Allied Grape Growers, 2014. All rights reserved. The 2014 Crush – What Happened to the Market? SJVWA Annual Meeting And Industry Forum Jeff Bitter, Allied Grape Growers Matt Towers, O’Neill Vintners and Distillers Greg Magill, Ciatti Company November 21, 2014
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What Happened to the Market? - Bitter, Towers, Magill
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Allied Grape Growers, 2014. All rights reserved.
The 2014 Crush –
What Happened to the Market?
SJVWA Annual Meeting
And Industry Forum
Jeff Bitter, Allied Grape Growers
Matt Towers, O’Neill Vintners and Distillers
Greg Magill, Ciatti Company
November 21, 2014
Allied Grape Growers, 2014. All rights reserved.
Panel Discussion Outline -
•The goal will be to answer this -
• What happened to the market in 2014 and why was
this year so different from recent crop years?
•Three sections developed to address this
• Supply – SJV and worldwide
• Imports and availability/competition
• Shipments at the lower end of the market
•Closing Discussion:
• What is the future of the SJV winegrape business, and
do any competitive advantages exist that help secure
our future?
Allied Grape Growers, 2014. All rights reserved.
Section 1:
Supply
Allied Grape Growers, 2014. All rights reserved.
Supply
0.00
0.50
1.00
1.50
2.00
2.50
2006 2007 2008 2009 2010 2011 2012 2013 2014Est.
1.471.58 1.59
1.741.83 1.80
1.88
2.03 2.00
Tons(in Millions)
SJV Winegrape Crush 2006-2014 Estimate
SJV Winegrapes
CAGR = 4.03%Record statewide harvests
Allied Grape Growers, 2014. All rights reserved.
•Winegrape Planting:
• 2012 plantings for <$7 per bottle is estimated by AGG
at 15,000 acres. Those will begin producing material
crops by next harvest.
• 2013 planting for <$7 per bottle is estimated by AGG at
20,000 acres. Those will begin producing material crops
by 2016.
• 2014 planting for <$7 per bottle will decline significantly
and is expected to be <5,000 acres. AGG annual
nursery survey data will be released in January of 2015
to confirm.
•Winegrape Pullouts
•Estimated by AGG at 15,000-25,000 acres over this
winter, preceding the 2015 harvest
Supply
Allied Grape Growers, 2014. All rights reserved.
Supply
•What’s the impact of current supply on the CA Wine Market?
Year
TOTAL CA WINE GRAPES
Harvested (000,000'S)
EQUIVALENT CASES
(000,000'S)
CALIFORNIA CASES
SHIPPED (000,000's) LONG/(SHORT)
2010 3.58 243 243 0
2011 3.35 228 256 -28
2012 4.02 273 250 23
2013 4.25 289 260 29
2014E 3.9 est. 272 270 2
25.6
• Based on shipments of CA wines over last 5 yrs, CA is
in a structurally long position ~ 25.6 million cases
• Equivalent of about 365,000 tons.
• Equivalent of about 36,000 acres (using 10 tons/acre)
Allied Grape Growers, 2014. All rights reserved.
International
• Decreased production in most countries (AUS,
ARG, CH*)
• Everyone wants into US market; Casegoods are
the priority
• Vine removals in Europe
• New plantings everywhere
Supply
Allied Grape Growers, 2014. All rights reserved.
Supply
0
1
2
3
4
5
6
7
8
9
Ton
s in
Millio
ns
2012
2013
2014
Allied Grape Growers, 2014. All rights reserved.
Section 2:
Imports
Allied Grape Growers, 2014. All rights reserved.
Imports
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
2008 2009 2010 2011 2012 2013 Tracking2014
Imported Wine - Bottled and Bulk(In Millions of Cases)
Bulk Imports
Bottled Imports
Data obtained via the Gomberg Fredr ikson Repor t
Total-1%
Total+12%
Total+0%
Total+7%
Total+16%
Total-7%
-5%
+27% +92%
-2% +7% +3% -2% +3%
-20%+26%
+71% -25%
-1%
-1%
Total-1%
Allied Grape Growers, 2014. All rights reserved.
Imports
Allied Grape Growers, 2014. All rights reserved.
Imports
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15
Exchange Rates (Value to $1 U.S.), January 2011 - December 2014
Chilean Peso Argentine Peso Australian Dollar Eur o Br itish Pound