Is California Being Faced with a Grape Shortage?

Is California Being Faced with a Grape Shortage

Grape growers in California finally have something to cheer about—grape prices are going up. But what do those higher prices mean for consumers? Winery owners are trying to cut costs so they can keep prices low at a time when drinkers still want value.

After nearly three years of sluggish sales and an oversupply of wine, vintners have cleared their cellars of older vintages and are looking to increase their grape purchases. But two small harvests and an absence of new plantings mean they are competing for a smaller amount of fruit.
In order to guarantee grape supplies at a set price, larger producers like E. & J. Gallo are actively signing long-term contracts with vineyard owners.

At the height of the recession, California’s wine industry faced an excess of wine. Sales of bottles priced at $20 and above slumped as consumers traded down to cheaper brands. Winery cellars backed up with unsold wines as restaurants and retailers tried to move existing inventory. Many winemakers had to change their tactics to stay afloat.

Vintners attributed the surplus of wine during the recession to slow sales, not an excess of grapes. “The reasons for these oversupplies have been primarily economic, not due to particularly bountiful harvests,” said Cameron Hughes, founder of the eponymous négociant, which purchases surplus juice from wineries and bottles it under its own labels.

Click here for the full article from the Wine Spectator.

My Thoughts…

I can confirm this shortage first-hand, as I’ve been speaking to numerous wineries in California over the past few months (mainly the smaller guys). From what they’ve been telling me, many wineries saw the downturn in the economy coming, and cut back their production to such a level that they’re actually running out of wine. If the larger wineries with all the cash are able to secure long-term contracts, there may indeed be a significant shortage for many smaller producers.

The solution, although I’m obviously not a winemaker and I hate playing Monday morning quarterback, is for the smaller wineries to think a little more outside the box. Consumers are willing more now than ever to experiment with more “off the wall” grape varietals. If a winery is faced with a grape shortage that they see potentially extending into the long-term, now is probably the perfect time to produce a wine(s) from lesser known grapes that are in lower demand. Just my 2 cents.


  • March 9, 2012

    Jon Bjork

    We definitely are seeing more demand for Lodi winegrapes this year than we’ll be able to meet as a region. I know one person at a local custom crush facility that’s been calling around for Zin and even Cab for weeks now, but is lucky to get a few tons committed – and that’s only for what used to be outrageous prices around here. Most of the growers are telling wineries they need to see the fruit set before they’ll commit to any more allocations or contracts.

    On the idea of pursuing off the wall grape varieties, unless it’s a grape that has recently gone out of favor, then most vines in excess of what could be sold have probably already been yanked or budded-over to other popular varieties. Carignane, for example, can make some pretty nice wine from the right vineyards, but people don’t want it and some very old vines have been replaced over the last couple of years.

    Not to crush that idea, because some of the most exciting new wines aren’t using mainstream varietals, but I wouldn’t bet the winery on a good supply of off the wall grapes.

  • March 12, 2012

    Kris Chislett

    Thanks for reading and indeed taking the time to comment, Jon. You offered some great points. 

    Like I said, I’m not a winemaker and so I can only offer marginal insight into topics like this. 

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