Conditions in California’s growing areas were largely normal through June into early July – perhaps slightly on the erratic side, with degree-day accumulation highly variable between areas and some humidity and/or shatter in evidence. It goes without saying that water supplies are a concern across the state. 

Phonologically, overall, the timing of vine development appears to be similar to last year, though areas of the Central Coast – namely Monterey – are potentially lagging behind what was already an unusually late year in 2021 (picking in some areas lasted into November). Degree-day accumulation has been variable, with the King City area of Monterey well behind last year while accumulation in Paso Robles has been ahead. 

Lodi has largely experienced normal conditions interspersed by the odd bout of humidity or cloudiness. Timing there is similar to last year, though degreeday accumulation is behind in western Lodi. Up in northern Lodi and the North Coast, some shatter has been in evidence but most vineyards are looking healthy. Illustrating the patchy degree-day performance, accumulation has been well behind last year in areas of Lake and Mendocino, but in line in the Santa Rosa area of Sonoma. 

Estimating the 2022 crop size with confidence at this stage, in the context of slightly erratic conditions after the localized frosts of mid-April, is still too much of a leap. The picture should be clearer by the end of July, when the first grapes are picked in the southern Valley. Crop uncertainty is a likely contributing factor in a recent slowdown in bulk wine and grape activity. Hesitancy is in evidence on both the buying and selling sides as the industry assesses crop potential, sales numbers, and the overall economy (annual inflation is running at 8.6%). 

In talking to wineries, we are gaining a picture of a difficult retail sales environment this year, as COVID–19’s pantry-stocking spike is replaced by a reining-in of consumer spending as inflation rises. NielsenIQ off-premise data for January 1st through May 21st shows a wine sales decline of 9.5% in volume and 5.7% in value versus the equivalent period of 2021. The smaller decline in value versus volume is a consequence of the outperformance of premium wines versus the rest of the market and the question mark is how well, or long, this will persist if consumers start making hard choices in the retail aisles. Retailers are trying to insulate their customers from inflation by requiring suppliers to hold price, so an increasing number of premium wine brands are becoming sourced from the Interior. Consequently, the premium sales category’s relative robustness does not necessarily benefit Coastal suppliers. 

Until the crop is clearer, so too consumer and economic patterns, the market will remain in flux, with buyers and sellers simultaneously able to think the upper hand resides with them. The Ciatti team stands ready to draw on its decades of experience to help you navigate the marketplace: Read on for more on the bulk wine and grape markets, and don’t hesitate to get in touch.

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Bulk Wine Grape Market