The winegrape oversupply in 2020 had a detrimental effect on a variety of aspects of the industry, most notably prices. However, the abundant supply of winegrapes also played a role in issues of smoke exposure. Wildfire smoke has made it difficult for many producers to find buyers for their winegrapes. The winegrape oversupply further complicated the issue, as buyers were more particular when it comes to smoke exposure thresholds.
“When a buyer is faced with a decision on evaluating quality that may be compromised in a winegrape purchase, what’s going to play into that decision-making process is how bad they actually need the product in the first place,” said Allied Grape Growers (AGG) President Jeff Bitter. “Going into last year, there was a pretty acute oversupply of winegrapes and there were some market influences that certainly drove certain buyers to behave in a more extreme manner with regard to their approach to smoke exposure.”
A winegrape oversupply has been a concern for industry members for quite some time. Last year Bitter indicated that the industry would need to reduce acreage by 30,000 acres to better reflect demand. With wildfires continuing to be a significant concern for California producers, it could create further issues related to contracts and winegrape purchases in the future.
“That’s true of any qualitative measure in times where the market is either short or long. When the market is short, buyers tend to look past some quality issues or defects that in other times may catch their attention a little bit more,” Bitter explained. “So, it is always a function of where the market is at and what the environment is like.”
Buyers have been responding to issues of smoke exposure with more stringent language in winegrape contracts. Bitter said some buyers have taken a hardline position, rejecting grapes outright when smoke is present regardless of any test results. AGG and the California Association of Winegrape Growers have put together a report to help ease contract pressures in relation to smoke exposure. “We want to bring the industry together and create that opportunity to converse around how do we do a better job of communicating ahead of time so that we don’t have a situation where there are some unilateral positions being taken on the issue,” Bitter noted.