Turrentine, one of California's leading grape and bulk wine brokers with an international operation now, issued a revealing report on California's 2007 crop now that the official figures are in.
Despite California growers' best efforts to supply Pinot Noir, the hottest variety in the US currently, the total amount produced in California in 2007 was 16%, of more than 14.5 millions bottles' worth, less than in 2006. The shortfall is most acute in the most desirable appellations, both in Santa Barbara County and, especially, in Sonoma County where the crop was down nearly 24%.
Although California has nothing like the severity of shortage of Australia, total volumes produced in 2007 in the prime Coastal areas were down on 2006. In a climate of unparalleled consumer demand, blenders are presumably relieved that at least the Central Valley, supplier of California's most basic wine, produced more in 2007 than in 2006.
Chardonnay, of which there has been a glut in recent years, is now in demand. Steve Fredricks of Turrentine reports lyrically, "Demand is now well ahead of supply for Chardonnay from Santa Barbara County, Russian River Valley and the Carneros district of Napa and Sonoma. The supply of Chardonnay from other regions in the state – and from around the world – has also tightened up. Chardonnay has emerged from many dark years of excess into the sunlight of abundant demand. The demand for California Chardonnay is the strongest it has been in at least eight years."
But the slack will presumably be taken up to a certain extent by Central Valley Chardonnay of which enough was produced in 2007 to fill 52 million more bottles than in 2006, while Coastal Chardonnay volumes dropped by 8 million bottles in 2007 compared with 2006.
Cabernet Sauvignon production was flat in the state as a whole and slightly up in the variety's heartland, both Napa and Sonoma Counties. Fredricks again: "Cabernet Sauvignon is perhaps the most respected red wine variety grown in California and around the world. But, respected or not, both California and the rest of the world developed a big excess of Cabernet Sauvignon. The combination of high quality and average yields in California's 2007 harvest is going a long way to bring Cabernet Sauvignon supply back into balance with demand. Supplies will most likely continue to tighten over the next several years because sales are growing rapidly, but there have been very few new plantings to keep up with increasing demand."
Merlot production fell 9% in 2007, the equivalent of 25.5 million bottles of wine. Sauvignon Blanc was down 4%, enough to fill 3.8 million bottles of wine.
"Some wine critics are rough on Merlot," commented Fredricks, "but American consumers love it because it is generally a softer red wine, flavourful and easy to drink. Sales have been growing at about 5% per year but winery inventories swelled after a massive crop in 2005 and an above-average crop in 2006. The 2007 harvest delivered the best possible combination: high quality, which stimulates demand, and lower yields, which trim swollen inventories. The Merlot excess could turn into a shortage over the next 12 to 24 months."
California growers have been jumping on the bandwagon named Pinot Grigio (sic) so that it is the fastest growing white variety in the entire US. Volumes produced in 2007 were slightly up on 2006.
Turrentine make their pennies by broking wines so it is in their interests to stimulate sales by forecasting doom. Nevertheless, their summary of the current situation may interest you as a wine drinker: "Balancing supply and demand is always difficult in the wine business. Consumer demand can change quickly but vineyards change very slowly, with a period of about four years from planting to first production. Mother Nature also likes to keep things interesting by producing an unpredictable sequence of huge harvests (like 2005) and lighter harvests (like 2004). For the most part, the wine business was glad to see a moderate and high quality crop in 2007. Consumer thirst for California wine, especially premium wine, is very strong and California could soon move from the problems of excess to the challenges of shortage.
"Prices reported in the Grape Crush Report [the official report from the agricultural census takers] declined for Chardonnay, Cabernet Sauvignon, Merlot and Zinfandel in the Northern Interior as older, high-priced contracts ended and the grapes were resold at lower prices. So far, however, demand for 2008 grapes is strong and prices are inching upwards again. Competitive international supplies have tightened but everyone is also keeping an eye on the economy and the weather."
So don't forget, folks, always keep an eye out for looming thunderstorms and tax hikes.