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Pinot Gris gains at Chardonnay’s expense

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We all know that Chardonnay is the leading wine grape in California, in terms of both acreage and sales, right? So tell me, did planted acreage go up or down last year?

Answer: Down. After hitting an all-time high of 94,854 acres in 2013, acreage dropped to 94,279 in 2014, a reduction of 575 acres. That’s not very much, but it’s a reduction nonetheless, and calls for further analysis. So let’s turn to individual coastal counties—Chardonnay’s premium home—for a closer look.

The two counties with the highest concentrations of Chardonnay grapes, Monterey and Sonomoa, together accounted for about half of the total loss: 226 acres between the two of them. Throw in Mendocino, Napa and Santa Barbara—all down—and it adds up to almost the entire statewide loss. So why are these prime coastal counties retreating from Chardonnay?

Well, grape growers are in the unique position of having to understand where the market is going five, ten years down the road. Growers don’t like surprises: they were caught with their pants down when Moscato unaccountably exploded, and they had to rush to catch up. (In 2007, there were only 101 acres planted statewide of the leading forms of Moscato: Moscato Gaillo, Muscat Blanc, Muscat of Alexandria and Muscat Orange. By 2014, there were 8,414 acres, an increase of more than 8,000 percent.) Many must be the conversations around growers’ tables concerning what consumers will be drinking in the year 2020; we have to conclude, given the reduction of coastal Chardonnay, however slight, that the conclusion is that people will be drinking less Chardonnay.

And more of…what? Well, presuming that they will still want white wine, what could it be? Statewide planted acreage of Sauvignon Blanc also was down this year from last year, suggesting growers don’t particularly believe in its future. Pinot Gris, on the other hand, was up—way up in acreage, 9.1% last year, and a whopping 80% more than in 2006. If Pinot Gris was on the futures market, someone would have made a bundle had they bet on it nine years ago.

Pinot Gris now is the third most widely-planted major white wine variety in California, behind only Chardonnay and Sauvignon Blanc (not counting the inferior French Columbard, a staple of jug wines), and is only 1,701 acres behind Sauv Blanc; at the current rate, Pinot Gris will actually surpass Sauvignon Blanc in a few years. Of its statewide total of 15,009 acres, 1,930 acres, or about 7.8%, are non-bearing—that is, they’ve been planted but are too young to bear fruit. That represents a hopeful belief on growers’ part.

But wait, there’s more. Where are these growers planting all that Pinot Gris? On the coast, where it makes the best wine? Nope. In the interior valleys, Sacramento and San Joaquin, which account for 1,866 acres of those 1,930 acres of non-bearing grapes. I believe that we’re going to be seeing an increasing amount of inexpensive California-appellation Pinot Gris and Pinot Grigio on store shelves and in family-style restaurants in the coming years.

And why not? Since the Great Recession Americans have been more budget-minded than in many years. Even here in booming San Francisco, where the streets sometimes seem like they’re paved in gold, the San Francisco Chronicle reported yesterday on a “post-recession chill on holiday sales”; retailers “hope they can grow sales…in the low single-digits,” if, in fact, they can grow sales at all. The article quoted a retail expert: “There will be no surprise boost in spending [this holiday season]. Retailers are just grabbing market share at the expense of someone else.”

Simply put, consumers just don’t have as much money as they used to, a situation that may turn out to be the new normal for years to come. So, with Chardonnay averaging $860.00 per ton of grapes in California, and Pinot Gris averaging $580.30, it’s obvious wineries can sell a bottle of Pinot Gris a lot more cheaply than a bottle of Chardonnay. And that, in the new economy, makes all the difference.

  1. “… After hitting an all-time high of 94,854 acres in 2013, acreage dropped to 94,279 in 2014, a reduction of 575 acres. That’s not very much, but it’s a reduction nonetheless, and calls for further analysis. So let’s turn to individual coastal counties — Chardonnay’s premium home — for a closer look.

    “The two counties with the highest concentrations of Chardonnay grapes, Monterey and Sonomoa, together accounted for about half of the total loss: 226 acres between the two of them. Throw in Mendocino, Napa and Santa Barbara — all down — and it adds up to almost the entire statewide loss. So why are these prime coastal counties retreating from Chardonnay?”

    Two different explanations might be at play.

    575 acres is sixth-tenths of one percent of the base of 94,854 acres.

    That’s a rounding error.

    Some vineyards may have been taken out of production and replanted due to phylloxeria or other vine diseases.

    And some vineyards may have simply “given up the ghost.”

    A trend earlier cited by Wine Spectator:

    “West Coast Wineries Are Up for Sale — Quietly”

    (Summary: A wave of recent deals show investors see opportunities in wine, while owners see an exit strategy.)

    Link: http://www.winespectator.com/webfeature/show/id/49221#.UoI_yAMMzG8

    SELECTIVE EXCERPTS:

    “… While small wineries can succeed by selling most of their inventory direct to consumers and large producers have muscle with wholesalers, those in the middle — annual production of 5,000 to 15,000 cases, for example — can’t get much attention from distributors unless the brand is hot.”

    AND:

    “… ‘I’ve never seen more wineries for sale in California than there are today,’ [said Charles Banks, who through investment groups such as Terroir Selections purchased Santa Barbara Syrah specialist Qupé in October and Napa veteran Mayacamas Vineyards in April.] … Banks … estimates that between 30 to 50 percent of California wineries are either in financial difficulty or aren’t as profitable as they could be.”

  2. AND SEE THIS RELATED NEWS RELEASE:

    “Over the last year [2012? 2013?] there have been more than $335 million in sales of vineyards, vineyard estates and plantable land in Napa and Sonoma Counties. This doesn’t even take into account confidential sales or wineries.” .” – David Ashcroft Real Estate

    The original quote link from Vintroux Real Estate (“a boutique firm located in the heart of wine country with an immediate focus on Sonoma and Napa Counties, and broader reach throughout California. Our expertise covers homes, luxury estates, vineyards and wineries.”) . . .

    http://vineyardandwinerysales.com/article_napa_sonoma_vineyard_wine_country_real_estate_november_2013.pdf

    . . . is no longer active.

  3. Daniel Robledo says:

    Very good observations, Mr. Henry. One thing for sure is that changes will always occur. On the positive side, changes in ownership of wineries and vineyards often bring new ideas, updates, and new opportunities for people with the right qualifications.

    As a Viticulturist specialized in the production of high quality wine grapes in Napa, I’ve seen many changes during the 47 years of working for vineyards and grape nurseries.

    The new trend now is to plant Cabernet Sauvignon, some Malbec and some Petit Verdot in our area. I’ve been told by some of my customers that they have a surplus of Chardonnay, Merlot, and Pinot Noir.

    The other possible factor in many people not drinking wine, is the exorbitant costs of a DUI. It’s great for driving safety, but less wine consumed.

  4. Ann Kraemer has been flirting with Greco (Bianco) in the warmer, Sierra Foothills with good, balanced results. Wouldn’t mind seeing more of it planted if our annual temps keep increasing.

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