July and early August brought more normal summer temperatures to California following the unseasonably cool, wet spring and start to summer. However, the impact of the prior coolness and wetness is still being felt through the ongoing lag in vineyard development – running between 2-4 weeks behind a normal timetable depending on area – and the level of mildew pressure, which is high across the state.
Growers – alert to the slow case-good sales environment and the resulting softness in grape demand – are this year being especially mindful of the quality standards set out in grape contracts. They have been battling hard to keep mildew under control, at times encountering difficulties in sourcing product – potentially a symptom of understocking across the state following a number of years without significant mildew pressure. In addition to mildew, some shatter and smaller berries have been reported in some areas.
In terms of timing, it is a year hard to generalize. The Coastal growing areas seem to be running 3-4 weeks behind normal, the Interior’s are perhaps closer to two weeks, with the southern Valley the least behind. But diving down into any one area, we often see neighbouring vineyards at quite different stages of maturity. What unifies all growers, however, is concern about the lateness, an eagerness to identify veraison as soon as possible, and fears for September weather amid forecasts of weather patterns – to quote viticulture climatologist Gregory V. Jones – “in flux” as El Niño conditions strengthen. Knowing that the time has passed when a prolonged heat spell might spur the ripening curve forward to a normal timetable, growers have been moving in to thin the crop – sometimes with grapes still green – in a bid to push things along.
As the timetable is delayed, and veraison is only starting to occur on the Coast, we remain unable to quote a guesstimate of the 2023 crop size. Nothing we have seen so far suggests that the crop will be significantly shorter than “normal”, which – if the “normal” is the five-year average – is now 3.7 million tons. But there still remains plenty of time for Mother Nature to intervene.
The picture on case-good sales continues to look worrying, with DTC sales – according to Sovos/WineBusiness Analytics data, down 7% in volume and 2% in value in January-June versus the first six months of 2022 – now joining the on- and off-premise channels in seeing contracting sales. For a long time, growth in dollar sales could be relied upon to offset shrinking volumes, but – as premiumization has become squeezed by consumer belt-tightening – both value and volume now appear in retreat. In this context, the bulk wine and grape markets continue sluggishly, sellers are becoming less bullish every month that passes, and reduced pricing does not necessarily stimulate activity.
For the very latest and most detailed picture on pricing, knowledge which would enable you to make the best-informed decisions in the present lowvisibility environment, don’t hesitate to get in touch with us directly – there are opportunities to be had for buyers and sellers alike in this market, and we can pair them up. In the meantime, read on for our latest analysis.