Ciatti California Report - December 2024

The wine industry continues to undergo its painful reset

This month we introduce our bulk/grape market activity barometer and it shows the markets continuing to proceed slowly. Many wineries currently appear to have a strategy of holding off from buying bulk wine or contracting grapes, whether that be for financial reasons or lack of visibility on retailer/distributor depletions during the important OND sales period and into the new year. Their aim is to weather the higher-cost, lower-sales environment as best they can and reach the 2025 vintage in a more balanced inventory position, by which time it is hoped retail sales declines will have levelled out.

We have downwardly revised our 2024 harvest estimate from 3.2-3.3 million tons to 3.1-3.2 million, as we suspect some late picking – into mid-November in some areas – was more than offset by the detrimental effects of October’s unseasonably intense heat. Many growers are now preparing for another year in which tough decisions will need to be made regarding the extent of financial outlays on farming and even whether or not to remove vineyards altogether. If the grape market continues at its present rate, uncontracted fruit could represent a higher percentage of the total available crop in 2025 than we have seen for a number of years.

Growers are invited to inform us now of what grapes they may have available next year, to assist us in finding buyers when they do come onto the market: Please contact Molly at +1 415 630 2416 or molly@ciatti.com. Potential buyers of grapes trying to get a feel for potential availability in 2025 should also reach out to us.

Bulk wine demand, meanwhile, remains incremental: Inquiries greatly outnumber transactions, the transactions that do occur are often for limited volumes on a just-in-time-basis, and price expectations appear to be at California-appellation levels on all but a handful of cachet Coastal wines. This month’s report details which wines have been receiving interest.

Many buyers are currently unsure of their financial footing, acutely sensitive to the risk of being oversupplied, and struggling to read what retail sales – and retailer/distributor demand – will look like in 2025. Ultimately, with the state’s bulk wine inventory as large as it currently is – our updated chart shows it to be significantly larger in December 2024 compared to December 2023 – buyers believe they can acquire the wines they need, in the volumes they need, when they need it.

Bulk wine suppliers are urged to list their wines with us and provide samples, so we are ready to harness buyer interest quickly when it does arise. Suppliers can contact either Mark at +1 415 630 2548 / mark@ciatti.com or Michael at +1 415 630 2541 / michael@ciatti.com.

Read on for the latest vineyard news, deep-dives into the grape and bulk markets, inventory charts by total volume and by varietal, our all-new market activity barometer, and Saxco beverage packaging update. If you would like to access this content but are not yet a paid subscriber, do consider becoming one: You can check out our subscription plans by clicking below.

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Ciatti’s broker team – possessing over 130 years of collective wine industry experience – is on hand to help buyers and sellers navigate the current challenges. Head office and individual brokers’ contact details can be found by hitting the button below. In the meantime, the whole team would like to wish you and yours a very Happy Holidays and a prosperous New Year!

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