Allied Grape Growers, 2016. All rights reserved. Unified Wine & Grape Symposium State of the Industry Thriving, Just Surviving or Somewhere in Between?

Slides:



Advertisements
Similar presentations
Allied Grape Growers, All rights reserved. Winegrape Supply and Market Outlook Jeff Bitter Allied Grape Growers May 7, 2014.
Advertisements

Grape Purchase Agreements: Why A Handshake Still Matters Wine Industry Forum, August 23, 2013 Carol Kingery Ritter Dickenson, Peatman & Fogarty 1455 First.
Wine Grapes: An Alternative Crop for Churchill County Dr. Grant R. Cramer Department of Biochemistry University of Nevada, Reno.
Allied Grape Growers, All rights reserved. Unified Wine & Grape Symposium State of the Industry -Finding Equilibrium- Jeff Bitter Allied Grape Growers.
Allied Grape Growers, All rights reserved..
U.S. Wine Sector and Policy Issues Daniel Pick and Agnes Perez.
8 Steps to Better Marketing.  Founded in 1973  20 person team, 10 Brokers  Grapes & Wine in bulk  Strategic planning Turrentine Brokerage.
Trends in the California Wine Business Jeff Bitter Allied Grape Growers November 5, 2014.
Grape, Nut & Tree Fruit Expo State of the Wine & Concentrate Industry Nat DiBuduo President CEO Allied Grape Growers November 18, 2014.
LDGGA Grower Meeting Winegrape Market Update Nat DiBuduo Allied Grape Growers January 8, 2015.
Allied Grape Growers, All rights reserved. The 2014 Crush – What Happened to the Market? SJVWA Annual Meeting And Industry Forum Jeff Bitter, Allied.
9 February PINOT GRIS Hard to find and very little available on the spot market. ‘Tied’ deals emerging in the domestic market place, reflecting.
Discover the new look of Blackstone Winemaker’s Select.
Allied Grape Growers, All rights reserved. WiVi Central Coast 2014 State of the Winegrape Industry Nat DiBuduo Allied Grape Growers March 19, 2014.
California Energy Commission California’s Economic and Demographic Outlook Electricity and Natural Gas Model Inputs and Assumptions IEPR Lead Commissioner.
Pinot Grigio Cal Dennison Sr. Director Winemaking E&J Gallo Winery 1.
Allied Grape Growers, All rights reserved. Unified Wine & Grape Symposium State of the Industry Supply Side Analysis Nat DiBuduo Allied Grape Growers.
Brief Overview of Wine and Olive Industries Including some important connections BVL and OGAL 2008 Paul Miller.
Allied Grape Growers, All rights reserved. Mendocino Winegrowers 2015 Economic Summit Mendocino Grape Market: Understanding Trends and Utilizing.
Allied Grape Growers, All rights reserved. Clarksburg District Grape Day State of the Industry Jeff Bitter Allied Grape Growers March 3, 2015.
Central Calif. Winegrowers and Calif. Assoc. of Winegrape Growers 2007 Winegrape Symposium Today, Tomorrow and Beyond” “Today, Tomorrow and Beyond” November.
Central Calif. Winegrowers and Calif. Assoc. of Winegrape Growers 2006 Winegrape Symposium San Joaquin Valley Grapes “San Joaquin Valley Grapes = Quality.
Macro-trends in the California Wine Business Segmenting the wine business and identifying threats and opportunities. Jeff Bitter Allied Grape Growers October.
Allied Grape Growers, All rights reserved. Sonoma Grape Expo State of the Industry Jeff Bitter Allied Grape Growers November 13, 2015.
Vineyard Values and Trends: The Cycle Continues Vineyard Values and Trends: The Cycle Continues Central Valley Wine Growers Thursday, November 30, 2006.
Allied Grape Growers, All rights reserved. ASFMRA Outlook 2015 Agribusiness Conference Change in the Wine Business Jeff Bitter Allied Grape Growers.
Allied Grape Growers, All rights reserved. Malcolm Media’s Grape, Nut and Tree Fruit Expo State of the Wine & Concentrate Industry Nat DiBuduo Allied.
"Reasons why Winegrowers and Wineries Should Join their Respective Professional Associations" By Nick Frey Sonoma County Winegrape Commission.
SESSION SPONSORED BY: MARKET CONDITIONS FOR THE NORTH COAST WINEGRAPE INDUSTRY: What Wineries and Growers Can Expect in 2016.
Washington State Viticulture New York Wine Industry Workshop April 3-5, 2002.
Allied Grape Growers, All rights reserved. San Joaquin Valley Winegrowers Association Harvest 2015 &Future Opportunities Nat DiBuduo Allied Grape.
Update on Capital Markets, Values, and Investing Tony Correia, The Correia Company, California JANUARY 26, :30PM - 4:30PM.
Napa County Supervisors Rob McMillan, EVP and Founder, Wine Division Napa County Wine Business.
Introduction to Woodbridge by Robert Mondavi. Presentation Overview  History History  The Lodi Region The Lodi Region  Winemaker Todd Ziemann Winemaker.
Prof. Karen Goodlad, HMGT  An Extensive Array of Wine for the World to Enjoy  Ranges form jug wine to super premium  85% of all vineyards and.
Allied Grape Growers, All rights reserved. Appraisal Institute – Northern California Chapter 2016 Annual Spring Conference Wine and Raisin Industry.
Allied Grape Growers, All rights reserved. Livermore Valley Winegrowers Association Annual Grower Meeting Jeff Bitter Allied Grape Growers March.
Industry & SB Direct Sales Updates JUNE 23 RD 2016 ROB MCMILLAN, EVP & FOUNDER SILICON VALLEY BANK WINE DIVISION.
Top Red Varieties Cabernet Sauvignon Merlot Pinot Noir Zinfandel Cabernet Franc Top White Varieties Chardonnay Sauvignon Blanc The Diversity of Napa Valley.
WiVi Central Coast Conference and Trade Show Grape Acreage Trends Jeff Bitter Allied Grape Growers March 15, 2016.
Presented by Phillips Wine & Spirits
State of the Grapes Nat DiBuduo President CEO Allied Grape Growers.
How Current Grape Supply and Demand Affects You
2017 Lodi Wine & Vineyard Economics Survey
Grape, Nut and Tree Fruit Expo
Lodi’s Stake in the World of Wine
2017 Central Coast Insights Survey
Lodi’s Stake in the World of Wine
Lodi District Grape Growers Association Grower Educational Meeting
Quality, Integrity, Stability
Livermore Valley Winegrowers
How Current Grape Supply and Demand Affects You
Issues, Trends and Careers In the Wine Industry
Unified Wine & Grape Symposium State of the Industry
Central Coast Grape Expo
33rd Annual Grape Day State of the Industry Nat DiBuduo
American Vineyard Magazine’s Sonoma Grape Expo
American Vineyard Magazine’s Grape, Nut and Tree Fruit Expo
The Wine Is Fine According to the latest data (2016) from the Wine Institute, total wine sales, as measured in 9-liter cases, increased 4.2% to $59.5.
Annual Wine & Grape Industry Forum
Quality, Integrity, Stability
State of the Industry Jeff Bitter Allied Grape Growers
Building the Winegrape Supply Puzzle
DIGGING DEEPER An in-depth look at California winegrape supply:
Grower, Handler, and Shipper of California Almonds
(and a glimpse into the future)
Before the harvest – State of the Industry
Winegrapes & Concentrate
Market Update: More than a Year in Wines and Vines
Updates on the Grape and Bulk Wine Market
Presentation transcript:

Allied Grape Growers, All rights reserved. Unified Wine & Grape Symposium State of the Industry Thriving, Just Surviving or Somewhere in Between? Nat DiBuduo Allied Grape Growers January 27, 2016

Allied Grape Growers, All rights reserved. “It’s more interesting to talk about huge crops during excess or short crops during shortage, but a short crop in a time of ample supply just makes for a boring production story of “moving toward balance.”” -AGG’s Industry Update Newsletter, January 2016-

Allied Grape Growers, All rights reserved Crush…..

Allied Grape Growers, All rights reserved. Today’s presentation utilizes information obtained via Allied Grape Growers’ (AGG) annual Grapevine Nursery Survey combined with evaluation of numerous reports and data made available by the State of California. Wine shipment data is courtesy of the Gomberg Fredrikson Report. AGG’s internal operations data along with unquantified industry observations and anecdotal evidence was also used to draw conclusions.

Allied Grape Growers, All rights reserved. The Changing Five-Year Landscape 2010 vs. Now….. Supply/Production: Bearing acreage up 11% (now 555,000) Yield up 5% on average (7.25 TPA average) Competition: Wine imports up 15% (114m case average) Craft beer/Cider Demographics/Consumers: Less boomers, more millennials Premiumization Economics: Recession vs. Recovery Strength of US Dollar up 25%

Allied Grape Growers, All rights reserved. This changing landscape has/will affect different regions in different ways… Some positive Some negative

Allied Grape Growers, All rights reserved. Over the Hump….. Last Year, AGG predicted 20,000 acres would be planted.

Allied Grape Growers, All rights reserved. Over the Hump….. Our prediction for 2016 is 16,000 new acres.

Allied Grape Growers, All rights reserved. What’s Hot, What’s Not…. 65% Red 35% White

Allied Grape Growers, All rights reserved. Planting Trends, Cabernet Sauvignon - 31% Cabernet Sauvignon - 31% Pinot Grigio – 17% Pinot Grigio – 17% Pinot Noir – 15% Pinot Noir – 15% Chardonnay – 13% Chardonnay – 13% Cabernet Sauvignon - 29% Cabernet Sauvignon - 29% Chardonnay – 17% Chardonnay – 17% Pinot Grigio – 12% Pinot Grigio – 12% Pinot Noir – 12% Pinot Noir – 12% Cabernet Sauvignon - 29% Cabernet Sauvignon - 29% Chardonnay – 14% Chardonnay – 14% Pinot Noir – 13% Pinot Noir – 13% Zinfandel – 10% Zinfandel – 10%

Allied Grape Growers, All rights reserved. Categorical Review Trends, Issues, Threats & Opportunities

Allied Grape Growers, All rights reserved. Breaking it Down…. Value - (<$7/bottle) Interior (excluding Lodi/Delta) Mid - ($7-10/bottle) Lodi/Delta High - ($10-20/bottle) Coastal (standard) Luxury - (>$20/bottle) Coastal (Napa, Sonoma, etc.)

Allied Grape Growers, All rights reserved. Value Category Trends, Issues, Threats & Opportunities

Allied Grape Growers, All rights reserved. +/-21,000 winegrape acres removed between the 2014 and 2015 harvests. 20,000 acres pulled (+/- 10,000 winegrapes) since the 2015 harvest. Vineyard Removal…. (All interior, including Lodi) Removals will likely continue at the current pace thru Spring. Based on current shipment trends/grape buying activity, removals are necessary.

Allied Grape Growers, All rights reserved. “We estimate that – unless demand for <$10 wines recovers or the SJV captures a larger share of the growth of the $10-25 price segment – as much as 40,000 more acres will likely be removed in the coming three years as SJV production will have difficulty finding buyers.” -Stephen Rannekleiv, Rabobank’s Industry Note, July 2015-

Allied Grape Growers, All rights reserved. Source: OIV Wine Production vs. Consumption Worldwide (in Mhls) Used with Permission - Rob McMillan, Silicon Valley Bank

Allied Grape Growers, All rights reserved. Value Segment Trends, Issues, Threats, Opportunities Trends Declining demand/Acreage base revamp Issues Economic sustainability/Competing crops Threats Imports/Water policy Opportunities Differentiate & Premiumize (Quality)

Allied Grape Growers, All rights reserved. Varietal Trends, by Segment….. +25% Note: Change stated cumulatively Annual attrition rates estimated +26% -8% -15% +75% +6% +62% +1% California

Allied Grape Growers, All rights reserved. Mid Category Trends, Issues, Threats & Opportunities

Allied Grape Growers, All rights reserved. Mid Segment Trends, Issues, Threats, Opportunities Trends Improving visibility/recognition Issues Labor, return/cost imbalance Threats Surplus of inexpensive winegrapes in SJV Opportunities Provide value priced grapes for the high category

Allied Grape Growers, All rights reserved. Varietal Trends, by Segment….. +15% +39% -6% +1% +49% +3% +32% +2% Note: Change stated cumulatively Annual attrition rates estimated California

Allied Grape Growers, All rights reserved. High Category Trends, Issues, Threats & Opportunities

Allied Grape Growers, All rights reserved. High Segment Trends, Issues, Threats, Opportunities Trends Premiumization lands right in their back yard Issues Pricing pressure – related ability to provide value Threats Competing beverages/producers (both domestic and foreign) vying for same consumer Opportunities Mechanization

Allied Grape Growers, All rights reserved. Washington and Oregon - formidable competition? Domestic Competition….. Washington since 2005/2006: Acreage up by 66% Acreage up by 66% Number of wineries up by 130% Number of wineries up by 130% Wine volume up by 85% Wine volume up by 85% Net economic impact up by 55% Net economic impact up by 55% Oregon since the recession ( ): Acreage up by 18% Acreage up by 18% Number of wineries up by 45% Number of wineries up by 45% Volume up by 39% Volume up by 39% Net economic impact up by 28% Net economic impact up by 28%

Allied Grape Growers, All rights reserved. Varietal Trends, by Segment….. +32% +23% -2% +6% +23% +11% +16% +2% Note: Change stated cumulatively Annual attrition rates estimated California

Allied Grape Growers, All rights reserved. Luxury Category Trends, Issues, Threats & Opportunities

Allied Grape Growers, All rights reserved. Luxury Segment Trends, Issues, Threats, Opportunities Trends Differentiation Issues Limited opportunity for growth, scarce resources Threats Dependence on economy Opportunities Branding - AVA and associated brands

Allied Grape Growers, All rights reserved. Varietal Trends, by Segment….. +8% -4% 0% +9% +2% +4% +1% Note: Change stated cumulatively Annual attrition rates estimated California

Allied Grape Growers, All rights reserved. The Final Stretch….. Macro-trends

Allied Grape Growers, All rights reserved. Our Production Potential……

Allied Grape Growers, All rights reserved. Evolving California Acreage Base… Represents only 1.3% total growth annually

Allied Grape Growers, All rights reserved. Industry Elephants….. (from a grower’s perspective) Sustainability ……and Hangtime

Allied Grape Growers, All rights reserved. Final Thoughts/Highlights Premiumization is driving acreage base changes. Premiumization is driving acreage base changes. We aren’t pulling the fire alarm, we are being realistic about what needs to come out and why. We aren’t pulling the fire alarm, we are being realistic about what needs to come out and why. The momentum of the business appears to be such that we may revert back to a time of adding an appropriate amount of new acres annually. The momentum of the business appears to be such that we may revert back to a time of adding an appropriate amount of new acres annually. There has been, and always will be, opportunity for differentiation; marketing is key. There has been, and always will be, opportunity for differentiation; marketing is key. Overall, most segments of the wine business are sustainable, on all fronts. Overall, most segments of the wine business are sustainable, on all fronts.

Allied Grape Growers, All rights reserved. Our Information is Your Information Come see us at Booth 828 alliedgrapegrowers.org