Call for samples; tariff discussion; crop round-up
Following an October that exhibited summer-like heat spells – including daytime temperatures of 105-106°F and night-times in excess of 75°F – California’s 2024 harvest was essentially complete by November 1st. As well as contributing to a busy end-of-season picking period – and, in turn, some short-term capacity constraints at wineries – the heat is likely to have reduced the final crop size, especially of those (mainly red) varieties still hanging when it arrived.
The crop’s size remains extremely difficult to gauge, owing to the high number of variables: A patchy performance across the state this year, the late heat, uncontracted grapes potentially going unpicked, and vineyard abandonments or removals. In the North Coast, Napa and Sonoma tonnages were down from the average; Mendocino and Lake tonnages were more in line. Cabernet appeared to have suffered one of the larger shortfalls in the North Coast, with Napa and Alexander Valley Cabernet potentially coming in 20-30% lighter than expected.
The Central Coast’s crop was potentially 15-25% smaller than last year. The late heat caused some dehydration and – with processing capacity briefly limited – some weight was lost in the vineyards. The shortfalls appear to have come in greater on the reds and the further south the vines are situated: Paso Cabernet, for example, potentially saw shortfalls beyond 25%, while Chardonnay and Pinot Noir were generally lighter to a lesser extent. The Interior’s crop is expected to have been short of its average by at least 15-25% on the whites and 5-10% on the reds, although the shortfall of some reds – namely Cabernet – appears to be greater due to the heat. In addition, reds were likelier to be uncontracted and left unpicked.
Our state-wide crop guesstimate remains 3.2-3.3 million tons. Some of the discussion we hear is around the possibility of the crop being even smaller, perhaps below the 3-million-ton-mark. However, any extra shortfall caused by October’s heat may have been at least partially offset by fewer grapes being left on the vine, as growers reacted to demand from buyers seeking replacement volumes. Overall, grape quality was high. Harvest weather was conducive throughout and - until the late heat - maturation proceeded steadily, allowing for a straightforward succession of picking. Given October’s heat, some 2024-vintage wines are likely to be characterized by a riper style and fruit-forward notes.
It remains a painful time for the industry. Cashflow, essential for surviving until such time as supply and demand is back in balance, is hard to come by; with asset values having dropped, so too is financing. Consolidation and rightsizing are underway, indicative of financial pressure both in the industry and the wider economy. The coming year will be a telling one: Grape and bulk wine buyers may have reduced their demand in 2024 to offset lingering 2022/2023 bulk inventories – will 2025, as a consequence, mark a return to some market stability?
Ciatti’s broker team – possessing over 130 years of collective wine industry experience – is on hand to help buyers and sellers navigate this challenging time. Read on for the latest crop and market insights, and – for the most up-to-the-minute intel – don’t hesitate to get in touch directly.