Winegrape Market Poised for a Rebound Year in 2021

Brian GermanIndustry, Nuts & Grapes

Last year was a tough one for growers as the winegrape market was flush with supply. President of Land Management Incorporated, Jeff Brown said they lost quite a bit of business last year as a result. Brown grows about 600 acres of winegrapes in the Tracy area. He pulled out several blocks of specialty varieties due to the lack of demand. However, the impact of COVID may have turned things around for the winegrape market in 2021.

Winegrape Market

“If you were to ask me back, more around January-February of 2020, the market was dismal. Wineries were asking us to just pull the grapes out. They had no interest. And then COVID hit,” Brown noted. “Now there’s actually a shortage of grapes and they’re scrambling around to find enough grapes for this year. They’re also giving out new planting contracts. So, it’s kind of had an interesting effect on the market.”

COVID caused the closure of restaurants and tasting rooms throughout California. As a result, on-premise consumption of wine experienced a dramatic decline. At the same time, off-premise sales saw a substantial increase. Brown noted that wineries “went through massive amounts of inventory in a short period of time” as their products were “flying off the shelves.”

Now the winegrape market is exhibiting promising signs, with demand for grapes steadily coming back. After ripping out some vines last year because of the lack of demand, Brown began planting again for this year.  He received a longer-term contract for some cabernet sauvignon, further indicating that market conditions are moving in a positive direction for growers.

“We’re seeing an increased demand for the grapes that we currently have, that were coming out of contract. We’re seeing higher prices and we’re seeing new planting contracts starting to creep up and come on board this year,” Brown explained. “If you would have asked me last year, I would have said you’re crazy.”

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Brian German

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Ag News Director, AgNet West