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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.
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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.
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:
- 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.
- Everyone in the wine industry including suppliers, has been impacted by the recession and that affects advertising decisions.
- 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.
|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
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 Sothebyâ€™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
Amaroneâ€™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