WINE MARKET OUTLOOK - The Ciatti Company Market Up… · 2010-2015 % change planting spain 6 ↓ some replanting france 2 ↓ removed yield restrictions italy 8 ↓ china 42 ↑ some

WINE MARKET OUTLOOK

WWW.JFHILLEBRAND.COM @JFHILLEBRAND

John CiattiCiatti Company / Partner, Broker

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WINE MARKET UPDATE

CALIFORNIA & BEYOND

JUNE 21, 2018










DEDICATED BROKERS IN 8 COUNTRIES

GLOBALLY BASED TO BUILD YOUR BUSINESS WORLDWIDE










INTRODUCTION

• CIATTI CO 8 REGIONAL OFFICES WORLDWIDE

– WINE, GRAPES, & CONCENTRATE, ALCOHOL

– JOHN FEARLESS – HOPS, MALT, BARRELS

• GLOBAL PERSPECTIVE

• WORLD APPROACH – LOCAL KNOWLEDGE










GLOBAL WINE PRODUCTION

VINTAGEWORLD

PRODUCTION

2017 247 MHL

2016 260 MHL

2015 275 MHL

Total 33.0 Million Tons

USA 12%

Argentina5%

Germany3%

Australia6%

New Zealand

1%So. Africa

5%Portugal

3%

Chile4%

Rest of World

6%

France19%

Italy21%

Spain15%










GLOBAL ACREAGE TRENDS

COUNTRY2010-2015 %

CHANGE PLANTING

SPAIN 6 ↓ SOME REPLANTING

FRANCE 2 ↓ REMOVED YIELD RESTRICTIONS

ITALY 8 ↓

CHINA 42 ↑SOME VARIETALSGENERIC & TABLE

USA 4 ↑ REMOVAL OF GENERICS / PLANTINGS OF VARIETALS

ARGENTINA 3 ↑ MALBEC

CHILE 3 ↑CABERNET SAUVIGNON, SAUVIGNON BLANC, MERLOT, PINOT NOIR

AUSTRALIA 13 ↓ REMOVAL OF GENERICS

SOUTH AFRICA 2 ↓

GERMANY 0 ↔

NEW ZEALAND 12 ↑SAUVIGNON BLANC, PINOT NOIR










NORTHERN HEMISPHERE – EUROPE

ITALY FRANCE

SPAIN










ITALY HISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– PINOT GRIGIO, PROSECCO

– VARIETALS – TRADITIONAL SALES

• TIGHT INVENTORY – EFFECTS EVERYONE – BUYER?

• VINE ACREAGE: 2000 2012 2016

2.10 (MILLION ACRES) 1.90 (MILLION ACRES) 1.68 (MILLION ACRES)

850,000 HECTARES 769,000 HECTARES 680,000 HECTARES

’12 ’13 ’14 ’15 ’16 ’17

6.9 8.2 6.8 7.5 7.2 6.0










FRANCE HISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– ROSÉ, SPARKLING

– VARIETALS – TRADITIONAL SALES

• DECLINING DEMAND LOCALLY – EXPORT GROWTH TO U.S. & CHINA

• VINE ACREAGE: 2000 2012 2016



’12 ’13 ’14 ’15 ’16 ’17

6.3 6.4 7.2 7.3 6.6 5.6










SPAIN HISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– GENERICS, CONCENTRATE & GRAPE SPIRITS

• EXPORT TO EUROPE & CHINA

• VINE ACREAGE: 2000 2012 2016


1,200,000 HECTARES 1,000,000 HECTARES 1,000,000 HECTARES

’12 ’13 ’14 ’15 ’16 ’17

4.7 6.9 6.7 6.4 6.4 5.1










EUROPEAN OUTLOOK

• EXPORTS TO THE WORLD

– ITALY & FRANCE – CASEGOODS

– SPAIN – BULK SUPPLY

• SUPPORT & SUBSIDIZE – MARKETING

• HUGE CONSUMER – BUT DECLING CONSUMPTION

• REGULATIONS & TAXES










SOUTHERN HEMISPHERE

CHILE

SOUTH AFRICA

ARGENTINA AUSTRALIA










SOUTHERN HEMISPHERE

• VARIETAL LEADER

– MARKET DRIVER – PRODUCTIVE – NEWER VINES

• EXPORTS REQUIRED

– POPULATION LACKING

• GLOBAL PLAYERS

– PERSONALITY










ARGENTINAHISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– MALBEC

– GENERICS / CONCENTRATE – WHITE

• EXPORT TO EUROPE & CHINA

• VINE ACREAGE: 2000 2012 2016

593,000 ACRES 546,000 ACRES 556,000 ACRES


’13 ’14 ’15 ’16 ’17 ’18 Est.

3.0 2.9 2.6 1.9 1.8 2.3










CHILEHISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– CABERNET SAUVIGNON, MERLOT

– PINOT NOIR, SAUVIGNON BLANC

• FREE TRADE AGREEMENTS – MODERN VINEYARD – QUALITY

• VINE ACREAGE: 2000 2012 2016



’13 ’14 ’15 ’16 ’17 ’18 Est.

2.0 1.5 2.0 1.6 1.5 1.8










AUSTRALIAHISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– CHARDONNAY, PINOT GRIGIO

• NET EXPORTER – CHINA BIG MARKET – US & UK

• BALANCED MARKET TODAY

• VINE ACREAGE: 2000 2012 2016



’13 ’14 ’15 ’16 ’17 ’18 Est.

2.0 1.9 1.8 2.0 2.1 2.0










SOUTH AFRICAHISTORY: CRUSH TONNAGES (MILLION US TONS)

• KEY VARIETALS

– CHARDONNAY, CHENIN BLANC, BRANDY

• DEMAND FROM EUROPE – CURRENCY FLUCTUATES

• VINE ACREAGE: 2000 2012 2016



’13 ’14 ’15 ’16 ’17 ’18 Est.

1.6 1.7 1.5 1.5 1.6 1.4










ASIA

• CHINA: POPULATION 1.4 BILLION

– PLANTINGS 1 MILLION ACRES 1.2M

– MAINLY GENERICS & TABLE

– ALL USED INTERNALLY

– WORLD BUYER – GROWING WINE CONSUMER

• JAPAN/KOREA/HONG KONG

– POTENTIONAL GROWTH – TTP

• RUSSIA

– CHEAP BUYERS










USA










US WINE SHIPMENTS

• TOTAL USA

– DOMESTIC (-1%) (-0.6 M/CASES)

– EXPORTS (-9%) (-3.4 M/CASES)

• IMPORTS

– CASEGOODS (+3.5%) (+3.5 M/CASES)

– BULK (+5.6%) (+5.6 M/CASES)

• TOTAL US MARKET

– IMPORT & DOMESTIC (+2%) (+9.7 M/CASES)

SOURCE : GOMBERG-FREDERICKSON

YEAR END 2017










USA – TOTAL COUNTRY HISTORY: CRUSH TONNAGES (MILLION US TONS) – ALL GRAPES

• SALES

– DOMESTIC – 85% - GROWING

– EXPORT – 15% - DECLINING

• EUROPE/CANADA/ASIA

• GROWTH OF PREMIUMS – DECLINE OF VALUE BRANDS

• TRANSITION TO MEET DEMAND

• VINE ACREAGE: 2000 2016

(1,013,000 ACRES) (1,034,000 ACRES)

410,000 HECTARES 419,000 HECTARES

‘12 ’13 ’14 ’15 ’16 ’17

4.7 5.0 4.8 4.4 4.7 4.6










CALIFORNIA

2

3

4

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Ton

s in

Mill

ion

s

Winegrape Other Crush

4.01

STATEWIDE GRAPE CRUSH










CALIFORNIA85% OF US PRODUCTION

• WINE GRAPES – COAST VS. VALLEY

• GENERIC VS. VARIETAL

• GRAPE CONCENTRATE

– FOOD/BEVERAGE

– WINE BLENDING

• BRANDY & ALCOHOL

• CONSOLIDATION – BIG GET BIGGER










CALIFORNIA

Pinot Noir6%

French Colombard

8%

Zinfandel9%

Cabernet Sauvignon

14%

Chardonnay15%

Other Varieties

26%

Muscat of Alexandria

5%

Rubired 6%

Pinot Gris 6%

Merlot6%

KEY VARIETIES

• CHARDONNAY

• CABERNET SAUVIGNON

• PINOT NOIR

• PINOT GRIS

• SAUVIGNON BLANC

• MERLOT

• ZINFANDEL










CLOSING

• INVENTORY

– STABLE BUT CHANGING – WHO’S SELLING?

– BUYERS NEEDED

• CAPACITY

– TIME OF HARVEST

– STORAGE & PROCESSING

• QUALITY

– ULTIMATE KEY

• COMPETITION

– OTHER BEVERAGES

– CANNABIS

• COMMODITY CYCLES – ALWAYS CHANGE










CIATTI REPORTS / PUBLICATIONS

- CALIFORNIA MARKET REPORT

- GLOBAL MARKET REPORT

- WWW.CIATTI.COM

JOHN CIATTI

[email protected]

415/458-5162

THANK YOU FOR YOUR TIME AND

ATTENTION









mailto:[email protected]

WINE MARKET OUTLOOK - The Ciatti Company Market Up… · 2010-2015 % change planting spain 6 ↓ some replanting france 2 ↓ removed yield restrictions italy 8 ↓ china 42 ↑ some

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