Grape prices expected to remain strong in 2013

Source: THE PRESS DEMOCRAT

By CATHY BUSSEWITZ

January 17th

North Coast grape growers and the wineries that buy their fruit have achieved a rare state of balance.

After a strong year for grape prices in 2012, Sonoma County's largest crop should hold its value in 2013, said Glenn Proctor, partner with San Rafael grape brokerage Ciatti Co.

"What we're seeing here is a relatively stable market," Proctor told a group of 500 growers Thursday at the 22nd annual meeting of the Sonoma County Winegrowers. "In Sonoma, North Coast, we think it's going to remain strong."

Grape buyers surveyed by Ciatti Co. said they expect to buy more grapes this year than they planned at the same time in 2012. They anticipate paying the same or slightly more for their grapes than they did last year.

"We think there might be some price pull-back on certain varieties because we had such a large crop, but we're not seeing that just yet," Proctor said. "Most buyers are discussing re-signs and long-term contracts."

The impact of several years of short crops followed by high grape prices led many wineries to look outside the region for grapes. This year, wineries will import the equivalent of 40 million cases of bulk wine, Proctor said.

Normally, when the wine industry reaches a point where grape demand outstrips supply, vineyard owners plant more grapes, said Rob McMillan, founder of the wine division at Silicon Valley Bank.

"We're not even up to replacing what's being taken out at this point," McMillan said. "Why don't we see a lot of planting happening? Because we've got a lot of imports."

To raise the region's profile nationally and internationally, Sonoma County Winegrowers has been collaborating with Sonoma County Vintners and Sonoma County Tourism on a joint advertising and marketing campaign, said Karissa Kruse, marketing director for the grape growers group.

The group plans to produce a series of videos to educate the public about grape growing, she said. It also is launching new efforts using social networks LinkedIn, Facebook, Pinterest and YouTube.

"I want to raise the bar on our positioning," Kruse said. "We have a great, great story to tell about who we are and where we've been. I don't want to just represent our 16 board members. I want to tell the whole story."