California Winegrape Industry Soaring

California Winegrape Industry Soaring

The California winegrape industry is as strong as it has been in many years, and growers are enjoying strong prices across the board, says an industry leader. Nat DiBuduo, speaking at the annual meeting of the grower cooperative, Allied Grape Growers, could hardly contain his enthusiasm. “What a difference a year makes,” DiBuduo crowed during a luncheon at the Hilton Sonoma Wine Country Hotel in Santa Rosa. “We can not only see the light at the end of the tunnel, but in parts of California, we are out of the tunnel.”

The industry’s downturn in demand and prices due to an oversupply of grapes in the early 2000s has been balanced out by pulling excess vineyard acreage and bolstering sales. “We appear to be heading in the right direction for the California wine industry for both the vintners and the growers,” he said. “With wine sales up domestically, accompanied by strong exports, demand for California’s quality wines has much improved and is reaching exciting profitable levels for wineries and hopefully growers, as well.”

Of course, the 2011 growing season has been far from perfect, DiBuduo noted. Paso Robles sustained some serious frost damage, and North Coast growers are facing some smaller crops due to shatter and other weather-related issues. But that’s part of farming, said DiBuduo, a member of American/Western Fruit Grower’s editorial advisory board, a publication. “Mother Nature continues to trump all marketing efforts by having the final say on what tonnage and quality will be delivered by the end of harvest,” he said. “This year’s unusual spring weather has already delayed harvest and given us less than desirable conditions for the development of powdery mildew and associated disease and pest pressure.”

But that is minor in the grand scheme of things, said DiBuduo, noting that Allied growers this year are celebrating their 60th anniversary. Back in 1951, there were just 230 growers representing 50,000 tons. It was a very different organization, as it went on to own and operate numerous wineries and labels such as Italian Swiss Colony, which featured the ad campaign “That Little Ole Winemaker Me!” By 1987 the wineries were sold off, and it was truly a grower cooperative, which today represents 600 growers farming 31,000 acres.

Today they expect to produce 285,000 tons of grapes this year that should sell this year for more than $80 million. DiBuduo recalled that shortly after he took the reins in 2001, sales totalled just $34 million. “We never use the word, ‘glut,’ but we had a terrible oversupply,” he said. “Now the wine business in California is the place to be, and the buyers are buying — they’re not just out there kicking the tires.”

The oversupply problems of the past were particularly bad in the San Joaquin Valley, where DiBuduo noted growers of Thompson seedless, a versatile variety used for mainly raisins, but also fresh eating, concentrate, and as a blender for lower-cost wines, fetched just $65 a ton in 2001. “I felt like I was tearing a guy’s heart out and throwing it on the ground,” he said as recalled those frustrating times. “Sixty-five dollars wasn’t even covering the cost of production.”

This year growers are getting $250 a ton for Thompson seedless. “If that’s not a roller coaster ride,” he said, “I don’t know what is.” DiBuduo added that in part because of such sales, he expected to see something he’s never seen before: all grower-members south of Lodi to be sold out by the end of July. “It’s the first truly profitable — the best time — we’ve had since I’ve been here.”

As for variety and region specifics, DiBuduo said:

- Demand is good for red winegrapes, especially Cabernet Sauvignon, Petite Syrah, and Zinfandel, throughout California.

- Demand and pricing for generic varieties as blenders have given the San Joaquin Valley strong market prices. Also in the valley, there is new demand for some formerly White Zinfandel vineyards to be converted in “Sweet Red” programs.

- White varietals in the valley, such as Chardonnay and generic French Colombard, have also seen an increase in demand and prices.

- One emerging variety that is in very strong demand is Muscat Alexandria. This is made into a “Moscato-type” wine with a sweeter taste and floral bouquet that is proving quite popular.

- On the North Coast, demand is up, not quite to where it was in the 1990s, but buyers are again serious about buying. The stalwart varieties remain Cabernet Sauvignon, Pinot Noir, Zinfandel, and Chardonnay.

- As with the San Joaquin Valley, Allied leaders remain confident that all North Coast members’ grapes will be sold, and at better prices than in 2010 prior to the start of harvest.

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