Ciatti Company Comments On Near-record California Grape Crush

(San Rafael, Calif.) – The California Department of Food and Agriculture released their Preliminary Grape Crush Report today and grape growers and wineries were able to see that 2009 was substantially larger than expected and will go down as the second biggest crop in California history.

Preliminary numbers show that California wineries crushed 3.696 million tons of grapes in 2009, a very large year that was up more than 682,000 tons (20.8%) over the light 2008 and close to the record 2005 harvest.

“We knew it was big, but we did not think it was this big. The value end of our business remains strong and growing and a larger vintage was needed – but given the size of this vintage we may see some weakness in demand even in that growing segment. This crop will put additional pressure on the already struggling premium segment of the wine business”, said John Ciatti, partner in the world’s largest grape and wine brokerage, the Ciatti Company. “this shows California’s current acreages can produce in a perfect year. This gives the wine industry the opportunity to fuel growth in many of the growing segments and to potentially limit some of the import competition that has been brought in because of shortages or lower pricing.”

Glenn Proctor, partner at the Ciatti Company adds “Prices overall for wine grapes for 2009 were down 8%. Many factors went into this pricing decrease – economy, struggling premium wine segment, and larger crop were all factors. Over the last few years – wineries have been shortening their contract commitments and this forced more growers to sell their grapes in the spot market – thus being more subject to market pricing fluctuations.

Ciatti and his partners noted a few numbers in the report of particular interest:

CHARDONNAY: Large crop in all areas of the state will continue to put pressure on all segments of the market. We expect to see continued weakness in Chardonnay going into the 2010 harvest

CABERNET SAUVIGNON: Yields back up to more normal levels. Continued growing wine consumption for Cabernet Sauvignon should be able to fully utilize the 2009 Cabernet Sauvignon crop, and also fill shortages left by the light 08 vintage.

MERLOT: Much like Cabernet Sauvignon it also rebounded to more normal levels. Merlot demand has continued to grow at the value level, we should be in a balanced position on a statewide level. There will still be issues in the higher priced tiers of this variety.

PINOT NOIR: Up a staggering 48%, this is a product of many of the new plantings in the Coast and Central Valley coming on-line. The super-premium segment of the market continues to face a reality check, but much of this new production will be needed for continued growth of value California Pinot Noir.

PINOT GRIGIO: 2009 demonstrated that many of the recent new plantings especially in the valley have come into full production. Pinot Grigio is now our second largest produced white variety in the state.

Please call John Ciatti or Glenn Proctor at the Ciatti Company 415-458-5150 anytime after 1PM today, Wednesday February 10th for discussion and comment.