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From: lewis.perdue@wineindustryinsight.com

Subject: Custom Crushers Get Creative To Help Growers Survive

Date: 2009-10-15 14:30:09

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WINE INDUSTRY INSIGHT

EMAIL EDITION - VOLUME I, NUMBER 126 - October 15, 2009

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WII TWEET:

  • Winning battles, losing war: http://tinyurl.com/yhdzu5k. Most health benefits from moderate alcohol consumption.Industry fumbling that badly.
  • We've always known that a caffeinated drunk http://tinyurl.com/nhufto is just a wide-eyed drunk.
  • Calif rain: complication but not holocaust. Rains all the time in France during growing season and they manage to eke out acceptable wine.
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IN THIS ISSUE:

  • Custom Crushers Get Creative To Help Growers Survive

  • WII’ve Changed A Bit


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 Custom Crushers Get Creative To Help Growers Survive

Call it trickle down disaster: Recession-battered consumers have traded down and abandoned most anything over $20 per bottle. That left wholesalers, wineries and retailers stuck with inventory that left them no choice but to discount. And with only a few exceptions, the higher the price, the bigger the mark-down.

VIP Subscribers click here to read the complete, un-redacted article.

PAIN TRICKLES DOWN TO THE VINEYARD

The pain has now trickled down to the vineyard. The results have made for broken promises and contracts, big winery bottom-feeders, the occasional honorable winery and some creative deals that are helping a few fortunate growers survive.

“There have been a lot of offers from larger wineries to come in, harvest the fruit and pay the grower up to $500 per ton,” said Mike Fisher, Chief Operating Officer of Global Wine Partners in St. Helena. “In many cases that’s the only alternative for the grower to make anything at all this year.”

Fisher pointed out that leaving fruit to rot on the vine is not good viticulture. But because it costs $200 to $250 per ton to harvest, low-ball offers save that expense as well as offering some cash flow no matter how small.

By comparison, the average 2008 price for Cabernet Sauvignon was $4,728 in Napa Valley and $2,311 in Sonoma County. Chardonnay average prices were $2,400 and $2,016 respectively.

KENDALL-JACKSON A MAJOR LOW-BALL PLAYER

None of the North Coast growers interviewed by Wine Industry Insight mentioned Gallo or Beringer, Kendall-Jackson was on most lips. Gallo has its own grape oversupply problem with its huge acreage of Chardonnay and Cabernet Sauvignon, especially in Sonoma County.

Beringer faces the same over-planting issues, especially on the Central Coast. Beringer’s parent company, Fosters of Australia, has been struggling with a global downturn for the past year and has been unloading assets — including vineyards.

“We had K-J offer us $350 a ton for Chardonnay,” said a major vineyard owner who also manages substantial acreage for other growers. “It was a take it on the spot offer. Accept it or say goodbye.”

None of the growers would speak on the record. As one vineyard owner said, “I don’t want my bank to know anything until I can figure out what I’m going to do.”

Nearly every grower said that wineries had walked away from contracts or forced them to negotiate a lower price.

“THE STRANGEST STORY I HAVE EVER HEARD”

“I’ve been dealing with a steady stream of bottom feeders and broken contracts,” said a major Sonoma County grower. “I even called Gallo, but they’re not returning calls. Then last week, I get a call from a winery we’ve been working with for almost a decade.

“It’s not a big surprise to me when my winery contact tells me, ‘We’ve got all the fruit we need this year. We won’t be needing yours.’ I swallow real hard, and then I hear the strangest story I’ve ever heard,” said the grower.

“My contact tells me that, ‘we’re going to honor our contract and pay you in full what we agreed.’ I was stunned. They felt they needed to do the right thing.”

Also In This Article:

The full text of the following sections is available to VIP Premium Subscribers).

  • CREATIVE CUSTOM-CRUSH DEALS TO THE RESCUE
  • SHARED RISK SYSTEM MAKES SENSE FOR BOTH GROWERS AND CRUSHERS
  • MANY CUSTOM CRUSHERS ARE QUIET ABOUT THEIR PARTICIPATION
  • CONTRACT TERMS VARY WITH VARIETAL, APPELLATION AND GROWER
  • JUST ASK. ALL THEY CAN SAY IS “NO”

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WII’ve Changed A Bit

We’ve been coding and working behind the scenes to improve Wine Industry Insight based on your suggestions, our growth and as a response to market conditions.

ADVERTISING MIX

One of the most visible changes lately is a shift in the types of companies advertising.  Visitors to wineindustryinsight.com are seeing a lot more business- and executive-oriented advertisers. This has happened for three reasons:

  1. Demand from mainstream advertisers as they look for effective niche markets to target. The new advertisers are here because of WII’s base of upper-management decision makers: CEOs, vineyard and winery owners as well as finance, accounting, legal and regulatory professionals.
  2. Everyone in the wine industry including suppliers, has been impacted by the recession and that affects advertising decisions.
  3. Some large companies do not appreciate the scrutiny they have received in Wine Industry Insight’s editorial coverage. A small number of those companies have strong-armed a few advertisers and potential advertisers and threatened to withdraw their business if their ads continue to appear here.

    Fortunately, that has not affected us. Our  paid VIP subscribers have always been the financial foundation of our efforts and continue to support WII’s particular brand of journalism.

AFFILIATE PROGRAM TO MONETIZE BLOGS AND WEB SITES

Wine Industry Insight recently hit several significant benchmarks:

  • Subscribership to WII’s VIP Premium Content recently topped 700 paying members since we began charging for some content in March.
  • Opt-in subscribers to the free email edition which is transmitted once or twice a week, topped 11,000.
  • Wineindustryinsight.com topped 25,000 unique visitors (meaning that the same person is not counted twice.)

Because of this — and especially the steady increases in paying VIP subscribers — WII has started an affiliate program to help blogs and other web sites monetize their efforts. The affiliate program involves the placement of an advertisement on the affiliate blog or website. If someone clicks on the ad and subscribes, the affiliate will make 18% — $19.82 on every Annual Subscription and the same percentage for month-to-month subscribers. Affiliates earn the same amount for renewals for the lifetime of every subscription.

WIDER VARIETY OF ARTICLES AND SOURCES

In the coming issues, you’ll begin to see a wider variety of articles and sources. These are in response to your suggestions, tips and needs. Please keep telling us what you like … and don’t. You can always contact me by replying to an email edition or writing: lewis.perdue[at]wineindustryinsight.com.


NEWS FETCH

October 15, 2009
  • Mediterranean restaurant concepts look to expand, wine included
  • Wine-Auction Market Rises 12 Percent in Third Quarter
  • Free the Grapes!: Wine Direct Shipping Issue Fermenting in Massachusetts
  • Drying-out period to follow heavy rain
  • Former Copia food & wine site for sale in Napa
  • Early rain storm could compromise 2009 Cabernet vintage
  • Salcido looks back on survival of wine country mass murders
  • Storm forecast sped grape harvest in south Monterey County
  • New website offers fine wine investment for celebrities
  • WA: Cold weather speeds wine grape harvest
  • Napa Valley harvest: low yields and brix
  • Accounting system still broken at Constellation
  • Copia site may house hotel
  • Vin Tweet?
  • Red Wine Chemical May Treat Diabetes
  • Red Wine Helps Kick-Start Good Digestion
  • Finger Lakes Wine Center hires director, plans opening in spring
  • Value Drives Northwest Wine Sales
  • Lasers to overtake manual sorting in hi-tech Bordeaux
  • Cost Plus, Vaynerchuk Hold In-Store Book Signings
  • "Exotic" vintage excites Cheval Blanc
  • Ornellaia auction funds renaissance art restoration
  • Oz: Consultant says new wine industry award will cost jobs
  • MI: Traverse City named top wine destination
  • NY: Fire At Winery In Northampton County
  • October 14, 2009
  • Santa Barbara Supes Nix Foley Events
  • K&L Wine Merchants Launches Mobile Commerce Site
  • Napa suffers at high end, while lower tiers and cults sit tight
  • Oz: Lightweight wine bottles winning industry acclaim
  • VIDEO: Driving web traffic with social networks
  • Research highlights Chile’s growth potential
  • War or peace? For California, weekend of water talks may prove telling
  • Americans Drink More Wine—Mostly Bigger Brands
  • Storm delays grape harvest in Napa
  • Grapes stolen from Earlimart vineyard
  • Diageo disappoints with quarterly sales fall
  • Musings on Vanity Wineries
  • Giant Wine Shipping Hub to Open in American Canyon
  • UK: Restaurant offers over 60% off fine wines
  • Canada: Frosty weather throws a scare into grape growers
  • Wineries Coming of Age in the Arizona Desert
  • Ontario boosts local wine with new labelling, tax measures
  • Aveniu Brands Announces Changes to Senior Management Team
  • New trivia game tests wine geeks
  • Fort Berens Estate Winery opens
  • Chardonnay Golf Club to drop nine holes
  • Fritz Winery in Dry Creek Celebrates 30 years
  • October 13, 2009
  • Random House Loses Broadbent Jefferson Bottles libel case
  • The perils of selling wine in China
  • New vineyard pest detected in Napa County
  • Maine Direct Shipping Permit Applications Available
  • Excerpt: 'Not Lost Forever' by Carmina Salcido
  • High-end Napa suffers in recession
  • Outrage over Placer County water rights and investments
  • Oz: New organic standards: clarifying the claims
  • WWE and wine snobs gear up for smackdown over smackdown
  • Why China's wine will not soon rival Chile's
  • Wine Country Wary of the Wet
  • Central Coast awaits season's first big storm
  • Grape growers race against rain, rot
  • Bargain prices for grapes leading to low prices for wine
  • WA: New Vineyard Set to Advance Washington State U Viticulture Research
  • Dan Berger: On wine-buying trends
  • Broadbent celebrates victory over Random House with Mouton 1990
  • Oz: CEO Grant departs Constellation Australia
  • Oz: Constellation to close Stonehaven
  • Seminar reviews direct-shipping laws
  • Value seeking leads buyers to malbec
  • NZ: Que syrah, shiraz
  • CT: North Haven Distributor Works At Gauging Trends In Wines, Liquors
  • MN: Fruit of the vine: Vineyards are 'taking root' in Houston County
  • NY: The mayor of the vineyard
  • October 12, 2009
  • Happy Canyon approved as a new Santa Barbara County AVA
  • Food & Wine Journalists Launch Digital "Zester Daily"
  • Constellation Signs With Young's Market
  • Calif. "leaders" fail to reach water accord
  • Eagle Rock Fulfillment Opens In Napa
  • Fortune Brands to Release Q3 2009 Earnings Oct. 23
  • Winery tasting sales training
  • MI: Leelanau wineries ready for holidays
  • Southern Oregon wine sales remain steady
  • Lompoc vintners celebrate harvest
  • NV: Recession Sinks D'Vine Wine Bar
  • Santa Rita appoints Brian Croser as consultant
  • California's Fetzer Vineyards was organic before organic was cool
  • Independent Liquor Group Scoop Top Industry Award
  • Winemaker Has Right Vintage for China Succes
  • NZ: Receiver looking at offers for Schuster winery
  • West Texas wineries bloom despite bad crop
  • Oz: Wine glut vineyards abandoned
  • Unconventional theories spawn believers - and critics
  • Virginia is home to wineries that boast fine wine, service and scenery
  • TX: Winery hosts grape stomping festival
  • October 09, 2009
  • Lodi wine industry targets an international market
  • Oz: Grape glut 'shouldn't limit production'
  • Central Valley ag and education leader Muriel Smittcamp dies
  • Fortune Brands Inc Dividend Declaration
  • Canadian Wineries risked losing brands over bulk wine fiasco: expert
  • Squeezing more crop out of each drop of water
  • Liquor Tax Hike Will destroy over 1000 jobs in Wisconsin's Hospitality Industry
  • Vincor Canada to Acquire the Agency Rights for Constellation Brands Products from Churchill Cellars
  • Oz: Queensland grapegrowers to benefit from phylloxera exclusion zones
  • NZ: Bank-squeezed Kahurangi ordered to pay up over bitter grape row
  • CT: 'Dream' winery opening in Preston
  • MD: Retreat Hill Winery opens with a splash – literally
  • Binny's Beverage Depot to buy Sam's Wines and Spirits
  • Edgy Winegrowing at Unified Symposium
  • Christian Louboutin and Piper-Heidsieck Team Up
  • Local filmmaker puts Paso Robles Wine Country on the Web
  • UK Celebrates Cheap Champagne
  • Canada: High-tech labels coming to Chateau des Charmes wine bottles
  • WINE CREEK HIRES MICHAEL BARRY AS NORTHEAST REGIONAL SALES MANAGER
  • Cahors seeks to strengthen Malbec connection
  • Winemaker Vincor discounts Olympic wine for switch to VQA by 2010
  • Use of Babydoll Sheep to Control Weeds to Highlight Grape Growing Workshop
  • Caves and crush pad make up working winery for Hourglass
  • October 08, 2009
  • Constellation Settles With FTC Over Deceptive Wide Eye claims
  • Calif Ag board to hold water talks in Fresno
  • Unsold inventory stymies Oregon's wineries
  • Hong Kong becomes Sotheby’s number one
  • Zagat: New Yorkers cut back on dining out
  • Constellation Closes Widmer, RIT Likely to Use Property
  • Oz: Electrodialysis: Viable alternative for cold stabilisation
  • Heimoff: Pali-zation, or Signs of the times?
  • Epoch Estate Wines Names Matt Hobbs General Manager
  • Amarone’s fine wine image under threat
  • Burgundy Wineries Announce Key Acquisitions
  • Asia 'pulling fine wine through recession'
  • Lake County People's Choice Wine Award Winners
  • NV: Bank collapse delays winery
  • Oz: U of Adelaide launches new V & E Bachelor degree
  • Nov. 18 Tulare conference offers advances in agricultural technology
  • Washington Expands Vineyard Research
  • Boston man pleads innocent to stealing $20,000 bottle of wine
  • Vintage Wines Fetch Record Prices in Hong Kong
  • Novy Family Wines Turns "Sideways" Grape, Inside Out
  • WA: Bumper crop in, bottles of Peninsula-grown wine not far behind
  • CIVB declares Bordeaux 2009 'magnificent'
  • County rethinks weddings at Napa wineries
  • Dr. Cliff Ohmart Joins SureHarvest
  • Discover Wines and Eye Candy in Lake County
  • Alcohol companies breach ad ban
  • Property to become winery
  • MI: 2009 vintage looking to be cold and late
  • Embassy Suites - Napa Valley To Operate Food & Beverage Outlets

  • ================= CONTACT DATA ====================
    Lewis Perdue
    670 W. Napa St., Suite H, Sonoma, CA 95476
    Phone: 707-326-4503, fax: 707-940-4146
    Email: lewis.perdue@wineindustryinsight.com