Central Coast Wine Grape Market: What You Need to Know for 2023

Understanding the Current Market - Insights for Buyers and Sellers

by Amanda W. Higgins, featuring Audra Cooper

Over the past few years, the wine grape market and growing environment has been riddled with trials and triumphs. 2023 looks to continue that pattern on California’s Central Coast. 

Factors like cool weather, record rainfall (resulting in unpredictable crops), a looming recession, rising interest rates, and slowing market sales have made predicting the future supply and market environment an enormous challenge. 

Mid year (June & July) marks a critical time for both wineries and vineyards.  Wineries are critically analyzing actual sales volumes and projections as well as current inventories. Each SKU is critically evaluated to ensure continuity of supply and quality.  Evaluations and forecasted plans are adjusted based on anticipated trends and communicated to winemaking and vineyard partners, resulting in needs, adjustments or perhaps new acquisitions. 

On the vineyard side, crop loads are evaluated based on sizing and stages of development: An abundant crop may result in farming modifications or additional marketing of fruit, while a lighter crop load could indicate interactions with current customers or perhaps an increase in price for new prospects.

No matter if you are a winery or vineyard, this is a critical period!  Which is why we recently caught up with our friend Audra Cooper, an industry veteran and the Central Coast Grape Broker for Turrentine Brokerage in California. Our goal was to gain her perspective on the current market environment, yields within her territory, the upcoming 2023 vintage as well as tips and tricks to succeed in any environment. 

Turrentine Brokerage was established in 1973, giving them 50 years of experience as wine and grape brokers.  For the past 17 years, Audra has been in the Wine Grape sales arena, matching buyers and sellers in the marketplace.  Leaning on the vast experience and historic knowledge of the Turrentine team—all with the goal of alleviating excess—she oversees the Central Coast territory from Temecula to Livermore.

Amanda: What is your perspective on the 2023 Grape Market?

Audra: It's been a dynamic year so far. On the grape side, for the first half of this year we saw moderate to higher demand within the coastal regions, then a slow down in April and May.  Wineries are looking at crop estimates before they commit to additional grape purchases. There is still a sizable amount of inventory in bulk wine—21M gallons—with the peak volume being 23M gallons of bulk wine in March of 2023. Despite being able to move some inventory, it feels as if we are in an excess supply position and the future may be challenging.  We’ve seen a decrease in retail sales for 3 years in a row (according to Nielsen data). 

Amanda: Can you make a prediction on crop estimates for 2023?

Audra: If you’d asked me in late June, I was fairly convinced that 2023 would be a sizable crop, perhaps average + 15% for the entire state of California.  However, the unseasonably cool weather and lack of sunshine has left most vineyards 2-3 ½ weeks behind the normal growing season.  Resulting in late and extended bloom times, this created some shatter and chicks and hens.  As of today (July 6th), we are barely starting to size.  My predictions went from average +15% to average +10%, and today I’m predicting average at best in most Central Coast regions. .

With that said, I am seeing a large amount of variation between varietals, regions and even blocks within the same ranch.  This may be one of the most difficult years to predict, and amongst professionals there has been much debate regarding crops and volumes.

Amanda: From your perspective, what are the bright spots?

Audra: Over the past several years the Central Coast region has seen a massive evolution in regard to vineyards and winemaking quality.  Ranches are being redeveloped with newer plant material, vineyard management companies are more precise, and winemaking has continued to improve.  For example, Paso Robles Cabernet Sauvignon has moved from a lighter style to a more blue and black profile that matches consumer styles.  Combined with collective marketing efforts, like the Paso Robles Wine Country Alliance, regions are building market share and demand along with improving quality.

Meanwhile legacy sites and families like Bien Nacido and the Miller Family, continue to do amazing work with varietals like Chardonnay as seen on the cover of Wine Spectator’s July issue. 

Over the past several decades one constant has been innovation and trial.  If you look back at some of the most difficult periods in recent history you will see that this is when producers have become the most innovative and as a result developed additional market share.  Whether it’s focusing on current programs or developing an entirely new direction, I have confidence in our industry.

Amanda: Can you provide tried and true “Tips & Tricks” that will be relevant in any market?

Audra:

#1. Information is key. Whether you are in an up or down market, the number one thing is to have knowledge and understanding of the marketplace and prepare to be proactive.

#2 Usually your first offer is your best offer. Trying to wait for the market to improve rarely works.

#3 Consider values other than price alone.  When considering an offer or potential partnership, make sure your values align with the other party, consider flexible payment terms, delivery location, harvesting method, brix levels or multi-year commitments.  Sometimes price is just a portion of the overall negotiation.

#4 Develop a relationship with a trusted professional, some one who understands the market and has access to both buyers and sellers,…a company who can help you navigate short term and long-term solutions.

It’s important to communicate that this perspective offers a moment-in-time analysis and is far more accurate than asking your Magic 8 Ball. The truth of each growing season is, “It aint over until it’s over!”  Mother Nature and our consumers may very well throw us a curveball. But one thing is certain, failing to plan is planning to fail.  Make sure you evaluate your company needs, take time to do your best guess on projections and work with a trusted professional.

Wishing you all the best!

Amanda

Turrentine Brokerage is a premier Grape and Bulk Wine Brokerage specializing in both domestic and global bulk wine sourcing as well as strategic brand partnerships. Established in 1973 by Dan and Bill Turrentine with a mission to assist grower and winery clients with supply challenges and opportunities and to provide the best, data-driven information and analysis to help clients avoid supply problems and make the most profitable choices in a complex and constantly changing business.

For 50 years Turrentine Brokerage has stayed true to this goal, developing a team of grape and wine brokers who lead the wine business not only in sales volume but also in understanding supply cycles and evolving market conditions. For more information visit them online www.turrentinebrokerage.com To reach Audra Cooper audra@turrentinebrokerage.com or (805) 400-9930

Amanda Wittstrom Higgins is a nationally-lauded thought leader and business strategist with an expertise in creating future-forward and foundational success. She is the Principal of Full Cup Solutions, a full-service consulting firm for the agriculture and beverage industries whose businesses are seeking innovative strategy, long-term success and greater accountability. Tapping a deep knowledge of sectors including marketing, sales, operations and employee development, as well as an insight on what motivates and attracts consumers and employees of all ages, the business is propelled by Amanda’s own core principles of crafting products with soul, enacting industry change, creating opportunity for others and honoring and understanding of the agricultural world. Connect@fullcupsolutions.com or (805) 530-5533