank you to everyone that visited the Ciatti stand at ProWein. We look forward to seeing many of you next month in London.

For the full Ciatti Company – Global Market Update, click here.

The 2013 harvest has begun in the southern hemisphere, and hopes remain high in most markets. South Africa is reporting strong numbers in most regions. However, some areas have seen disease-causing weather events. Overall, the crop should be above average and of good quality. Argentina is looking better than last year, with expectations for a much larger crop than last years disappointing result. Chilean forecasts are mixed, with weather problems causing for some uncertainty. The Australian harvest is in full swing, and again, no major decreases in volume are expected.

The effects of the large California crop are setting in, as new opportunities are now being presented in the bulk wine market. Prices in some areas are decreasing slightly, and most varietals are now available in the spot market. The grape juice concentrate market remains active, as buyers continue to look across the globe for supply.

The market looks to be in balance for most varieties, as both buyers and sellers seem to be finding enough opportunity to keep the market moving quickly. The ProWein show in Germany will be underway in a matter of weeks, and expectations are for a lot of activity.

For the Ciatti Company – Global Market Update, click here.

CALIFORNIA WINE & GRAPES BY REGION − FEBRUARY 2013

Market Snapshot

Crush Report Overview　

What surprised us was not that this was the biggest grape crop in California history, but rather that there was a 20% increase in average grape price. How wineries are going to digest these big volumes at higher prices remains to be seen. There could also be some pullback in the valley market if bulk imports continue to increase at last year’s rate which was the equivalent of forty million cases.

Crush Report Highlights:

-The state 2012 Pinot Noir crop size reached its highest yet of 247,000 tons up 45% overall from 2011. Monterey and Sonoma county Pinot Noir crops were up over 85% vs. last year. We experienced yields per ton on Pinot Noir in many areas that were not thought possible.

-The 2012 Napa Valley Cabernet Sauvignon crop was both the biggest in history and saw a historic high in pricing.

-The Sonoma County Chardonnay crop was up 54%.

-Zinfandel saw the largest price increase of core varieties, up 25%.

California Wine & Grapes by Region

North Coast

Grapes

In 2012 we saw significantly above average crops in both Napa and Sonoma centered on Pinot Noir (up 85% in Sonoma), Chardonnay (up over 50% in both Napa and Sonoma), and Merlot (up over 45% in both Napa and Sonoma). We expect that this crop size will balance the market for grapes as we continue on in 2013. Other parts of the North Coast we're not as heavy such as Mendocino and Lake County which is somewhat the opposite of the 2011 harvest. Grape prices should remain stable because we have seen a good level of early interest. Also, there were many long term grape contracts entered into last year, so the amount grapes available for purchase vs last year will be reduced. As always, concerns around crop size, frost, rain, and other issues that could affect the 2013 crop will continue to be topics of observation as we move towards summertime.

Wine

The large 2012 vintage North Coast grape harvest has brought a "return to normalcy" in North Coast bulk wine pricing after the run up in pricing in calendar years 2011 and 2012. Because of that run up in the previous two years, we don’t see a large carry over inventory of previous vintage bulk wines which will help maintain a floor for North Coast bulk wine prices. The one exception to that lack of carry over inventory is 2011 Napa Valley Cabernet Sauvignon of which we see a large volume on the bulk market. Coupled with the biggest Napa Cab crop in history (just surpassing 2005 at 70,935 tons) that is of very good quality, these 2011 Napa Cab bulk wines could prove challenging to move at the previously expected prices.

CENTRAL COAST

Grapes

With the 2012 harvest, the Central Coast region strikes a balanced position in wine grape supply. The abundant 2012 crop follows a drastically short 2011 harvest which was down more than 25% when compared to 2009 and 2010. The

2012 harvest has relieved some short term problems for California wineries that had needs for Paso Robles Cabernet Sauvignon, or Monterey Pinot Noir and Chardonnay. The intense buying activity that started a full year prior to the 2012 harvest gives the impression that this trend will continue in 2013. The biggest take away from the Grape Crush Report was the increase in grape pricing.

Cabernet and Merlot prices were up 15% overall, and Chardonnay prices were up 7% on the Central Coast. This price increase was typical of what we saw throughout the rest of the state.

Wine

The wine quality from 2012 harvest is excellent, after favorable harvest weather allowed for fully mature fruit. Bulk wine inventories for the Central Coast are back to normal levels after ‘empty winery cellars’ were once again filled to capacity.  Buying activity is strong for the major varieties of Chardonnay, Cabernet and Pinot Noir. Bulk pricing seems to be returning to normal levels after last year’s highs. Within the last six months, Central Coast bulk pricing has fallen by approximately $2/gallon and seems stable. The total Central Coast districts crushed an additional 158,000 tons which would equate to 27 million more gallons of wine when compared to last year.

Going forward in 2013, we expect to see bulk wine pricing more in line with where average 2012 grape prices were -

with the one potential exception being 2012 Sonoma County Pinot Noir, as it was such a large crop (up 85% over 2011 tonnage). We have already seen that bulk wine price fall below the equivalent of average 2012 grape pricing.

Cabernet Sauvignon bulk wine that is competitively priced will still be in high demand in 2013, as evidenced by the scarcity of 2011 product from Sonoma, Mendocino, or Lake County.

LODI / CENTRAL VALLEY

Grapes

As the state’s total winegrape crush increased an impressive 20% from 2011, the Interior (districts 9, 11, 12, 13, 14, 17) saw less of an increase jumping up 13%. The Southern Interior had single digit gains of only 4%. The Northern Interior was up 32% but this was after a 2011 harvest which was down significantly. Lodi had tremendous growth in Zinfandel (up 53%), Chardonnay (up 39%), and Cabernet (up 36%). As a result of a two year buying frenzy which brought a wave of multi-year contract signings, the valley currently has the largest quantity of grapes under contract in more than a decade. Availability is slim and a bit unknown as renegotiations on expiring contracts have been taking place. Pricing is solid but appears slightly disconnected between buyers and sellers leaving both sides evaluating their needs.

Wine

With the increase in production, wineries have recovered from the bulk shortages of 2011 and now have inventory available. The Valley crushed 84,000 more tons of Chardonnay, 80,000 more tons of Zinfandel, and 53,000 more tons of Cabernet then in 2011, an increase equivalent to 77,000,000 gallons of wine. As a result, overall pricing has softened, decreasing on average of 20%. Carry-over of older vintages is virtually non-existent with wineries focusing on current vintage. Quality appears very good although there is some variation due to transitioning of Zinfandel vineyards. With increased production, wineries may now be able to relieve some the pressure of imported bulk wine and may also seek export opportunities which has been limited over the last two years due to lack supply.

(San Rafael, Calif.) – February 8, 2013 - The Preliminary California Grape Crush Report released today shows the 2012 Winegrape crop reached an all-time high of 4.014 M Tons, which was surprising given the limited amount of new planting in the state.  This production was needed given the shorter crops from the previous two years and the growing consumer demand for case goods.  This will provide supply to wineries and bring the overall market back into balance as we enter 2013.

The state 2012 Pinot Noir crop size reached it’s highest yet of 247,000 tons up 45% overall from 2011.  Monterey and Sonoma county Pinot Noir crops were up over 85% vs last year. We experienced yields per ton on Pinot Noir in many areas that were not thought possible.

Quality for 2012 should be outstanding, with winemakers with many years of experience saying this is the best quality year they have ever seen.

This large California crop was driven by historically high yields in the Central Coast, Napa, Sonoma, and Lodi.  The Central Valley was up but just slightly over last year. 

The Cabernet crop in California was the largest since the historical 2005 crop.  Demand continues to remain strong and we will see more new planting over the next few years.  The 495,622 tons harvested was needed for growing case good sales.

Bulk wine imports, which grew to approx. 40 M equivalent cases in 2012, will continue to effect the demand for California grapes in the future.  This large increase in imports has been partly due to the recent grape price increases.

The grape and wine market, with the healthy 2012 crop, have moved into a balanced position and wineries and growers should be able to see mutual profitability.  The larger crop and inventories should push the bulk wine market pricing down from the highs of last year, but may have less of an effect on grape pricing.  However much of these pricing changes will depend on case sales growth over the next year.

Consumers should see more availability of California wine in the market place and the larger crops of Pinot Noir and Chardonnay state wide should help to keep prices stable.

2012 Grape Pricing increased by upwards of 20% in many areas of the state.  Multiple buyers where caught needing supply and drove the rise in pricing in these areas.  Wineries are now trying to decide if they will pass these costs of goods increases to the consumer or adjust their margins. 

Please call Glenn Proctor or John White at the Ciatti Company 415-458-5150 for further discussion, and insight.

The Ciatti Company is the world’s largest and most comprehensive bulk wine and grape brokerage.  Aside from its home base in San Rafael, California, seven offices around the world provide clients the kind of information and intelligence that today’s competitive global wine industry demands.

The company, founded in 1972, has deep roots in the wine industry, both in California and the countries in which the company operates.  The current partnership includes industry professionals with over 135 years of collective experience including: John Ciatti, Greg Livengood, Glenn Proctor, John White, Chris Welch and Steve Dorfman.

Contact:

415 458 5150

Lora Parnell  lora@ciatti.com

Glenn Proctor Broker/Partner  glenn@ciatti.com 

John White Broker/Partner johnw@ciatti.com 

For the full California Report, Click Here.

HAPPY NEW YEAR AND WELCOME TO 2013

All of us here at Ciatti would like to welcome you to what we hope will be a prosperous year for all. For the first month of the new year, we thought we would take a look back on the year that was, and do some prognostication about what might be in store for 2013. Therefore, in the pages that are to follow, we have changed a few things for this month only. Starting in February, however, we will resume the regular monthly sections.

For the full Ciatti Company – Global Market Update, click here.

As 2012 comes to a close, the recent wine news has been dominated by reports of crop shortages in Europe. As expected, we have seen a lot of activity in the bulk market, with particular interest in South Africa and Chile. Generic wines, both white and red, have been the targets of European buyers, as they look to supplement their recently depleted stocks. Much of the industry talk has been about the global wine shortage and how this shortage will affect the bulk wine market. While we agree that global wine production will be down in 2012, our view is that dramatic price increases likely will be confined to European markets. Supply excess or shortage is now varietal dependent, with some varietals heading into short-term over supply.

California wineries continue to report that the harvest was of good quality and that volume was up in most areas. Chilean suppliers have seen much of the their generic inventory move to Europe, and new Cabernet Sauvignon offers are looking attractive to buyers across the globe. Argentina awaits the 2013 harvest, hoping to bounce back from a disappointing year regarding harvest volume. South Africa has continued to be a strong source of supply for North Americans and Europeans alike, and contracts for 2013 wines have been abundant.

Despite the supply problems now facing Europe, the bulk market continues to offer many options for those needing wine supply. We now look forward to the 2013 Southern Hemisphere harvest, and indicators are pointing towards solid results across the board.

For the full Ciatti Company – Global Market Update, click here.

The harvests in the Northern Hemisphere have come to a close, and growers across Europe continue to report very weak volume results. France and Italy were hit especially hard, and the shorter crop has caused for increased pricing. In North America, the California crop looks to be large, and we believe it will be the largest wine grape crop in California history. Due to this larger than normal harvest, Californian pricing is expected to moderate from the historic highs of the past twelve months.

In the Southern Hemisphere, sales continue to be brisk in South Africa , as buyers have jumped into the generic white and red varietal markets. The activity from buyers has been strong in both Europe and North America . The Chilean market remains active as well, and while the varietal market has seen increased activity, the generic inventory was heavily depleted by Spanish demand. Prices remain strong in Australia for red wine, while buying opportunity exists for Chardonnay and other white wine.

Moscato demand in the United States remains strong; however, we are hearing reports that demand is beginning to level off. It remains to be seen how the new California plantings will affect the overall Muscat market, but expectations for the future are for a general price decrease in Muscat bulk wine.

For the full Ciatti Company – Global Market Update, click here.

As the 2012 harvest season continues in the Northern Hemisphere, expectations remain very low for the European crop results. All estimates for Italy, France and Spain are for a significant decrease in production, when compared to the 2011 harvest. It is believed that we will see a net decrease of one and a half million metric tonnes from the big three in Europe. The bulk wine market has already begun to feel the effects.

Spanish buyers are moving quickly through Chile and generic wines are quickly disappearing. Chile experienced a historically large crop in 2012, and it looks as though the fears of potential oversupply have now fallen away, replaced by the excitement of a very active market. The varietal market has yet to move from a price perspective, but the bottom end of the market has certainly moved in an upward direction.

The California harvest is well underway. Growers and buyers alike are expecting a large harvest of high quality. The current bulk inventory of California wine remains very low. Therefore, a large harvest would provide welcome relief for California bulk buyers.

For the full Ciatti Company – Global Market Update, click here.

European economic concerns have dominated the headlines over the past several months, and now concerns over European harvest sizes are the big news in the bulk market. Industry experts in Italy, France and Spain are all calling for 2012 crops to be smaller than those of the 2011 harvest. Given the relatively balanced market that we have today, significant crop reductions in these three regions could send the market back into a short position. The California crop looks to be much stronger than last year, and perhaps this larger harvest will, in part, balance some of the losses now expected in Europe.

For the full Ciatti Company – Global Market Update, click here.

The 2012 wine grape crush is upon us with most larger Central Valley wineries already crushing fruit and the balance gearing up to start next week.  The crop appears to be good-sized but not enormous.  Overall, market activity for both bulk wine and grapes has slowed as wineries prepare for harvest.  With so many bulk wine and grape commitments made earlier in the year, buyers appear to be digesting their earlier buying activity and are proceeding more cautiously until harvest unfolds a bit further.

Wine Market Overview

Earlier this year when the industry saw the bulk wine market drastically heat up after the 2011 harvest, one wondered what this meant to the long term structural fundamentals of the wine business and is this a new reality going forward?  The (multi?) million dollar question at that time was (and is): for those that were forced to pay a higher cost of goods on the bulk wine market, were they going to be able to see that higher return at the retail level?  And if not, what does that mean to maintaining the margins at which they were accustomed to working?  As the old saying goes, water finds it’s own level, and with what looks to be an average to above average sized crop on the horizon for 2012, we are  trending back towards bulk wine pricing that probably makes more sense commensurate to what the consumer is seeing on the shelf.  At the least, we are not trending upward in pricing as we were in the first quarter of 2012.

Please contact the us lora@ciatti.com if you would like to subscribe to our bi-monthly California Market Report.

For the majority of the Northern Hemisphere, August marks the beginning of the harvest season. Reports are mixed for the upcoming crop, when compared to that of 2011. California continues to look strong, as both grape pricing and volume indications remain high for the 2012 crop. Italy is looking to rebound from a very small 2011 harvest. France seems to be down slightly from the larger than average crop last year. After experiencing challenging spring weather conditions, Spain is predicting double-digit decline in production for the upcoming harvest.

Reports are in from the Southern Hemisphere and Chile is leading the way with record highs for the 2012 harvest. The crop was the largest crop in Chile to date, showing a 20% increase in production over last year. Prices have held for wines of good quality, but opportunity for buyers certainly still exists. The Australian wine industry has also released official numbers for 2012 and the crop is up slightly over that of last year.

The bulk market remains active, with some slowing during the summer months in the Northern Hemisphere. Buyers are being more selective, now that their options have increased over the previous couple of months. Some are predicting a market correction in the near future, but as sales continue to be strong, it remains to be seen how far the market will pull back from its recent highs.

For the full Ciatti Company – Global Market Update, click here.

For the full Ciatti Company – Pricing Grid, click here.

Below, please find an example of the information that was included in our Inaugural Edition of a California Grape Report to be published bi-monthly.  The next issue, August 2012, is in the works now and will also include a California Wine Market Report.  If you are interested in subscribing to this report please send an email to lora@ciatti.com with "subscribe to California wine & grape report" in the subject.

Grape Market Overview

As we all now know the market started to drastically change in late 2011 before harvest.  It has continued to accelerate and we are now in one of the most active and dynamic markets we have seen in the last 10 years.  Planting contracts are being offered in many  areas of the state and wineries have begun to secure and purchase vineyards which we have not seen for a few years. How far and fast this goes is a hard question to answer.  But it appears for the near term and the 2012 harvest things will continue to be tight – even with the above average crop that many in the state are beginning to predict.  Longer term we expect the market to come back  into balance.  We continue to see wineries look to overseas opportunities to supplement their supply needs.

2012 Crop

Estimating crop is always a difficult and an inaccurate exercise.  The initial thoughts on this years crop is that it will be bigger than last year especially in the Coastal areas and in the Northern  Interior.  The weather to date has also been cooperative with many areas 3 weeks ahead to date of where we stood last year.  But much of the reason for the larger expected crop is the market itself.  Buyers need the supply and growers are leaving on extra buds to meet those desires.  In line with this – we are hearing reports to date that the Cabernet Sauvignon crop looks fairly healthy throughout the state.

We still need to get through set and sizing before we can really know what to expect this harvest.

During the past two years of producing this update, we have seen the global economic world continue to remain in a state of flux. Nimble producers that have kept a flexible sourcing model in this evolving world continue to prosper.

Currently, European economic concerns dominate the headlines; opportunities have now presented themselves in the bulk wine markets. As investors move away from the euro, and towards the relative safety of the dollar, the resulting gain in dollar strength has made several import markets more appealing. Wine from South Africa has attracted the most attention as the SA rand dropped significantly in value against the rebounding dollar. Chardonnay and dry white wine seem to be attracting the most interest from buyers today. The Australian dollar and Chilean peso have also seen relative weakening against the dollar, and wines from those countries are beginning to tempt buyers as well.

The Southern Hemisphere harvests are all winding down, and it appears that we have mixed results. South Africa and Chile look to be above average, Australia is reporting an average harvest, and Argentina and New Zealand have come up short. Producers are starting to make estimates in the Northern Hemisphere, and it is believed that California is looking at a larger than average 2012 crop. Recent storms in France have impacted several areas with varying degrees of crop damage and the extent of the damage is yet to be determined but could affect future crops. Germany and Spain have been experiencing mild temperatures and minimal rainfall. This has allowed for good bud break and fruit set, which should result in an average crop for both countries. While uncertainty remains regarding supply availability, activity remains strong, and prices are holding in most markets.

A big plus for all of us in the global wine industry is that demand for wines around the world remains relatively strong. Consumer thirst for wines from well-known producers in both new brands, in addition to tried and true labels, continues to grow. Paying close attention to all economic, supply and demand factors, as well as remaining agile, seems to be the current key to success.

For the full Ciatti Company – Global Market Update, click here.

For the full Ciatti Company – Pricing Grid, click here.

July marks the middle of summer in the Northern Hemisphere, and expectations are for healthy crops across all of the major producing regions. After a disappointing 2011 crop, especially in California and Italy, a larger crop would be welcome relief to many buyers in the bulk market. Prices moved higher at a rapid pace in California over the past twelve months. It appears that a plateau has been reached, and some pricing softness exists for certain varieties in the commercial growing areas. Italy looks to rebound from last year’s small crop, which should help take some of the pressure off of the recently overheated market in Spain. French producers in the Languedoc saw a larger than usual crop in 2011, and are still looking to move some white inventory. The economy in Europe continues to be a cause for alarm in the bulk market, as buyers continue to send messages of concern about pricing and corresponding consumption levels.

For the full Ciatti Company – Global Market Update, click here.

For the full Ciatti Company – Pricing Grid, click here.

The harvests in the Southern Hemisphere are winding down, and the results look to be mixed. Chile is leading the way with what looks to be a strong harvest from a volume perspective and Australia and South Africa also look to have come through with strong results. The expectations are not as high in Argentina and New Zealand, as the growers are seeing lower than average intake.

The bulk markets continue to move at a brisk pace, however the first month of the second quarter showed slightly less activity than the very fast paced first three months of the year. Prices continue to show strength, but it appears that we are experiencing a plateau in many markets and buyers are now pushing back on some of the recent price increases.

The U.S. market has been a strong source of demand for many wine companies throughout the world, but recent reports indicate that there is growing resistance to price increases in the retail market. While supply relief may be some time away, nursery sales indicate that California growers are working to catch up with demand.

The London Wine Trade Fair is only weeks away, Ciatti will once again have a stand, and we will be bringing new samples from the 2012 Southern Hemisphere harvest. Please come by and see the quality of the new wines.

For the full Ciatti Company – Global Market Update, click here.

For the full Ciatti Company – Pricing Grid, click here.

April is here, and as spring in the Northern Hemisphere begins, we realize that we have already experienced a very active 2012 market. First quarter activity hit a three month high in March as the

Prowein show in Germany proved to be as eventful as expected. Buyers and sellers did not hold much back in the first months of 2012, with early commitments being made in markets across the globe. With demand numbers remaining high in the United States, many feel that strong sales will continue into the foreseeable future.

The Southern Hemisphere harvests continue, and the supply picture is slowly coming into focus. It appears that Chile and South Africa will both have good to slightly larger than average crops, and that most regions of Australia have escaped a difficult summer weather season. Argentina and New Zealand both look to be down on volume this year, but quality reports are good across the board.

The producers in the Northern Hemisphere are moving through their 2011 stock, with some interesting opportunities now presenting themselves, especially in the French market. Wine in most northern countries remains available, but pricing seems to be causing slightly lower levels of activity. California continues to be very tight on supply, and the 2012 harvest can’t come soon enough for most players in that market.

For the full Ciatti Company Global Market Update, click here.

For the full Ciatti Company Pricing Grid, click here.

The harvests in the Southern Hemisphere are moving into full swing. Chile, South Africa and Australia all look to be having normal sized harvests, while growers in Argentina now expect numbers to be down significantly from last year. It is still early in the harvest season, but buyers have been actively searching for 2012 offers, and many will commit early.

For the full Ciatti Company – Global Market Update, click here.

For the full Ciatti Company – Pricing Grid, click here.

Ciatti Company shares observations about the preliminary California Grape Crush Report specific to the North Coast, Central Coast, and Central Valley. See more here.

The Preliminary California Grape Crush Report released today shows the total crop of winegrapes harvested in 2011 was 3.34 million tons, down 7% from 2010. Total tons of all grapes crush was 3.87, down 5% from 2010.

“The California Bulk Wine and Grape Market has tightened extremely quickly over the last 6-12 months. Driven by the fact that 2011 harvest was down 7%, the second below average crop in succession, and healthy sales of wines with consumer friendly pricing and taste.”

- Glenn Proctor, Broker/Partner, Ciatti Company

"Based on the lower than normal California Winegrape harvest in 2011, international supply will be looked at with great interest as their harvests progress. February marks the beginning of the Southern Hemisphere¹s harvest. This supply could provide options to the short California harvest.”

- Steve Dorfman, Broker/Partner, Ciatti Company

“Thompson seedless grapes crushed in 2011 were at historically high pricing and Grape Juice concentrate domestically has continued to remain at very high price levels. While there are still small quantities of concentrate available in the states, the pricing remains very firm. “

- Greg Magill, Broker, Ciatti Company

“Overall production in the Northern Interior was down compared to last year which was one of the lightest crops in 3 years. The Clarksburg/Delta was up slightly while the Lodi region was down overall almost 6% giving that region its second light year in a row with some varieties such as Zinfandel down a staggering 25%. The Southern Interior showed an overall decrease from 2010. Demand for grapes in all Interior regions remains strong with spot market grape prices reaching their highest price in over 10 years. Planting activity is also the strongest it's been in a decade despite the lack of supply of planting material and the competition to plant other crops. No matter the size of the overall crop in the Southern and Northern Interior, it wasn't going to be enough to fuel the current demand.”

- Johnny Leonardo, Broker, Ciatti Company

"The greater Central Coast saw a surge of buying activity late in the 2011 harvest. This activity has not been seen in the Central Coast since the 2008 vintage. With the overall crop down 26% in the Central Coast buyers are making a concentrated effort to purchase fruit early. Cabernet Sauvignon and Pinot Noir look to be the hottest grapes on the market with Chardonnay a close second.”

- Todd Azevedo, Broker, Ciatti Company

“The North Coast grape harvest (Napa, Sonoma, Mendocino, and Lake Counties) turned out to be one of the smallest harvests since 2008 and 2004. Crop levels were down by 13% overall and harvest dates were typically 2 to 4 weeks delayed. This was a culmination of unseasonable weather: rains during May-June bloom season, cool summer temperatures, and unforgiving early October rains. The smaller crop size and delayed ripening made for a challenging year for both growers and wineries and calls for brix enhancing concentrate and alcohol were common during the crush season. Brix and alcohol levels may have been down, but the longer ripening season gave resulting wines full flavor and colors. Spot market grape pricing and bulk wine pricing continues to be volatile as buyers continue to secure inventory. “

- John White, Broker/Partner, Ciatti Company

“Regardless of these numbers presented today; the real story is the demand that we see in today’s grape and bulk (wine) markets. We need large production and or more vines planted to sustain our current growth levels.”

- John Ciatti, Broker/Partner, Ciatti Company

Please call Glenn Proctor or John Ciatti at the Ciatti Company 415-458-5150 for further discussion, and insight.

The Ciatti Company is the world’s largest and most comprehensive bulk wine and grape brokerage. Aside from its home base in San Rafael, California, seven offices around the world provide clients the kind of information and intelligence that today’s competitive global wine industry demands.

The company, founded in 1972, has deep roots in the wine industry, both in California and the countries in which the company operates. The current partnership includes industry professionals with over 135 years of collective experience including: John Ciatti, Greg Livengood, Glenn Proctor, John White, Chris Welch and Steve Dorfman.

Contact: 415 458 5150
Lora Parnell lora@ciatti.com
Glenn Proctor Broker/Partner glenn@ciatti.com
John Ciatti Broker/Partner john@ciatti.com

The Shelves are Bare: Many bulk suppliers have less wine in tank due to the light 2011 harvest, and as a result there are fewer bulk lots for sale compared to years past. The most apparent needs are for affordable wines and grapes to be funneled into value-priced brands. Wineries are forced to explore new supply relationships by sourcing wine and grapes from different appellations.

Sticker Shock: The other reality is the new pricing for those wines and grapes that have hit the market. Initial offerings are substantially higher than last years, causing issues with profitability and ultimately sustainability. One would expect a need for some form of price increase at the wholesale and ultimately consumer level in the near future.

Visit: www.ciatti.com for more information.

Harvest finally ended well into November with Central Coast Reds and the last of the interior-located Rubireds being crushed. North Coast wineries might have salvaged the harvest with a lot of hard work; only time and tasting will tell.

California – Buyers are looking to secure longer term contracts to protect against shortages. Most European buyers will not pay this year’s higher prices and most California suppliers believe that the market is going into a short position for the next few years. The bottom line is there are not enough grapes in the ground to cover demand.

Washington – Nothing should be bought before samples have been approved. The harvest came very late due to cold weather, and when the wine came in, storage and fermentation space were in limited supply. Botrytis,mildew, rot and low brix (<20°) were all problems throughout this year’s harvest.

Oregon - A long cool spring and a cool late summer gave way to measured temperature increases at exactly the right time prior to harvest 2011. This saved what could have been a challenging vintage for Oregon growers. The previous year’s non-bearing acres are starting to come on line and the volumes of bulk wines already available from this vintage reflect an increase in yielding acreage.

As the Northern Hemisphere producers finish their 2011 harvest, it appears that supply will be put under pressure.  TheCaliforniacrop is by all accounts the lowest it has been in the past three years.  Estimates range anywhere from 9% to 20% down, with the premium areas being hit the hardest. ItalyandSpainare also reporting lower than average harvests, which will likely push buyers into different supply directions. Francelooks to be the one major supply country with a bountiful harvest, and theLanguedocregion looks to be especially healthy.  As Spanish and Italian prices move upward, we expect the French product to look much more attractive to beleaguered bulk wine buyers.

It is still early to predict harvest sizes for the major producers of the Southern Hemisphere, but we are nearing the end of the frost season in some of those markets and hopes remain high for large crops in those markets.  We should have a much clearer picture of size and quality of the Southern Hemisphere crop by the end of November.

Buyers have been busy over the past month, with large volumes of bulk moving out of several markets. Chileexperienced heavy volume activity, with prices stabilizing after a short period of decline.  Activity inArgentinahas escalated as buyers search for deals on generic white wine.  Overall the bulk market remains strong, with stable pricing, and healthy competition for available inventory.

Currency exchange and wet weather conditions are the hot topics for October. With the
economic issues in Europe causing a relative weakness in the Euro, and mining
commodity prices showing signs of softening, the U.S. dollar has sprung back to life.
With the dollar realizing new strength against the Euro, Chilean Peso, Australian dollar,
and South African Rand, bulk wine import opportunities for U.S. buyers are beginning to
materialize.
The harvest in California continues to be troublesome, as rain storms hit most growing
regions throughout the first two weeks of October. Reports out of the San Joaquin
Valley continue to suggest a light crop, with numerous varietals coming under intense
demand pressure. Many international buyers are attempting to secure their California
bulk wine now, as it looks likely that reasonable spot deals will be difficult to find in the
coming months. We continue to see light harvest estimates in Italy, and some weather
related disease problems in Spain, but the Languedoc crop still looks strong. Given the
expected large crop, Languedoc could see renewed interest from buyers in the coming
months.
The Southern Hemisphere continues to offer deals for international buyers, as Chilean
both Generic and Varietal Reds are now priced at levels not seen in the past eighteen
months. Inventory is available, and we have samples moving. The pass has cleared in
the Andes, and Argentine wines are again on the move. Generic White seems to be the
current Argentine play, with quality and pricing attractive on the world market. South
Africa pushes forward with some very interesting offers, as the Rand has lost significant
value over the past few weeks.

September 12, 2011 - The first week of crush for the GJC market (Thompson’s and naturals) is turning out an average and even a slightly above average crop. Demand is still outpacing supply due to pressure from raisin processors, juice beverage companies, and significant, sustained winery demand. Concerns still remain over the lack of sugar this late in the season: current reports indicate Brix levels between 18-19 Brix, about a week to 10 days behind the normal 20-22 Brix sugar level expected for this time of year. This is causing some concern for raisin farmers who need to cut or lay down their crops before the mid-September crop insurance deadline. There are still a lot of raisin farmers undecided about whether to go green or gamble for the $1700 per ton prices floated by the CA raisin industry. Expect to see movement one way or another very shortly.

California’s 2011 Grape Harvest begins, all be it weeks later than normal. Pre-harvest estimates remain below normal for most varieties and regions. Look for total volumes to be well below both 2009 and 2010 levels. This comes at a time when another bumper crop would have been welcomed.

Both Cabernet Sauvignon and Zinfandel vineyards around California seem to have been greatly affected by the spring weather, only exasperating already tight pricing and availabilities. Recent weather patterns have growers hoping for more berry sizing and sugar development. Mildew pressure is evident across the state and more detailed crop estimates will be available next month.

As we move into September, the bulk market remains very active, with some signs of change on the horizon. After experiencing many months of a very tight market in Chile, we are now starting to see some movement on pricing in a downward direction. As previously reported, a stronger than expected crop was realized in Chile, and we are now seeing ample volume of red wine hit the market, with pricing that looks to be at a lower level than we have seen in some time.

Bulk wine seems to be available across the Southern Hemisphere, with Australia, Argentina, and even New Zealand showing offers of several varietals. South Africa, which has been in extremely tight supply over the past two years, now seems to be moving back towards a balanced position, with many new offers in the market. After a better than expected southern hemisphere harvest, it now looks like France, particularly the Languedoc region, is going to have a very large crop and white wine prices seem to be reflecting this larger supply. Italy, Spain and the United States (California) are all predicting crops at lower levels than last year, with California showing strong price increases year over year.

Most markets are holding price on the bulk market at this time, but we expect to see some good value opportunities, based on what we are seeing in Chile, and what we expect to see out of the Languedoc. Buyers need to search for the great deals, but we are starting to see them in some markets, and we expect more to be forthcoming.

     The global bulk wine market continues to show signs of strength.  The buying activity has remained active, and prices have held firm.  Reports are in from the Southern Hemisphere, and it appears that most supply countries have had a bountiful harvest. Argentina and Chile both showed very solid crop volumes, with Argentina looking to have had a good quality year. The big surprise comes from Chile, where a much larger than expected crop was harvested.  While prices have not fallen dramatically in Chile, it does feel that there may be some downward pricing pressure building.  Australia also experienced a good sized harvest, despite the previously reported weather issues.  Pricing seems to be holding steady in Australia, and it remains to be seen if some of the weather effected bulk wine will be accepted in the international market.  New Zealand also reports a large harvest, and we expect to see ample supply of Sauvignon Blanc on the bulk market. South African growers are already looking ahead to the 2012 vintage, as a dry winter is seen as a cause for some concern.  With a weakening Rand, export opportunities, especially for white wine, are now increasing.

As Andy Grove, the founder of Intel said, "Leaders have to act more quickly today. The pressure comes much faster".

The supply stream on a global basis remains under increasing pressure. Around the world we are seeing bulk wine demand continue to outstrip supply. There is higher demand for most varietals on a countryby country basis, and pricing continues to be on the rise. The upward trend in pricing may now be moderateda bit by worsening economic conditions in many countries. Historically when we were in the lower end of thesupply cycle, bulk wine prices and subsequent grape prices rose faster than the consuming public was able toabsorb price increases on the shelf. It remains to be seen how consumer demand will be effected by the current production price increases.

Additionally, as a recent Rabobank report points out "the US dollar has been the worst performing currency in the G-10 in the year to date. Despite a huge amount of policy stimulus, US growth has remaineddisappointingly slow.” Rabobank does not expect the Federal Reserve to raise interest rates before themiddle of next year, meaning it will be one of the last central banks to hike rates during the current cycle. “This prospect of record low interest rates for an extended period bodes poorly for the US dollar and is a central reason why the currency has been under pressure so far this year." The US is now the largest wine consuming nation, and 27% of the wine consumed in the U.S. is imported. Production cost increases, combined with lower buying power of the U.S. dollar, will be difficult to pass on to the consumer.

Despite these hurdles, we continue to see sales growth, and with leadership, diligence, and in some cases planting, we can work our way out of the current undersupply in the bulk market, back towards balance.

Argentina: International buyers actively seeking bulk wines & wine grape juice concentrate.
Australia: Crush figures much higher than expected, however quality consistency may be a challenge.
California: Strong buying activity for grapes and bulk wine, as well as increased sales for value-end labels and some higher-end wine programs.
Chile: Harvest has finished with projections of a light varietal crop, but a sizeable generic and table grape crop.
France: Strong interest continues for value brands and Bordeaux Grand Crus.
Germany: Some areas are still recovering from previous frost damage, those unaffected vineyards are showing a strong crop.
Italy: The Italian market continues to maintain the stability that has characterized the past few months.
South Africa: All 2011 wines are ready to be shipped, and early predictions of a light red varietal crop have materialized.
Spain: Due to strong demand, Spanish wines are now in short supply.

Posted in France.

Sales data shows continued volume growth within the US market. Larger, value-end labels show strong performance along with the continued rebound of many premium and higher-end wine programs. With little or no pricing relief expected at the retail level, producers have increased pressure on margins and profitability.

GRAPES
Buying activity remains brisk as more wineries seek supply for the upcoming season. Recent reports indicate historic prices for Thompson Seedless, a variety now competing with raisin buyers. This reflects winery demand for all grape varietals and the lack of constant supply. Thompsons, which previously went to concentrate or distillation, are now being fermented into still wine for blending.

WINE
Activity in the bulk wine market continues in all regions. Heavy reds, along with floral whites remain in good demand. Bulk Chardonnay activity has started as buyers look for opportunity purchases given a perceived lighter upcoming vintage.

The California market remains active for both wine and grapes. Driven by continued optimism and sales growth, wineries are aggressively sourcing future inventory requirements. These commitments come earlier than in past years and prior to firm indications of the upcoming 2011 crop level.

All premium red wines continue to sell at strong pricing levels. Both value and luxury wine programs have continued to drive this activity. Grape sales have continued in all regions of California. Concerns and the reality of the April frost on our Central Coast have fueled additional commitments around the state.

The mood among California grapegrowers took an optimistic turn at the 2011 Vineyard Economics Seminar, held May 10 at the Napa Valley Marriott in Napa, California. The event was organized by the Wine Symposium Group and co-sponsored by Vineyard & Winery Management magazine.

In the seminar's opening session, Glenn Proctor, partner at the grape brokerage firm Ciatti Co. LLC, gave a cautiously optimistic overview of the 2011 California grape market.

"We're starting to see some positive sales numbers," he noted, citing Silicon Valley Bank's "2011-2012 State of the Wine Industry Report," which forecasted 11%-15% growth in fine wine sales for 2011.

Gone are the gluts of previous years, he said, and wineries are once again looking to buy grapes. "Supply is no longer a dirty word," he said. The grape market is shifting from a buyer's market to a seller's market, and growers are now able to sell their fruit at sustainable prices. "It's a different market today."

Along with a different market, a new breed of grapegrower has emerged from the recession, Proctor said. This "New Grape Seller" has had to adapt in order to survive, and no longer relies on selling grapes as his only means of income. The new grower is a "price maker" instead of a "price taker," and is using more non-traditional methods - such as producing bulk wines and selling case goods - to sell his or her product.

In the Central Valley, nearly all fruit has been contracted. Grape pricing has increased over 2010, with asking prices rising for remaining supply. Red varieties and muscat sales are "extremely strong," Proctor said, with longer-term contracts being offered to growers.

The Coastal region has experienced a particularly difficult market in the last two years, but it is showing signs of improvement. "Strong early buying activity has focused on reds with improved pricing," Proctor told attendees. However, chardonnay grapes are still difficult to market.

In the Napa and Sonoma regions, there has been strong early activity on Napa Valley cabernet sauvignon, with the market driven by negotiant buyers and repositioned brands. The market is still difficult for chardonnay grapes. Sonoma buying activity has lagged a bit behind that of Napa, with buyers seeking out fruit from specific appellations and only buying at "the right price."

Spot market grape pricing has shown improvement across the state. For example, per-ton prices for Napa Valley chardonnay have increased from $700-$1,300 in 2010 to $1,300-$2,000 in 2011. Central Coast pinot noir prices rose from $750-$1,300 in 2010 to $1,300-$2,200 in 2011. Napa cabernet sauvignon prices increased from $1,000-$2,800 in 2010 to $2,400-$4,000 in 2011.

In an overview of the bulk market, Proctor reported that the market for reds is tight, while the market for whites is getting better. Napa cabernet sauvignon and merlot are in high demand, with buyers moving early to 2010 reds. Overall, bulk market pricing has improved during the last year.

A look at the latest California grape acreage figures showed that non-bearing vines account for just 4% of the state's total acreage - down from an average figure of 10%. That begs the question of what should be replanted, and where.

"The industry right now has to make some decisions about what we want to be," Proctor said. "If we don't replant in an increasing demand market, we will continue to lose market share. (Buyers) will replace us."

To avoid that scenario, growers need to prepare and position themselves for a sustainable and successful future. "Profitability is potentially around the corner, Proctor said. "It might actually be worth being a grapegrower again."

To see more details and the complete presentation, please click this link to download Ciatti's 2011 Vineyard Economics Seminar Report.

As the first quarter of 2011 comes to a close, we are now watching to see if the current market trends are going to slow, or alternatively, gather momentum. Currently, global wine prices are on the rise and inventory levels continue to push in a downward direction.  Even though economic issues and challenges remain, demand has continued to strengthen in the major consuming markets; leading us to believe that larger harvests by specific countries will not stop the overall tightening of the global marketplace. There are still some issues with certain varieties and in certain areas, but the strength of the market is causing improvement on a global scale. As harvest continues throughout the southern hemisphere, weather continues to negatively influence crop size and in some places quality, which could further strengthen the market.

Wine sales have continued to grow, despite global recessionary conditions, and as we have limited New World production, this demand growth is putting pressure on that production. As global bulk price increases continue, the question remains whether the consumer will be willing to accept price increases on the shelf or will coming bottle price increases negatively affect overall consumption growth? This will be the most important question to answer as the market recovery continues and we try to understand the long term trends.

The Wine Industry appears to be well positioned for growth and while

Argentina: The delayed harvest is finally underway and looks to be larger than the previous few years. The trend of higher demand for red grapes and bulk wine over white varietals is expected to continue. 

Australia: Further rain has caused a large increase in disease pressure, wineries are now looking to harvest as many grapes as possible before disease becomes too prevalent.

California: Bulk wine demand from the San Joaquin Valley continues to outpace supply, causing further upward pressure on pricing, led by Cabernet Sauvignon and Zinfandel. The North Coast has seen an increase in demand for bulk wine, which has caused greater interest in grape contracts.

Chile: Several weeks into harvest, the white grape crop is coming in below average, while the red crop remains unknown. After a slow start, the bulk wine market is seeing renewed levels of activity.

France: Small lots of Cabernet Sauvignon and Merlot are back on the market but are quickly being purchased by the large suppliers. Sauvignon Blanc remains in oversupply and producers are interested in long term contracts.

Germany: The market has stabilized on higher prices and there are no longer any large lots of wine available. Southern Hemisphere wines continue to be in high demand.

Italy: The Italian bulk wine market has stabilized with Pinot Grigio showing the most activity. South Africa: Warmer temperatures have lowered the harvest volume, however quality remains strong. Almost all 2010 wine has been contracted or is no longer available.

Spain: There is very little Generic Red wine available, however some Generic White remains available. In terms of quality and price, Spain continues to be one of the more competitive countries.

California’s total grape acreage has fallen to its lowest level in 13 years, and that is good news for surviving grape growers.

According to the California field office of the USDA’s National Agricultural Statistics Service (NASS), there were a total of 842,000 acres of all grapes standing in the state; 50,000 were non-bearing.

That is the lowest non-bearing acreage since 1993.

The 2010 acreage represents a loss of 113,000 acres of grapevines compared to the 955,000 acres standing in 2000. That included 128,000 non-bearing that year.

Low grape prices, especially for raisin and wine grapes, are responsible for this decline. A huge crop in the middle of a downturn is another factor. Wine grape market uncertainty, as well as more attractive crops like almonds, pistachios, pomegranates and others horticultural crops have taken a big roll on California grape acreage. More than 100,000 acres of vines have been bulldozed in the San Joaquin Valley over the past decade and replaced by other crops. Most of that was Thompson seedless.

The wine-type grape acreage for 2010 is estimated at 535,000 acres by NASS.  Of the total acres, 497,000 were bearing and 38,000 were non-bearing. Table grape acreage totaled 94,000 acres with 9,000 non-bearing. Acreage of raisin-type grapes totaled 213,000 acres, of which 210,000 were bearing and 3,000 were non-bearing.

The leading wine-type varieties continued to be Chardonnay and Cabernet Sauvignon.  Flame Seedless was the leading table-type grape variety.

Thompson Seedless continued to be the leading raisin-type variety and was utilized for raisins, fresh market, concentrate, and wine.

The viticultural bloodbath may be over, at least for one season, as supplies seem to be in balance with winery demand. Raisin grape production finally reached equilibrium with demand last year, when for the first time in decades growers received 100 percent of an established field price at harvest. For many years, growers received only a percentage of the field price and the rest went into a surplus pool to be sold at discounted prices.

For wine grapes, prices have been largely less than the cost of production for several years. One reason is the importation of wine in bulk and bottle. That continues with one out of every three bottles of wine sold in the U.S. from foreign grown grapes. Many of these wines are imported by California wineries either as bottled products or bulk which is blended with California wine. Much of this bulk has come into the U.S. from countries with an oversupply. Two years ago so much Chardonnay was imported, it hung over the domestic Chardonnay market for at least two years and some say three seasons. Wineries are opting to buy cheap bulk wine overseas rather than buy it from California growers.

The U.S. recession since 2008 also has had a dramatic impact on wine sales, particularly premium wines. Restaurant wine sales plummeted. Wine drinkers gravitated to lower priced wines with fewer dollars available. As the economy turns around, these value wines continue to be popular since consumers have discovered they can buy good quality wine at bargain prices. Premium wine sales are coming back, but are still lagging behind the value priced wines.

Aggressive buying from wineries

The decline in inventories and increasing overall wine sales are translating to aggressive buying from wineries for 2010 wine grapes, especially for San Joaquin Valley wine grapes, according to Nat DiBuduo, president of Allied Grape Growers, the state’s largest wine grape marketing cooperative.

“Wineries are very active … much more active in March than the last 10 years,” DiBuduo said. There are reports of winery contracts being offered to plant new vineyards. However, it remains to be seen how many growers, burned by years of market malaise, will respond to offers.

“From Lodi south, demand is better for wine grapes, especially for red wine grapes,” he said. Prices are better than last year.

The premium wine grape area of the North Coast is only attracting “tire kickers” but no price offerings, he said. However, there are more inquiries now from wineries for wine grapes from Mendocino and Lake counties than there were for grapes from the same area at harvest time last year.

DiBuduo did not have details on the Central Coast market, but there are reports of stronger demand there. However, the president of Allied said the Central Valley will recover economically faster than the coastal wine grape producing areas.

“I am bullish about wine grape prices this year after being down for so many years. We should be having a good year,” he said.

A huge 2010 crop could derail DiBuduo’s optimism. “We had a large crop last year, yet so far we are still seeing interest from wineries for grapes this year,” he added.

Growers in some areas are expecting a smaller crop in 2010 because weather conditions last year during fruit bud differentiation for 2010 fruiting buds were not ideal.

However, it is “still too early — we are barely at bud break” this season to make a firm prediction about less fruitful vines this year, said DiBuduo.

DiBuduo bemoaned the fact that continued pressure from imports could take the shine off the 2010 crop. According to the Gomberg-Fredrikson Report, bulk imports are down, but there are  more bottled imports coming into the U.S, often imported by California wineries.

“You have to be aware of the total global market — not just bulk wine but bottled wine as well — to understand this local California market,” he added.

“The signs are for a good year. I just hope there is no rain on our parade. Right now at least there is a little more light coming out of the end of the tunnel,” he added.