Market turns for grape growers(3)
Constellation Brands, which owns several North Coast wineries including Clos du Bois, Ravenswood and Robert Mondavi, is not panicking over the decline in supply, but it has started offering planting contracts this year, said Steve Smit, vice president of grape management.
“The good news is there’s more demand from a lot more wineries,” he said. “I don’t want to be paying more for grapes, but it’s better for the industry as a whole, if you look at it from the standpoint of the survival of growers.”
Francis Ford Coppola Winery also has been entertaining planting contracts in the past few months, especially for cabernet sauvignon, said Corey Beck, general manager and director of winemaking.
“Given the unknowns of the market and the whole economy, we were reluctant to sign up and put new grapes in the ground, because who knew what was going to happen?” Beck said. “But now we know there are still people drinking.”
Even so, making money as a vintner or grower continues to be a challenge.
“Grape prices might be going up, but the wine prices probably aren’t going to follow that quickly, so that’s going to mean some margin erosion in wineries,” Smit said.
And the sea change for grape growers comes after years of tumult.
“Sellers are going to do better than they have in the past, but the last three years have been devastating,” Clements said. “Some of these growers who have been doing this for 20 years, they’re just hanging on.”
