Ciatti California Report - June 2024
A good time to harness some eye-catching bulk wine opportunities
Perfectly normal temperatures and precipitation levels for the time of year have allowed the growing cycle across California to adhere to a traditional timetable, if not move slightly ahead. Intermittent 90-100°F heat spells, post-bloom, have also helped ensure no lag; to varying extents, all areas are well ahead of last year’s delayed timing, for example by as much as three weeks in some areas of the Central Coast.
Vineyards appear lush, with plenty of canopy growth, given conducive soil moisture levels following the relatively wet winter. Berry sizing is underway and some lighter cluster numbers appear to be offset by larger cluster sizes. Looking ahead, viticultural climatologist Gregory V. Jones is forecasting few dramas: A slightly warmer than average June-August and an equal chance of slightly above or below average precipitation levels. There is still some way to go, but the crop potential currently looks healthy.
The final tonnage figure is likely to fall short of the crop potential as a percentage of grapes will go unpicked. There are more vineyards out of contract now than there were 12 months ago. Transactions on 2024 grapes have remained sluggish, although inquiries have risen in recent weeks. The activity that does occur is mainly confined to supply adjustments/extensions within pre-existing relationships. The grape market’s slowness has led to increased discussion about whether growers should crush their uncontracted fruit into bulk wine themselves; we address this issue later in the report.
The bulk market, meanwhile, felt more active in May versus the previous two months. Again, much of this activity was simply discussion, but there has been an uptick in spot market transactions – mainly incremental volumes for just-in-time needs. This uptick is potentially indicative of the respective price expectations of opportunistic buyers and motivated sellers moving into better alignment as another crop nears. Now is a good moment to harness some eye-catching bulk wine opportunities offering an excellent price-quality ratio: Prospective buyers are urged to get in touch with us to discover the newest opportunities. As BMO bank’s inaugural Wine Market Report recently said: “An abundance of affordable bulk wine and uncontracted vineyards offers opportunities for new brands and product innovation.”
Could this recent, limited increase in bulk wine and grape inquiries be symptomatic of the retailer/distributor destocking process nearing an end and the market bottoming-out? When and how that happens is yet to be seen, but we are seeing some companies changing their behavior.
This month our friends from Saxco return with their second bulletin on the market dynamics in the world of packaging, where there has been some big news. As we seek to extend and improve the California Report, we are open to suggestions from our readers: What subjects would you like the report to address? Don’t hesitate to let us know via your Ciatti broker or info@ciatti.com. In the meantime, read on for our latest assessments of the bulk wine and grape markets.
Click here for the full June 2024 California Report as a PDF.