President of Allied Grape Growers (AGG), Jeff Bitter said that the winegrape market is seeing more of a “stable environment” after three short crops in a row. While acreage has not been reduced to the level that AGG was calling for a few years ago, the shorter crops have helped bring balance to the market. At the same time, the increase in plantings over the past several years has tapered off to a more manageable pace.
“The plantings have slowed down from where they were a few years back. We’re essentially planting about the same amount of vines that we’re pulling each year due to attrition and vineyard age,” Bitter noted. “So, our bearing acres going forward looks pretty flat. We don’t see any major changes one way or the other as we move forward here. It looks like a pretty balanced situation.”
COVID Impacts on Wine Market
In February of 2020, AGG was calling for reducing winegrape acreage by 30,000 acres. That number was in addition to the normal amount of acreage being ripped out based on attrition. That was the number that would be needed to bring more balance back to the winegrape market. Once COVID-19 became an issue the following month, it had significant impacts on the industry. Bitter said that overall wine consumption remained relatively the same. However, sales of wine off-premise versus on-premise changed substantially.
“[COVID] definitely shifted where consumers were buying wine, but also what wines they were buying, and which wine companies were benefitting, and which ones weren’t. So, that caused a lot of disturbance in the industry for those two years,” said Bitter. “We’re seeing kind of a slow rebound now back to now like pre-pandemic type activity. But it has not resumed where we were in 2019 in terms of the type of volumes that you see in those various channels.”
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