1. DIGGING DEEPER An in-depth look at California winegrape supply:
Adjusting for the future…
Jeff Bitter
January 30, 2019

2. Theming the Presentation:
Stability (2018)
vs.
Adjustment (2019)

3. Noteworthy Don’t lose perspective…
Overall, the wine industry is very stable.
Inventory changes do manifest themselves
in spot markets (grapes and wine).
If you “reside” in these markets,
you will feel these changes more
than those who don’t.

4. DIGGING DEEPER Planting Trends/Future Supply 2019 Nursery Survey
Segment/Region Review
Things to Ponder & Noteworthy Points
Jeff Bitter
January 30, 2019

5. Macro Planting Trends Will we experience growth in acreage?
DIGGING DEEPER

6. The Big Supply Question:
Do we anticipate “too much” production in the immediate future?

7. (all things considered)
The Good News

8. +½%
591,000
594,000

10. 2019 Nursery Survey
What did we learn?
DIGGING DEEPER

11. 22,000,000 Vines Sold
in 2018
Largest since 2014

13. Huge preference toward reds:
31% white

14. How do they rank? 1 2 3 Cabernet Sauvignon: 17,000+ acres non-bearing
First in vines sales
In 2018, 14% was non-bearing 2
Pinot Noir:
10,000+ acres non-bearing
Second in vines sales
In 2018, 16% was non-bearing 3
Chardonnay:
10,000 acres non-bearing
Third in vines sales
In 2018, 9% was non-bearing

15. Additional Points of Interest
Nursery Survey
Additional Points of Interest
Vine sales were largely driven by wineries.
(And most were coastal plantings)
Sauvignon Blanc planting took off in 2018.
(Double what was planted in 2016 & 2017)
Central Valley planted less than 2,000 acres.
(This is less than 1% of their bearing acres.)
While Pinot Grigio plantings dropped way off,
red blenders & Bourdeaux’s remained strong.
Grapes for Rosé not necessarily on the radar.

16. Segment/Region Review
Pinpointing growth
DIGGING DEEPER

17. Central
Valley

18. Central
Valley

19. 201,000
190,000
-6%

20. Northern
Interior

21. Northern
Interior

22. +2%
154,000
156,500

23. California Coastal

24. California Coastal

25. +6%
236,000
247,500

27. California Coastal

28. California Coastal

29. 2/3 of this will be Chard, Cabernet and Pinot.
+6%
236,000
247,500

30. Our Friends to the North
Washington State
State winegrape acreage compiled periodically
Compiled most recently after 2016 crop
55,500 acres recorded (8% non-bearing)
60,000 acres commonly estimated
1/3 white varieties, 1/3 Cab Sauv and 1/3 other reds (mostly Merlot & Syrah)
For relativity, Washington is equivalent to Sonoma County in winegrape acreage.
Plans are being made to begin a Nursery survey for Washington in the future, since vines are almost exclusively propagated and distributed within the state.

31. Our Friends to the North
Oregon
State winegrape acreage compiled by University of Oregon
Compiled most recently for the 2017 crop
34,000 acres recorded (8% non-bearing)
Pinot Noir is almost 2/3 of the acreage
For relativity, Oregon has more Pinot Noir acreage than Sonoma County and Santa Barbara County combined.
Nurseries polled in California and Washington indicate at least another 700 acres of Pinot Noir were planted in Oregon in 2018.

32. Things to Ponder…
Noteworthy Points
DIGGING DEEPER

33. Not Necessarily: The Official Recommendation… It’s time to dig up
Are you saying
I shouldn’t
plant grapes?
Not Necessarily:
The Official
Recommendation…
It’s time to dig up
“non-performing”
vineyards.

34. Hey! Stop picking on the Central Valley.
This is not a Central Valley (or value segment) problem.
This is a state issue:
Virused Vines
Aging Vineyards
Dependence on Labor

35. What else can growers do?
Consider documenting
your sustainability:
It starts in the vineyard!

36. Smoke Exposure
An Industry Issue
What to do?

37. Smoke Exposure An Industry Issue What to do?
Industry messaging - Differentiate between smoke “exposure” and smoke “taint”
Research, research, research
Define and understand the presence of contributing compounds
Amend/develop grape purchase agreements so there is language that includes resolution
For growers, evaluate the practicality of federal crop insurance

38. Noteworthy The industry has more of a demand issue
than a supply issue.
If we had stayed on the same shipment
trajectory that we’ve been on for the
last two decades, we would be
talking about an impending grape shortage.

39. Noteworthy The strategy for correctly addressing any
inventory imbalance for the future is not
necessarily to stop planting higher quality,
sustainable vineyards.
Instead, we should be fast-tracking
the removal of “non-performing” vineyards,
in all areas of the state.

40. Noteworthy Cabernet Sauvignon, Pinot Noir and
Chardonnay are going to dominate the
future of the California wine business.
Could this be a consideration
in planning your future in the business?

41. Noteworthy Don’t lose perspective…
Overall, the wine industry is very stable.
Inventory changes do manifest themselves
in spot markets (grapes and wine).
If you “reside” in these markets,
you will feel these changes more
than those who don’t.

42. Check Us Out:
Booth 826
or on