High-end wine growers facing tough times

[Auggie]

Dan Berger on Wine, 7-24-09:

It is about two months before harvest and Frank Hewitt has no buyers yet for any of the cabernet sauvignon on his 17 acres in Calistoga (Napa Valley).

Frank’s fruit equates to about 4,000 cases of premium wine that would sell for at least $50 a bottle. But with sales of all such wines flat as a table, his tale is far from unique. Indeed, it’s the same story around the state.

The weakened economy that has buyers trading down to lower-priced wine has flipped the market for wine grapes 180 degrees. Some industry analysts say that a good portion of the fruit, in even prestigious locations such as Napa and Sonoma, may go unsold this year.

<snip>

“Well, I have to decide if I want to invest more money in them and have wine made (from his grapes) and put it in storage and hope to sell the wine later,” Hewitt says. “But I’m not inclined to go there. I don’t like the idea of the cost of putting more money into the fruit. Not with the economy the way it is. I have heard of some wineries who don’t even have enough money to bottle last year’s wine, and if that’s the case, they certainly don’t have enough money to buy grapes.”


LINK: http://www.napavalleyregister.com/articles/2009/07/24/wine/dan_berger/doc4a6933ca85584325961294.txt

[HysteryDiagnosis]

1. "Wine is sunshine held together with water" Bottle Shock, a movie

about the Californian wine makers going up against the Europeans in blinded competitions. Good show, give it a 8 out of 10.

[JBoy]

2. An interesting situation. Sounds like the root issue is as much lack of credit as the economy.

If this year's crop is truly good, there must be some bold speculators that will want to finance the making of wine from it. You'd be able to get a deal on the grapes, and not be faced with selling the wine for 3-4 years in any case. By then, if inventories have dropped and the economy turned around, you could make a bundle on a killer vintage wine.

[Auggie]

3. Bold speculating is exactly what it would take