JUNE NEWSLETTER

We hope everyone is having a wonderful summer.  We wanted to reach out and give everyone a quick up date.

THE EFFECTS OF WEATHER

Here we are on the first day of summer and we probably will not reach 80 degrees this afternoon.  Today reflects the weather we have been experiencing all during the spring.  It has been mild with just a handful of days ever reaching 90 degrees F. The 10-day forecast has just three days reaching over 90s F towards the end of the cycle.  Beautiful weather to enjoy but historically very cool for California agriculture.

With our very wet Winter and early Spring not only drought conditions disappeared very quickly, but grape vines may also be producing a potential heavy crop.  The last few years have reinforced the adage that dry winters generally produce lighter crops and wet winters produce heavier crops.  What makes this even more a potentially heavy crop is our current mild weather.  Both bunches and berries keep growing.  On some varieties the bunches are the biggest I have ever seen.  

With cool weather and a big crop, we may experience a very late maturity for our grapes.  The cherry crop was large and anywhere two to three weeks later than normal.  We had the hope early that the grapes would start catching up but just the opposite occurred.  Naturally the weather in the next few months will determine the exact timing of the crop, but it will not be early.  The timing of veraison (color change) for an early variety like Zinfandel in July will give us an ideal about maturity.  A lot of later areas are very concerned about whether their maturity will beat the fall rains.

To ensure proper maturity and quality grapes we may be recommending the thinning of grapes.  We like this to be done after the color changes so the lighter and weaker bunches can be removed.  In past years, we have also seen thinning be done very close to maturity.  Not only does it remove weak bunches, but it invigorates the vines so that one can see dramatic sugar and color gains within a few days.  At this time, we see that thinning may be essential for quality grapes.

MARKET CONDITIONS

Market conditions are poor. Like many industries there is an unknown factor that can’t be determined that concerns the future of the overall economy. Will there be a recession or just a slowdown or are we in one now? The wine industry is playing it very cautiously. Activity for non-contracted grapes is very limited, if existing at all. Of course, this will may change as we get closer to harvest.  For some of the biggest wineries, there has been a decrease in overall case wine sales, and this scares the big wineries.

Initial materials cost seems about the same as last year and freight seems to be reasonable.  Labor costs should not be higher this year, but there were some costs last year that were not anticipated. The major costs were power and insurance costs in our cold storage operations.  If wineries do not change their purchasing outlook, it means there will be lower purchase price for most varieties that we can pass on to our buyers     It will be a great opportunity to make wine for your winery or at home at prices not seen for a few years!!!

If you have aby questions or concerns about the upcoming season, please contact us.

MARCH NEWSLETTER

SOME ENCOURAGING NEWS:

With all the question marks about the general economy and with a slight decrease in general wine sales there is a general pale over the industry.  But we are encouraged by a couple of articles and our own observation.

From the Wine Business Monthly the United States is now home to 11,691 wineries.  This is nearly 400 more than in 2021 and 1,215 more than in 2020. Since 2019, the number of U.S. wineries has grown at a rate of 4 percent, which matches the growth rate since 2010. Outside of California, Origan and Washington there are 4904 wineries.  “The sustained growth of wineries, through the pandemic and associated economic turmoil, is encouraging, especially when compared to the decline seen in the restaurant industry and other on-premise and retail outlets over the same period.”

From the IWSR, the leading source of data and analysis on beverage alcohol marker, shows there were 4 million more wine drinkers consuming wine on a weekly basis in 2022 than in 2018, a strong rebound from the Covid-era low point in 2021. “Since the pandemic, however, there’s been a bounce-back in overall wine participation rates in the US: the number of regular wine drinkers (RWD) grew by 14 million between 2021 and 2022. This momentum is mainly coming from those under the age of 40, and the wine industry is seeing a growing influence not just of the most engaged consumers (aged 25-54)”

From our own observation at the Unified Wine & Grape Symposium in Sacramento in January as an observer at the recent Texas Annual Conference as an Exhibitor there was a very positive attitude about the future. The attendance in Sacramento exceeded anything I had ever experienced.  In Texas wineries were very bullish about their industry regardless of the growing problems experience the last couple of years.  We are playing a part to help some of these wineries fill their supply gap.

WE ARE CHANGING:

As some of you may already know my daughter Alison Colavita will be no longer working with F. Colavita & Son.  She received a wonderful carrier opportunity that she couldn’t turn down.  

Starting in 2020 we started working with a grower that had fantastic history in the wine grape industry.  He was head of field operations for a large wine grape shipping company.  His father was also involved in the industry as fieldman and currently his father is still active as a grape broker for wineries.    On top of all that he is an excellent grower specializing in Italian Varieties mainly located in the Clements area.  Last year we worked very close with him to overcome a lot of the problems the 2022 season presented.  His name is Kevin Pitto.

This winter through Kevin we were introduced to a professional produce salesman who was going to strike out on his own.   He also worked for a large wine grape shipping company and another large local produce shipping company.  He is striking out on his own and in the spring he will be working with a very large cherry growing entity.  In the fall he will be working with us.  His name is Matt Nowak. 

Eventually I can see them becoming a part of our company.  My younger daughter Anna wants to be more involved in the business, but at this stage three young children are a priority.  How all this will work out with proper protocol will be developed over this spring and summer.  My object is to make sure our customers and growers will know that F. Colavita & Son will have solid continuity into the future.  

SEE YOU IN LANCASTER

Both Matt and I will be exhibiting in Booth 221 at the Eastern Winery Exposition Wednesday March 15 and Thursday16.  (We will be leaving early afternoon on the 16 to catch our return flight.)    Please stop by and say hello.  If you need some passes, please let me know.

WINTER WEATHER

We are experiencing some of coldest and, thank God, wettest winter in a long time.  Hopefully drought conditions will disappear.  Temperatures are in the 30s at night and not going higher than the middle 50s during the day.  There will be some serious frost damage for Almonds throughout the State, and I wouldn’t doubt on some Citrus.  Grapes are still very dormant.

THE PERLIMINARY CALIFORNIA GRAPE CRUSHCROP REPORT AND MARKETING CONDITIONS

The 2022 wine grape was light for the third straight year in a row.  The total was 3.35 tons (Not included were the total raison and table grapes crush).  It was the lightest in over a decade. It was less than projected due to frost, excessive heat and the continuous effects of drought.  In all respects the light crop may have been a blessing.  The crush probably put in balance supply and demand with the challenging consumer sales growth environment.   

With the current demand needs in question there is hardly any movement in new contracts being issued and wine sales.  The exception may be the North Coast areas and we are hearing of some activity in the Central Coast.

January 2023

Greetings everyone. I hope the new year is treating you well.

As I sit here contemplating this newsletter, it is hard to describe the 2022 grapes harvest and therefore almost impossible to predict what may occur in 2023. In a very simplistic and polite manner, 2022 was a very challenging year. Between weather, market conditions and crop yield, there were ups and downs.

The season saw drought, hailstorms, frost, unseasonably cool, humid or cloudy conditions, heat waves and rainfall and often in quick succession. The drought of the last few years continued all winter long and early spring. Irrigation water was only available if you had a well. No surface water from any Irrigation District was available in the entire State.

On top of the drought there was a lot of frost damage one spring morning. It was not predicted nor anticipated. It hit mostly northeast and northwest of Lodi and a few other parts of the State. After the frost occurred, the weather was so mild that normal bloom time was extended. A lot of berry shatter occurred when it got warmer. The shattered or loose bunches appeared in almost all varieties in some vineyards and in some growing areas.

The worst weather conditions occurred during harvest in the Labor Day week. Temperatures reached 115 degrees F on most days for almost a week. For both safety considerations for labor and the unknown effect of this heat on the vineyards, we continued our harvest only at night. Everything was culminated with rain fall in late September!

The grape market was very strong during last winter. Contracts were initiated at slightly higher prices than the 2021 season. There was aggressive buying. By springtime uncertainty in the general economy grew and wine sales started to slow down. The bigger wineries slowed down their buying. In contrast smaller wineries remained aggressive because of their lost tonnage due to frost and anticipated lighter crop.

For the third year in a row, they were predicting a below than average total crop. But an anomaly to this general assessment, we experienced phenomenal bumper crops in several vineyards. In dramatic contrast, we lost some vineyards that suffered total dehydration of their grapes because of the unparalleled heat wave. Way up and way down were our results, truly mind-blowing. It will be interesting what the total harvest will be 2022.

We experienced a very wet December and January is following suit. There has been significant rain almost every week and currently there may be almost two whole weeks of rain into the new year. We have a long way to go before drought conditions can be alleviated. Last year we had a very wet December and then nothing. With all the rain and windstorms hitting us continuously in January, the weather gives us hope that drought conditions will be alleviated.

Grape marketing predications are in the same state as our general economy. Nobody knows what is going to happen. Coastal grape buying supposedly is still very strong in response to recent lighter crops. There are indications from several sources that there will be an easing of prices.

The shocking rise of total cost of labor, materials and energy for 2022 exceeded the initial cost of most the grapes. It cannot continue in 2023. Let us hope that inflation will diminish, and all costs remain stagnant or go down. Surprisingly after these rising costs, horrible weather, marketing and harvesting developments sales to our winery customers increased in both total tonnage and dollar volume.

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SEE YOU IN SACRAMENTO & TEXAS

Please let us know if you are attending the The 2023 Unified Symposium in Sacramento on January 25 & 26. We can meet up. Also, we will probably be exhibiting in the Annual Texas trade show on February 22 & 23.

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The following bulk wines are available out of the Clements Hill sub AVA of Lodi. Please contact us for pricing.

Montepulciano 2020 - 660 gallons

Montepulciano 2021 - 4114 gallons

Nero D'Avalo 2021 - 40 gallons

Cabernet Sauvignon 2021 - 2000+ gallons

Grenache Blanc 2022 - 760 gallons

Marsanne 2022 -

645 gallons

Sauvignon Blanc 2021 - 120 gallons

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Thank you for your support. It is very encouraging, and we will continue our hard work to deliver the best quality available.

Please let us know if you plan on attending The 2023 Unified Symposium in Sacramento on January 25 & 26.

Thank you,

Michael Colavita

July 2022

A good news newsletter:

An article in Drizly 2022 Consumer Trend Report  BY KIRK MILLER

According to the latest drinks survey conducted during April 2022 from Drizly, the youngest legal-age drinkers are gravitating toward a parental staple: Red wine.

 “The nation’s youngest legal drinkers cited red wine as the drink they most anticipate buying more of this year, topping a list that included tequila and hard seltzer,” as the report notes. When asked what drink they plan to buy more of this year, Gen Z respondents put red wine (38%) on top, over tequila, vodka, hard seltzer, rosé and RTDs.

TIMING LOOKS GOOD

Normally we wait until after the Fourth of July to take our second assessment of the crop.  If we see a hint of veraison in early Zinfandels, we know that grape development is normal.  Surprisingly this year we saw a little veraison on our home vines on June 26.  We also heard that there may be a significant shatter in a lot of varieties.  Anxiety took control and we proceeded to our own review.

There was some ever slightly veraison in our early Old Vine Zinfandels.  That is great.  We did see some shatter in the Zinfandels but that is normal for the variety.  What did surprise us, was the shatter in some Cabernet Sauvignon vineyards.  With the bunch count being so high in May, we thought it may be a bumper crop especially for Cabernet Sauvignon.  With the shatter showing up and possibly smaller berry size, we just have a nice crop of grapes in all varieties.

Slight veraison in Old Vine Zinfandel Lodi - July 2022

PRICES SLIGHTLY HIGHER

There has not been much activity from the big wineries.  Slightly higher prices that were in effect early in the year stayed the same. Those higher prices reflected close to the 2021 final prices that wineries paid as bonuses over the original contracts for that year.   However, there are a lot of smaller wineries eagerly looking for specialty varieties that they lost due to frost.  This is especially true for Amador wineries.  We have also seen Napa wineries a lot more active in our area then they have been the last few years.  Still to be assessed will be labor and material costs.

THE BEST NEWS YET

In the beginning of the year freight rates rose almost 100% over the rates from the previous year.  That development sent chills through the refrigeration transportation industry.  Checking with freight brokers last week PRICES ARE NOW SLIGHTLY LOWER THAN THE RATES IN 2021.  This goes for all parts of the Country.  I don’t understand it but one broker said it could change in an instant.  Let’s hope that prices will drop even lower.

May 2022

FROST DAMAGE

On the morning of Tuesday April 12, 2022, temperatures dipped below freezing a few days after reaching 90°F in some places. The areas that seem to be seriously damaged are the Delta, Thornton, Sloughhouse, Clarksburg up off of Grant Line Road, and across the east side of Lodi that includes Clements and lower areas of the foothills and Amador County. There is some damage in Linden and Farmington. After almost a month, we are still hearing of some areas affected. Just last week, we heard that some vines in Livermore Valley were affected, especially Chardonnay. This frost was not generally predicted and if it was just a few degrees colder, the entire 2022 grape crop around the State could have been ruined.

This last week we tried to visit most of the vineyards from which we harvested grapes over the last few years. We were reassured by the report that most vineyards in the Lodi/Mokelumne River area were spared. Our main source in Amador County said he had no damage and we are not hearing any damage in our Coastal sources.

In visiting the unaffected vineyards, there appears to be a very good bunch count and size on all varieties. Don’t get us wrong, we still have a long way to go, especially weather at bloom time. But it is nice to see the forming bunches.

PRICING

In almost all Districts, there are not many grapes that are not under contract. The crop for 2021 turned out to be the 3.6 million tons that was estimated. With the second short crop in a row, most people expected wineries to significantly increase their prices. This has not occurred. A couple of major wineries did not try to buy more grapes. So far we are seeing prices rising only from $25/ton to $100/ton depending upon the variety. Maybe when accurate losses are assessed from the frost, things could change but we have locked up a lot of tonnage. There are some smaller wineries eagerly picking up grapes at much higher prices. We are not sure what is happening with prices in Coastal areas.

FREIGHT

The scariest aspect for the upcoming season is the prospect for another dramatic increase in transportation costs. Last year trips to the East Coast increased $5000 to $6000 over 2020 costs. This year there is currently an increase in refrigeration transportation costs of about $8000 over 2021. Let us hope that fuel prices will drop in the next four months and other factors help bring freight costs. Transportation plays a significant part in almost everything influencing our current inflation numbers.

DROUGHT

February and March 2022 proved to be the driest months ever recorded. The drought restrictions reached a point that any new well drilling is prohibited. With no water available from any irrigation districts, any new land development will be almost impossible.

February 2022

DROUGHT, DROUGHT, DROUGHT…

It seems like all anyone talked about in 2021 was drought, and for good reason. The 2020-21 rainfall season was the driest ever recorded since 1895. Then in early November of 2021, we experienced one of the largest and intense rainfalls ever for a couple of days. A lot of areas received over 5 inches of rainfall. A holiday gift was then given to California with continuous rains between Christmas and New Years. What a great start to the rainy season. The only problem is that there has not been any precipitation since then. It has been over a month and the forecast for the next couple of weeks is for dry weather. Someone forgot to tell Mother Nature that this is our rainy season! We experienced the driest January ever. If this dryness persists, wells will be the only source a grower will have to irrigate. There will be no water available for California Agriculture from any Federal or State water districts.

AN AMADOR SOURCE

One of our growers (Sangiovese and Zinfandel) was recently mentioned in a recent BARRON’s article by Hudson Lindenberger. We have been selling some of his Sangiovese and Zinfandel for years from Amador County (Foothills). We quote:

“Winery: Avio Vineyard Specializing in the Italian-style varietals that Amador County is known for, Avio Vineyards feels like one has been transported from the Tuscan countryside. Founded by a family with winemaking roots that stretch back to Italy, they are a boutique vineyard that produces small batches of award-winning wines. Their Barbera is chock full of black cherry and plum flavors that intermingle with hints of vanilla and smoke. They also make a smooth Sangiovese that's a pleasure to sip.”

PRICING???

• We are attempting to sign up some of our regular long term growers to new contracts for the upcoming season. Even though our growers have pledged to sell the grapes to us this year, there is no consensus of what prices should be for the next couple of years. Last year everyone came out about this time and bought as many grapes as they could. As the 2021 season progressed, spot and minimum prices rose as the lightness of the crop became apparent. Now there is a very natural hesitancy to wait and make a more timely decision.

Some facts are obvious:

• There are currently not that many grapes that aren’t under contract. Wineries are trying to extend the three year contracts signed the last couple of years at higher prices. Again no consensus of what that price should be.

• Cost of farming of almost anything is increasing dramatically and we are still seeing marginal grape acreage being pulled out.

• We have had two light crops in a row. This is what is causing the unprecedented demand for grapes and wine. The projected Annual California Grape Crush Report is estimated for 2021 at 3.6 million tons. The official Report is due out shortly. If it proves less than the 3.6 million tons, prices will rise even more so, if it proves higher there may be some easing. Regardless, prices will rise.

SEE YOU IN TEXAS

We will be exhibiting at the Texas Wine & Grape Growers Association on February 17th through the 19th. We will be in Booth 515. We hope to see a lot of our Southeast and Texas customers.

We also hope to visit a couple of our customers at their wineries.

November 2021

We hope everyone had a wonderful Thanksgiving!

A YEAR IN REVIEW

Three weeks ago we shipped our last grapes to winery customers, and last week, we shipped our final loads of customer-owned grapes (we facilitate the handling and shipping). We started harvesting on August 8 and here we are, almost three months later, with our last shipments. It was our longest season ever with some of the most difficult challenges we’ve ever faced. It was a season that required patience for all concerned (growers, customers, and us!). It was a season with so many twists and turns that we would like to review and project for the future. 

TRANSPORTATION

Transportation played a major issue during the season. It was both a major economic and logistic issue. Rate increases were horrendous. Generally it was a 30% to 40% increase across the board— regardless of destination. Even more of problem was the lack of transportation options. Most truckers did not want to make two pickups and forget about two drops. We prided ourselves in past years with our ability to ship early maturing grapes out in a timely manner to various wineries around the country. This year, we had to wait until later maturing grapes were harvested so that an almost complete full load volume was available. This put a lot of pressure on facilities, employees and material availability together with cost issues.

WEATHER

 Weather generally cooperated to the extent that there was no moisture during the season. This helped tremendously because we had to store grapes longer than normal due to the transportation issues. The season started with some very hot weather and generally continued warmer than normal throughout the season.

Three weeks ago we experienced one of the biggest storms ever in Northern California.  Rainfall exceeded historic daily totals for many areas. This rain was a Godsend. With drought conditions throughout the State, many growers had been notified that no water would be available in 2022 from their water districts, period. Well water would be their only source. If that policy has to continue, a large amount of growers would not be able to farm their acreage. Many grapes would be affected. Let’s hope this storm is the first of many more. 

GRAPES

The overall crop for almost all varieties in all areas, except for Cabernet Sauvignon, was generally lighter than normal. This was especially predominant for white varieties. The lighter crop had its formation due to the very dry winter, reduction of water availability from water districts, and the very hot weather in late August and early September. Almost all varieties matured at the same time. Merlot, Zinfandels came right on the heels of Chardonnay and Pinot Noir. There was a period of two weeks when we had to harvest grapes in an almost hysterical manner. Most Cabernets, however, took their time, and in late September, we had to stop picking to wait for our last Cabernets to mature.

Prices for all varieties rose as the season progressed for any grapes that were not contracted. Those rises were above the already higher prices contracted for the 2021 season. We will see prices rise again in 2022. How high that price rise will depend on the final 2021 total crop. Most grapes contracted in 2021 were signed up for minimum prices for five years. Actual prices that will be paid or promised for 2022 may be well above their minimum prices. 

SUPPLIES

We started the season with some of our packing supplies stuck in a Los Angeles Port. We had no idea when we would receive them. We had ordered them 6 months earlier.  Luckily they arrived a day before we needed them. One item we did not order early and we never had had to do it, was pallets. Our usual supplier had NONE, we finally found some but with a cost of over $10.00 from previous years some were $25.00 more.

LABOR

Labor costs also increased for the 2021 season. That was anticipated but we were lucky to have a very loyal picking crew and storage personnel. We promised our field labor a substantial picking bonus, if they would stay with us throughout the season. We were happy to pay it because we had a consistent, reliable crew throughout the season.  Labor will go up again next season as the minimum rate goes up for the State in 2022.

GOOD DEVELOPMENTS

Several very good developments occurred this year that need to be mentioned. We have sourced a new supplier for bulk juice needs for our winery customers. Everybody was happy with that development. We have also greatly increased the relationship with a farming and brokerage entities. This entity has a large source of grapes especially Italian varieties. Also this is the first time we shipped bulk Cabernets, Pinot Grigio and Merlot from the same vineyard we have sourced our coastal Pinot Noir in San Benito County. We also have been introduced to growers from other Coastal areas.

BULK WINES AVAILABLE

The following bulk wines are available out of the Clements Hill sub AVA of Lodi. Please contact us for pricing.

16,000 gallons Cabernet Sauvignon – 2021

4,230 gallons Montepulciano – 2021

660 gallons Montepulciano – 2020

730 gallons Nero D’Avola – 2021

625 gallons Albarino – 2021

1,450 gallons Sauvignon Blanc – 2021

LOOKING FORWARD

One heading from a wine blog headlines “Historically Low World Wine Production Expected”.  From other blogs we are reading and our experience here in California, we agree with that assessment. Also with the very low availability of bulk wine (and the prices we are hearing for them) all wine will increase in price. We are so happy that we sold a lot of grapes and juice to our customers. It is obvious that retail prices must go up. We hope all our customers will make a great wine and equally their production will be extremely profitable.

We hope everyone has a nice holiday season, and please contact us if you’re interested in any of the available bulk wines.

July 2021

Last weekend we experienced a very high temperature heat wave of over 108 degrees F. The heat wave extended throughout the State. It was a lot cooler a day or two later. We were very lucky several weeks ago to have missed the dramatic heat wave that hit the Northwestern States and British Columbia. Other than this last current heat wave, the weather has been ideal with cool evenings and warm days. Veraison is progressing typically for this time of year. Below is Old Vine Zinfandel in Lodi taken a week ago.

Before the heat wave, we looked at a lot of vineyards. To our surprise we were shocked with the size of the crop. Zinfandels are showing a very light crop for the second consecutive season with Pinot Grigio a close second. Cabernet Sauvignon surprisingly is the variety that is showing the best crop. Merlot and other varieties are fair to good. This hot weather will probably reduce overall crop size.

There is no question that the State is in a very serious drought condition. How fast this drought occurred is shocking. It was just two years ago when all of the State’s reservoirs were full. This year many growers have fallowed a lot of land because of their concerns that very little water would be available from various irrigation districts throughout the State. Most vineyards are irrigated by wells but district water is cheaper and better quality. The governor has formally requested that people reduce their water use by at least 15%. No rain this winter will be a disaster for everyone.

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Covid Repercussions

Transportation - Transportation will be terrible this year. Not only are prices for full load shipments beyond imagination, especially to the East Coast, but there is not that much availability of drivers.  Prices for East Coast shipments are over $5,000.00 more than last year. It appears that Midwest shipments are about $1000 to $2000 more than last year. There are about 1100 lugs or 20 tons per shipment, which could add an additional $5 per lug just for increased freight costs.   The increase in freight will even be greater for those shipments that include several drop (delivery) locations. According to DAT Trendlines™, June 2021 versus June 2020 refrigerated truck load rates are up +111.7%, with a current load to truck ratio in California being 12+ loads available per truck. 

Labor - Throughout the agricultural industry, labor shortages abound. Picking crews are at best at half staff for all crops. There will not be enough labor to harvest the grape crop from the actual harvester operators, forklift drivers, and truck drivers. In our last Newsletter we said we were not concerned, however, right now everyone is concerned. We have had a very reliable crew for many years. We hope that relationship continues. One of the biggest problems at the end last year was losing some of our crew to marijuana harvesting. We hear they are telling people that they will guarantee minimum $200/day payable every day in CASH.

 Supplies - Everything is going up in cost. We have ordered all of our supplies not knowing what the final price of many items will be. We are also concerned that the price of grapes may even go higher than they are now. Once the size of the crop is realized (e.g., short crops), wineries will bid even more money for the few grapes that are still available, driving the price further up. There is a very serious concern that wineries may not be able to timely harvest the crop either. Transportation and Labor will also haunt them, maybe even more so. 

Outcome

Every grapes season has had it concerns before the start of the season. This year it is worse.  Please let us know your needs as soon as possible. We have bought a lot of grapes early but maybe not be enough grapes and the prices continue to go up. All we know is that everyone is going to have patience.

May 2021

2021 GRAPE CROP

At this stage, the overall grape crop for 2021 looks like a potentially substantial crop. There are many bunches and what stands out almost shockingly is the length of bunches. We are currently in bloom or post bloom with no indication of any possible berry shatter. There is a long way to go but it is a perfect start. The only variety that is showing a little inconsistency is Old Vine Zinfandels. In general, however, the crop on the Old Vine Zinfandels is much better than last year. 

WATER, WATER, WATER NOT HERE

There is a very serious drought condition throughout the State. Allocations from Water Districts are no more than 10% and most are at 5% of past assessments. Of course, most growers have groundwater from their wells, especially in Northern California to irrigate their grapes. In some areas, there may not be enough well capacity to supply their entire acreage in a timely manner.  There was only one substantial rain storm this past winter. The depth of the snowpack in the mountains was one of the lowest in years. The runoff this year will be insignificant. Water issues are the primary topic of concern among growers.

WEATHER

Our weather pattern for the last month has been cool nights and warm days. The daytime temperature differential has ranged once as high as 40 degrees F and probably average close to 30 degrees F. It could be a reason that bunches have substantial growth, and the vines look so vigorous. Grape maturity will be later than last year. Other crops are about a week later than normal. The combination of this beautiful weather that promotes vine growth, and the apparently very good crop, will bring us to a later harvest. 

There is growing and rightful concern about potential forest fires this summer. The very dry winter has everyone scared. I hope we never have anything close to what happened last year.

INFLATION EVEN IN GRAPES

As we had mentioned in previous Crop Updates, the price of grapes has gone up a minimum of $50.00/ton to $200/ton from 2020 prices. This was due to the light 2020 crop and the tremendous amount of smoke taint grapes in the Coastal Regions that were not harvested.  There is no substantial volume of wine available in California. The wineries need all the grapes they can get this year.

What we are starting to find out is that transportation increases might be at least $100 ton higher to the East Coast and proportionally to the rest of the States. With fuel currently going even higher this can be very scary. Let’s hope that scenario changes.

Our packing supplies are also significantly going higher. The cost of the wooden pallet may approach $.50 a lug or $27.00 a ton. We will probably not pack any wood boxes this year because of the difference in costs in materials, and everything will be in corrugated plastic cartons, even 42 lb lugs. We have already ordered our bins for winery shipments without a price!!!

Labor is also a known unknown entity. As an employer who has had a very loyal labor force especially in Northern California, we do not normally have concerns. Towards the end of last year, we did lose some employees to the marijuana industry. The marijuana harvest industry pays CASH daily to their employees at a much higher rate than other agriculture industries can afford. Together with the current labor situation throughout the country, these concerns are justified.

With the reopening of America, we hope everyone has a great Memorial Day Holiday.

February 2021

THE CROP HAS BEEN CONFIRMED

The 2020 Preliminary Winegrape Crush Report released a few days ago shows a California statewide wine grape crop of 3.404 million tons. This is the lightest California wine crop since 2011, down 13% or about 88 million gallons from 2019. The 2019 crop was about 9% less than the 2018 crop. The reduction of the 2020 crop was due to mainly lower yields per acre in most

areas and the exposure of smoke taint in the Coastal areas.

There is no question that the reduction in crop yield has not only put the current bulk wine market in a strong and tight position, but it also is creating an unprecedented demand for the 2021 crop from the interior of Northern California. For the last few months, wineries, especially in the Lodi area, have been actively solicitating renewal of grape contracts, solicitated new contracts and even issuing planting contracts. Prices have already increased a minimum of $100/ton for Cabernets and Merlot from last year and this is before the Winegrape Crush Report came out and any prospect of the 2021 crop can be assessed!!! Imagine if we have a light crop in 2021.

CONTINUING ANOMALY

This price rise and unprecedented demand for Lodi grapes is a continuation of the Lodi anomaly that we spoke about in our last Newsletter. Lodi grapes are in big demand for their unequaled quality-price ratio. That anomaly is reinforced this year by the final FTC approval of the revised Gallo-Constellation blockbuster wine deal. Last year there was confusion as to what winery would do what. This year everything will be formalized.

Because of this anomaly, a vineyard that we have always been sourcing our Tempranillo (from its very first crop) is being actively soliciting the crop for the 2021 season.  Out of respect, the growers want to protect our relationship. We are asking everyone who has purchased Tempranillo in the past or has interest for this year please contact us ASAP. We want to reserve some for this year from this outstanding vineyard and we will give you the details.

Activity in other locations is far from robust and probably exemplified with a concept of let us wait and see. As with many wineries across the Country the coronavirus pandemic response led to months long stretches of closure of key sales channels in tasting rooms and restaurants.  Even before the pandemic the North Coast wine business had been facing slowing sales growth and increasing competition from other premium adult beverages. 

WE HAD AN IDEA, BUT IT WAS STILL A SURPRISE

Going into the 2020 season, like for everybody else, there were a lot of question marks. As it turned out, people kept ordering grapes and we had one of the most successful seasons ever.  Box shipments increased for home winemakers by over 6,000 lugs and winery shipments actually increased by 10%. This says a lot about our customers. A lot of retail distributors of boxed fruit were not able to operate because of the Covid restrictions but all of ours flourished. A lot of wineries that we dealt with had commercial outlets for their wine and with the increase in wine sales in the commercial outlets, their sales flourished, and they ordered accordingly.  Thank you to all our customers.

Also, there are a lot of wineries who have ordered grapes every year but because they could not open their tasting room or could not market their wines at all had to pass. This situation should improve as the vaccine becomes more available and we are looking forward to doing business again.

NEW SOURCE FOR ITALIAN VARIETIES

We have located a new great source for Italian Varieties in the foothills.  Dolcetto, Montepulciano, Aglianico, Sangiovese, Nero D’Avalo are just some of the varieties that are in this vineyard. Last year we sourced Sangiovese from four different ranches. Please contact us early as possible for some of these high-demand varieties.

P.S. - Please contact us ASAP if you are interested in purchasing bulk quantities of high-demand varieties like Tempranillo, Dolcetto, Montepulciano, Aglianico and Sangiovese.