Californian bulk wine market reached "equilibrium" claims report
Heavy vintages in recent years have meant that California’s bulk wine market has been somewhat oversupplied, depressing prices with the exception of Napa Cabernet.
But after the relatively light 2016 harvest, the bulk market became more balanced in 2017, according to Silicon Valley Bank's Rob McMillan, writing in his annual wine industry report.
And with another average harvest in 2017 of approximately 3.8 million tons for California, prices offered and volumes demanded should also be in balance, he said.
Chardonnay has seen “impressive” demand growth and declining stocks, which may drive demand and price higher.
“Cabernet, while still growing in demand, has probably reached a pause in price creep, with slowing consumer growth rates overall and increasing availability of juice.”
There appears to be a disconnect, he added, between what sellers think they can achieve and what wineries believe they can sell that juice for in the open market.