Vineyard & Winery Management

January - February 2012

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One of the biggest challenges is in the $25-$45 bottle range, but I think consumers will buy in that price range again as their economic situations improve. American con- sumers are drinking more wine in general, and that's a positive trend. V&WM: Do you see new vineyard planting increasing in the near term, given that grape demand is up? ND: I think it is time to plant more grapes in California, but I would not encourage people to plant on speculation. Growers need to plant smart, work with wineries that know what varieties they need, and plant with contracts. Wineries are not only offering planting con- tracts, but also offering long-term grape purchasing contracts. That was happening back in the late 1990s, but when the oversupply hit, the buying contracts went to year to year. Today, Allied has mostly multi- year purchasing contracts for mem- ber growers of three to five years. Almost everything going in the San Joaquin Valley has been done with planting contracts, and we've seen a fair amount of grapes going back in the ground. Over the past 10 years, 150,000 acres of grapes were pulled out in the San Joaquin Valley, about half of that Thompson seedless. There are still vineyards being pulled out, but these growers have other options. They can plant 3 acres of almonds for the same price as planting 1 acre of grapes, and almond prices are still higher than the prices of some grape vari- eties. We see some planting in the North Coast and Central Coast, but mostly redevelopment and replace- ment of older vineyards, commonly winery-owned vineyards. I hope to see more planting contracts, and long-term buying contracts at all price-points. V&WM: What do you see in vari- ety pricing and demand trends? For example, is moscato production meeting demand, or is there a dan- ger of excess in a few years? ND: I'm hoping variety pricing will pick up a little bit this year. Moscato production – including muscat blanc and muscat of Alex- andria – is not meeting demand. Last year I could have sold all the moscato I had three times. It's being planted on better ground, and we're getting good-quality pro- duction along with good tonnage. We're also seeing a lot of it being imported, and U.S. wineries are even producing American-labeled moscato that can have up to 25% foreign-produced wine. I don't think there is a danger of excess very soon, because right now it's selling 7 0 7 - 3 4 2 - 1 9 5 9 • W W W. S H E R R I E R O C H E L L E . C O M • S H E R R I E B L O N D I N @ G M A I L . C O M 90 VINEYARD & WINERY MANAGEMENT JAN - FEB 2012 WWW.VWM-ONLINE.COM

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