The supply puzzle: Experts weigh in on how a shortage will impact industry(3)
What’s the outlook for supply and demand of grapes and wine in the next few years?
Bill Pauli: A large crop — say, 3.9 million tons — would put things back in balance. But what is the longer-term outlook with continued growth in sales and the supply needed to sustain that growth? What is a realistic, longer-term, average yearly state grape tonnage? Regional supplies for coastal brands will be a concern, as a large percentage of new plantings will be concentrated in District 13 [Madera, Fresno, Alpine, Mono and Inyo counties and parts of Kings and Tulare counties].
Supplies in coastal regions will remain tight due to limited land availability and the high cost of development.
Steve Smit: As we’ve all heard there is a fairly large surge in plantings. There were some decent plantings last year in the Central Valley.
My gut feeling is that a lot plantings are in new ground, so that will help ease supply. But I see supply being tight for the next two to three years. There is need for zinfandel and cab. But are we coming into balance with merlot?
In North Coast, we have older vines that need to be replanted, so really that’s just keeping balance with what we have and so not much about growth in terms of tonnage.
Prices have come back to where they were three years ago just before recession. The market had been going in the positive direction, and I think coming back there.
Again, I don’t think we’re taking a lot of price on wine yet. The global picture complicates typical cycles we had in grape growing communities. Globalization, acceptance and tasting of wines around the world will have impact on the cyclicality of the wine business.
Joe Ciatti: We’re going to be basically short, as we are right now in California and in almost every variety. It is going to take replanting and new vineyards to really change it. There is land for planting grapes in outlying wine regions such as Lake and Mendocino counties and Clarksburg and certain areas of the Central Valley. In the Central Valley, they’re talking about planting, but there’s no rootstock left for 2012 and nurseries are gearing up for 2013. That’s good for growers, but they do not want to be so pricey that it will hurt sales of California wine.
