Issue link: http://read.dmtmag.com/i/100792
AT A GLANCE + With a tight supply market, negociants must be more creative in supplying when supply is up. As time goes on, some invest in grapes or in longer-term supply contracts. Some who started as negociants still may not own their own winery, but they source similar to a winery. In other cases, some may produce less wine, some may go to the sidelines until conditions change, and some may change their appellation sourcing to maintain price levels.��� Proctor said the market should continue to tighten for at least the next two to three years, and as a their brands. + Negociant wine brands that did not secure grape/wine supplies with long- term contracts may have trouble maintaining production levels and pricing. + California���s larger 2012 grape harvest enabled spot-market deals at lower prices than earlier in 2012, but this will not affect the long-term tight supply market. + Non-varietal red blends are a growing market option for negociants, providing flexibility to source and blend supplies while maintaining price-points. erate cash flow. More recentbe down more than 6%, ly, he observed, ���We saw resulting in a worldwide shorter crops in 2010 and shortage of up to 1.3 2011, and have since billion bottles of seen significant price wine in 2013. increases for grapes Although it���s still and bulk wine.��� too early to see Ne w v i n e y a r d the full effects of planting is not a tight supply, a expected to keep shakeout of some up, or catch up, negociant brands with market demand is likely to occur, Glenn Proctor of Ciatti Company for several years, along with changes says major price increases are so the overall grape in their production occurring due to smaller crops market should be levels and pricin 2010 and 2011. balanced-to-tight ing ��� particularly for the foreseeable for those who did future. In addition, the 2012 harvest not plan ahead. Steve Fredricks of was down significantly in Europe, Turrentine Brokerage observed, and production was below aver���This is part of the standard cycle age in Argentina and New Zealand. we go through as market condiSome reports have projected that tions change. We see an increase overall worldwide production will in the number of negociant brands w w w. v w m media.com Steve Fredricks of Turrentine Brokerage says a shakeout of negociant brands is likely. J a n - F e b 2 0 13 | V I N E YA R D & W I N E RY M A N A G E M E N T 71