Biz Buzz: County grape crush sees growth

Nearly 10 percent more wine grapes were crushed in San Luis Obispo and Santa Barbara counties in 2010 compared to last year, thanks primarily to growth in red varietals, according to the preliminary Grape Crush Report released Thursday.

Overall, California’s most recent grape harvest — the third largest on record behind 2005 and 2009 — was down about 3 percent from the previous year, the state Department of Food and Agriculture report stated. More than 3.98 million tons of grapes were crushed, about 3.58 million tons of those for wine.

“Everybody was a little surprised that we had back-to-back overall state crops that were bigger than expected,” said John Ciatti, partner in San Rafael-based Ciatti Co., the world’s largest grape and wine brokerage.

“The wine industry — both growers and vintners — did a very good job of making good wines this year in a challenging environment,” he added. “The last three years have been some of the toughest weather we’ve had.”

Nearly 238,284 tons were harvested last fall in District 8, which includes the two local counties. The total of white grapes crushed here dropped more than 8 percent to 75,080 tons. Red varietals, meanwhile, jumped nearly 21 percent to 163,203 tons.

“Several red varieties were well above average, led by cabernet sauvignon, syrah and merlot,” said broker Matt Turrentine, who lives in Atascadero and handles Central Coast sales for Novato-based Turrentine Brokerage. “It’s always good to have a bigger crop, but it’s especially helpful when prices are soft.”

Statewide, the average price per ton among all winegrapes crushed in 2010 dropped to $572 from $612 the year before.

In District 8, the average price for all white grapes sold fell nearly 9 percent to $1,096 per ton in 2010. For all reds, the average dropped almost 14 percent to $1,014.

For bargain-hunting consumers, lower prices are terrific news. The fastest segment of sales growth continues to be for wines priced below $10.

But many Central Coast growers who were forced to sell on the spot market last year received considerably less than the average — often about the same price per ton as growers in the Central Valley, where it’s less expensive to run a vineyard.

“In the Central Valley, those prices are actually profitable,” Turrentine said. “On the Central Coast, they’re not.”

The good news is that he sees prices rising for most varietals in 2011.

“Demand remains strong for grapes and wine on the Central Coast, however, average prices are still well below the pre-recession levels,” he said. “We don’t think anything’s trending down at this point. It’s just a matter of how quickly it’s trending up.”

There’s still a good amount of chardonnay from the “huge crush” in 2009 on the bulk wine market, Ciatti said. But in 2010, few grapes went into bulk wines, which is a good sign that demand should be strong for most varietals in the coming year.

Turrentine even predicts shortfalls for popular reds, such as cabernet sauvignon and merlot, might be around the corner.

“In general, I’m optimistic,” he said. “Inventories are coming down and prices are going up.”

— Raven J. Railey

Do you have news for Wine Notes? E-mail rrailey@thetribunenews.com or call 441-4556.