1. Quality, Integrity, Stability

2. Association Report Changing with the Times
Investments in staffing/regional development
Changes in AGG member profile
Work with members regarding sustainability
Expansion of customer base
Negotiate planting contracts

3. Association Report
Continued involvement in, and contribution to, numerous boards, committees and task forces

4. Consider a Donation: Allied Grape Growers – Bob McInturf Endowment
Contact Ag One today! (559)

5. Bringing winegrape supply data to the industry…
Association Report
Bringing winegrape supply data to the industry…

6. Winegrape Market Review
Central Interior
Northern Interior
Central Coast
North Coast

8. A few points to make about winegrape production:
World winegrape production is mostly flat

9. Worldwide Wine Production
Chart Source: OIV

10. A few points to make about winegrape production:
World winegrape production is mostly flat
California production is forecasted to be flat in the near future

11. Our Production Potential

12. The ongoing challenge is to understand
The wine world is a large, diverse place with competition from many different countries, regions and appellations, none of which really have a specifically dominant position.
The ongoing challenge is to understand
your position in this big picture, and more importantly, position yourself for success.

13. Fungibility
“Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are capable of being substituted in place of one another.”
-Source: Wikipedia-

14. Our forecast for 2017 is +/-15,000 new acres.
Planting Trends
Our forecast for 2017 is +/-15,000 new acres.

16. Planting Trends, 2014-2016 2016 – 15 million vines
Cabernet Sauvignon - 35%
Chardonnay – 16%
Pinot Noir – 16%
Pinot Grigio – 7%
2015 – 19 million vines
Cabernet Sauvignon - 31%
Pinot Grigio – 17%
Pinot Noir – 15%
Chardonnay – 13%
2014 – 27 million vines
Cabernet Sauvignon - 29%
Chardonnay – 17%
Pinot Noir – 12%
Pinot Grigio – 12%

17. Tying Regions to Categories
<$7/Bottle
Interior - south of Lodi
$7-10/Bottle
Interior – Lodi/Delta and north
$10-20/Bottle
Coastal (standard)
>$20/Bottle
Coastal Premium (primarily Napa & Sonoma)

18. Tying Regions to Categories

22. Production Breakdown

23. Macro Supply Trends Going Forward

24. Evolving California Acreage Base
Compare these net gains/losses in acreage to wine shipment growth rates by category

25. Behavior Catalyst ...so what is driving the wine business today?
Premiumization empowered by the economy
Behavior
Catalyst

26. Keeping California’s Wine Industry Great
Quality is a prerequisite of fungibility. Without it, you are stuck in a rut!
Labor and water issues are critical going forward and play a direct role in the success of the wine industry.
The collaboration of growers & wineries through regional and statewide organizations provides synergies for advancement and opportunity.
Research, Research, Research
Sustainability and related certifications are a must-do as we continue to differentiate California wine in the market.

27. Sustainable Winegrowing
SWP Overview
What is Sustainability?
The Sweet Spot
Sustainable Winegrowing
Just a quick overview of the way we think about sustainability – it is about balancing the 3 Es of sustainability (which you have probably heard of before) or the environmental, economics and social equity (or the people aspect including neighbors and community and employees). The goal is to consider all of these things when you are making decisions in the vineyard or winery.

28. Industry Commitment International Programs
Sustainability Drivers
Industry Commitment
International Programs
Australia
New Zealand
South Africa
Chile
Italy
California & Regional Programs
Oregon
Washington
New York

29. Industry Update
CAWG recently secured $5,000,000 for the PD/GWSS program.
SGMA is nothing to be ignored – be aware of what’s coming.
Food Safety Act: What are requirements? For who & when?
CAWG working with FDA for exemption for winegrapes.
We need to be aware of SB 623 (Monning) - “Safe & Affordable Drinking Water Fund”.
Opposition to SB 252 (Dodd) - Proposed limit on any new ground water pumping
Cap & Trade Reauthorization Bill
AB 1420 (Aguiar-Curry) - North Coast Irrigation Ponds
AB 1513 litigation update – Nisei Farmer’s League Appeal
Numerous labor bills related ICE raids, access, I-9 forms, audits and notifications to the Labor Commissioner
It’s important to contribute to PAC’s to help defend ourselves

30. Industry Update There are threats to our continued success
Available & skilled labor supply
Bulk & bottled imported wines
Regulations via bureaucratic decisions
Unfriendly state business legislation
But the overall wine industry remains strong & successful in California and domestically.
California wine shipments continue to expand.
The US remains the #1 wine consuming nation.
Consumers continue to spend more on wine.

31. Thank you from all of us….
Questions?
Thank you from all of us….
The AGG Team, 2017