By Dawn Dolan Originally Posted December 7th 2017
Many speculations have been tossed around since the unusual fires broke out throughout California’s prized winemaking regions. What are your predictions? – Marla Priest
Globally, 2017 saw the lowest level of world-wide wine grape production in sixteen years, Glenn Proctor, Partner at Ciatti Company, told the audience in the opening minutes of the afternoon WIN Expo session Fires & Acquisition: Impact on the North Coast Grape Market. The hot summer affected overall yield, bringing in 3.85 million tons this year. Given the volatility of this agricultural product, Proctor said that “some buyers are changing strategies about how they source their crop.”
We’ve all read about the vineyard acquisitions going on of late. Joe Ciatti, of Zepponi & Company, confirmed that 2017 was “an unusual year.” According to Ciatti, “People are looking to buy vineyards. You have to have the supply to back up your labels.”
Any size vineyard over 20 acres may be of interest to a buyer, depending on what is planted. Wineries appear to be looking for clean properties, with only vineyard. “Non-grape assets are red flags, and not of interest,” Ciatti said (including other agricultural crops, guest houses, etc.), and he noted that his company expected 2018 to be an even bigger year for vineyard sales.
“The availability of grape supply has been challenging,” confessed Neil Bernardi, VP of Winemaking for Duckhorn Wine Company. “Recent acquisitions by larger players have taken a significant amount of custom crush off the market.”
For strong producers, motivating factors to buy vineyard properties can included a steady source stream of grapes, with the quality managed by the parent organization. “These purchases can provide more estate-owned fruit,” noted Bernardi.
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