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9 8 V I N E YA R D & W I N E RY M A N A G E M E N T | M a y - J u n e 2 014 w w w. v w m m e d i a . c o m yield of 4.1 tons per acre. Consis- tent with 2009 survey results, yields are higher for pure growers than integrated operations, suggesting a stronger motivation among pure growers to maximize tonnage. ECONOMIC IMPACT Two survey responses stand out from the others and clearly indicate that growers will pursue strategies to increase production volumes while raising prices. Closely related is a strategy to renegotiate con- tracts. From these two points, it's clear that growers intend to capital- YIELD TRENDS BY REGION Overall yield averaged 4.6 tons per acre, which is a substantial increase from the 3.4-ton average yield reported in 2009. This amount includes both pure growers and integrated winery and vineyard operators, and it reflects 2012's very large harvest, particularly in California, where the average yield was 5 tons per acre compared with 4.1 in Washington state. On a separate basis, pure grow- ers had an average yield of 5.5 tons per acre; integrated winery and vineyard operators had an average ize on improved economic condi- tions and the growing demand for wine through strategies to increase their revenues and profitability. Given that California in particular has experienced two very large back-to-back harvests and there's currently an above-average supply of grapes, navigating these strate- gies may prove somewhat tricky. FUTURE GROWTH STRATEGIES Nearly 80% of participants said they planned to buy or sell a vine- yard, and close to 50% planned to work on succession planning over the next three years. Buying or selling a winery was a distant third response. Jeff Gutsch is a partner and wine industry national practice leader with Moss Adams LLP, one of the largest accounting, tax and con- sulting services firms in the Unit- ed States. He has been in public accounting since 1992. He cur- rently leads the firm's wine indus- try national practice, as well as its Santa Rosa and Napa offices. Steve Fredr icks, president of Turrentine Brokerage, joined the firm in 1991 as a bulk wine broker. Over the years he has established himself as an expert in the sale of grapes and wines in bulk and mar- ket cycles. Turrentine Brokerage brokers wine grapes from all Califor- nia regions and wines in bulk from California and around the world. Bill Rodda is vice president of Farm Credit Alliance, which manag- es both commercial and capital mar- kets portfolios. He has been with the company since 1981, and has been involved in many North Bay business financing projects. The Farm Credit System is a national network of banks and retail lending associations that provide financing, leasing, insurance and other finan- cial services to agriculture, agri- businesses and the nation's rural economy. Comments? Please e-mail us at feedback@vwmmedia.com. The survey was conducted online between May 20 and Aug. 15, 2013, with respon- dents from wineries and grow- ers in California, Oregon and Washington state. Operating and financial data was gener- ally collected for the fiscal or calendar year 2012. Winery participants ranged in size from those that produce less than 1,000 cases per year to those with 720,000 in annu- al case sales volume, with an average of 79,000 cases. Participant average revenue per case varied from a low of $69 to as high as $795, with an average of $222 per case (compared with $176 in the 2009 report). The operating criteria used to classify participants into meaningful groups included business model (integrated winery and vineyard, grower, negociant, and stand-alone winery), annual case sales vol- ume, and average price per case. Financial data collected in the survey included summa- ry balance sheet and income statement data. This informa- tion was used to produce a variety of financial ratios and other important performance measures. The 2013 report provided common-size finan- cial statements based on case volume, average price per case and winery business models. Also included were separate common-size financial state- ments for growers. Survey participants received a complimentary copy of the complete 2013 Wine Industry Benchmarking Report. For all others, the full report is avail- able for $495 through www. mossadams.com/winesurvey. ABOUT THE SURVEY Advertise Now 707.577.7700 tise Now tise Now 707 577 Online In Print e In In In