Could what happened to oil, happen to grapes this year?

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I’m sure most read that oil hit a negative number, meaning the oil producers were paying companies to take the oil off their hands, because there is such an over supply that there is no where to put it. I'm concerned there could be an oversupply of grapes this year. While I hear in-store alcohol sales are up, I know those winemakers that sell the majority of their wine through their tasting rooms and restaurants have seen a lot of their sales evaporate.

I help manage 20 acres of grapes for my community and our local, small-ish commercial winemakers have really been impacted hard. Very few are willing to commit to their grape needs yet this year, where usually we would have been close to sold out by now. We may need to get creative with delayed payment terms or other incentives.
 
I’m sure most read that oil hit a negative number, meaning the oil producers were paying companies to take the oil off their hands, because there is such an over supply that there is no where to put it. I'm concerned there could be an oversupply of grapes this year. While I hear in-store alcohol sales are up, I know those winemakers that sell the majority of their wine through their tasting rooms and restaurants have seen a lot of their sales evaporate.

I help manage 20 acres of grapes for my community and our local, small-ish commercial winemakers have really been impacted hard. Very few are willing to commit to their grape needs yet this year, where usually we would have been close to sold out by now. We may need to get creative with delayed payment terms or other incentives.
sadly i fear it is going to reach way further into our lives, oil, grapes small mom & pops are just the beginning,, this is like a calm still pond, you chunk one rock and the ripples carry out to the very edge, , what is it so far in 185 of about 194 countries so far,
Be Safe, Stay Safe,,,
Dawg
 
I subscribe to Virginia Vintner's Association and there have already be two postings of growers willing to provide financing. With that being said 2018 was a horrible year here. Some crops were down 60% and there were a lot of Rose's made instead of reds. We had high winds, rain and frost during bud break and the rain continued through harvest. Some wineries are saying they are down to their last cases of reds. My assumption is they are going to try to make up for 2018 even though their sales are down. But look out when this thing lifts, people will be out in droves.
 
I’m planning to purchase a pallet worth of grapes in the fall. A drop in the big bucket for sure but quite a lot for my little cellar. I hope this all clears out quickly and we can get back to some semblance of normality.

Cheers,
Johann
 
I would expect that what happened to milk and lettuce will happen to grapes. The farm next door is stuck disking the fields since the cows need to eat or cycle to the hamburger factory,,, which is suffering from a COVID19 outbreak so that market is down for a few weeks. In the vinters club we collected frozen juice bucket orders/money in February and are on hold since we can’t pick em up. As oil, the freezer will get filled up.

From what is being said about vaccines I would expect this blip to last for 18 months. The market will be there and wine is a shelf stable preservative so it will take creativity for you to get to your customers and them to get to their customers.

Good luck
 
I have never seen more wineries offering free shipping on as few as 3 bottles of wine. Wineries are offering larger discounts to club members and some are even offering discounts to non club members as well. With tasting rooms being closed sales must have dropped like a rock. The wineries are also full to the brim from the 2019 harvest meaning even more wine to try and move next year so unless tasting rooms are allowed to reopen by the Summer I don't know how you move wine to new and old customers sight (and taste) unseen and untasted. Free shipping will cut deep into profits and I can see a lot of small wineries who are barely keeping the doors open going by the wayside as they have too small a following and zero opportunity for new customers to stop in for tastings which usually aways move a bottle or two and sometimes more.
 
I agree. Wineries around here are offering 50% off AND free shipping. It's a really good time to buy excellent wine.

They also are being innovative. One of the Amador wineries where we are club members, is setting up outdoor tasting stations, 20 feet apart and allowing you to picnic anywhere on the grounds. They also have their outdoor pizza oven fired up-you just have to bring the pizza, You also have to bring your own wine glasses. Since it's only 45 minutes away, and I'm off, we're driving up there to see how it all works. Plus, they have an excellent Estate Syrah that normally sells for $30 per bottle, priced at $99 per case if you come up. So I think some of that will follow me home.

I do worry about the future for some of the smaller and newer wineries. Unless they are well capitalized, I don't see them making it to harvest 2020. I am prepared to take advantage of inexpensive grape prices if offered this year, maybe the only bright spot in this mess.
 
One of the more interesting pandemic marketing twist I have seen so far. Free ($0.01) shipping on 5 or 11 bottles and they will fill the last spot with a liter bottle of distillery produced hand sanitizer........ The wine is PDG as well.

Screen Shot 2020-04-25 at 12.04.29 PM.pngScreen Shot 2020-04-25 at 12.05.12 PM.png
 
I would expect that what happened to milk and lettuce will happen to grapes. The farm next door is stuck disking the fields since the cows need to eat or cycle to the hamburger factory,,, which is suffering from a COVID19 outbreak so that market is down for a few weeks. In the vinters club we collected frozen juice bucket orders/money in February and are on hold since we can’t pick em up. As oil, the freezer will get filled up.

From what is being said about vaccines I would expect this blip to last for 18 months.

Since the novel Corona virus is in one of the two families of viruses that cause the common cold; I think a vaccine will be extremely difficult to make. Hope for the best, plan for the worst...
 
I agree. Wineries around here are offering 50% off AND free shipping. It's a really good time to buy excellent wine.

They also are being innovative. One of the Amador wineries where we are club members, is setting up outdoor tasting stations, 20 feet apart and allowing you to picnic anywhere on the grounds. They also have their outdoor pizza oven fired up-you just have to bring the pizza, You also have to bring your own wine glasses. Since it's only 45 minutes away, and I'm off, we're driving up there to see how it all works. Plus, they have an excellent Estate Syrah that normally sells for $30 per bottle, priced at $99 per case if you come up. So I think some of that will follow me home.

I do worry about the future for some of the smaller and newer wineries. Unless they are well capitalized, I don't see them making it to harvest 2020. I am prepared to take advantage of inexpensive grape prices if offered this year, maybe the only bright spot in this mess.
Which winery were you referring to about the tastings and picnicking, etc.? Thanks.
 
I’m sure most read that oil hit a negative number, meaning the oil producers were paying companies to take the oil off their hands, because there is such an over supply that there is no where to put it. I'm concerned there could be an oversupply of grapes this year. While I hear in-store alcohol sales are up, I know those winemakers that sell the majority of their wine through their tasting rooms and restaurants have seen a lot of their sales evaporate.

I help manage 20 acres of grapes for my community and our local, small-ish commercial winemakers have really been impacted hard. Very few are willing to commit to their grape needs yet this year, where usually we would have been close to sold out by now. We may need to get creative with delayed payment terms or other incentives.
I get emails from Wine Industry Advisor and found this article to be pretty informative about the future of grapes. They go through cycles, and right now they're close to or possibly coming off the bottom. When we looked at vineyard real estate we heard from owner that many were either selling if vines were too old, or if they had enough capital, were replanting to varieties that better suited new trends. Andy Beckstoffer, quoted in this article, is one of the preeminent that I'm sure everyone has heard of. Upside to the local wine grape market amid oversupply and the virus?
 
This concern of a glut in grapes and hardships for small wineries is spot-on. WineAmerica is a DC lobbying group that represents wineries across the US. They say: "The Covid-19 crisis will also have a negative impact on grape growers, with the average winery respondent projecting a 22% drop in grape purchases and 9% in bulk wine."

Here is the entire email from them:

Covid-19 Winery Impact: Challenges and Innovations
Washington, DC--American wineries nationwide have suffered economic hardship due to the Covid-19 crisis, but have also met the challenges with determination and innovation, according to a new online survey conducted by WineAmerica, the national association of American wineries. The survey was returned by 727 wineries in 45 states, and focused on one month (March 15 to April 15) in terms of impacts on production, employment, tourism, sales, total financial impact, and government actions.
In a clearly challenging time, the most uplifting finding is how wineries have used creativity and innovation to fill the chasm of sales caused by shuttered tasting rooms and restaurants. Among the most popular strategies were curbside winery pickup (84% of wineries used it), reduced shipping costs (63%), special Direct-to-Consumer promotions (60%), home delivery by winery personnel (54%), wine club specials (53%), and virtual wine tastings (28%)--with only 5% of respondents answering “none of the above”. It is highly likely that the marketing experience gained through the need to adapt will last beyond the crisis and serve the industry for years to come.
“Wineries and tourism have a symbiotic relationship,” said WineAmerica President Jim Trezise. “The romance of ‘wine country’ attracts millions of tourists, who are the lifeblood of the industry, especially for the smaller wineries. Marketing innovations have mitigated the losses due to closed tasting rooms, but not entirely, and the situation will get worse as more time goes by. As more states start to reopen, WineAmerica is working to develop ‘best practices’ for tasting rooms that will protect the safety of winery employees and customers while allowing for a pleasant and enjoyable wine country experience.”
Largely reflecting the shape of the American wine industry, with a preponderance of small wineries, 70% of respondents produce fewer than 5,000 cases, 24% between 5,000 and 25,000, 4% between 25,000 and 50,000, and 2% over 100,000. Nearly 57% had annual sales under $500,000, 33% between 500,000 and $2,500,000, 5% between $2,500,000 and $5,000,000, and 4% over $5,000,000.
Only 15% of wineries stopped production, but 62% slowed it due to the crisis. The average number of employees in normal times was nearly 12, with the average winery having had to lay off more than 5--though 25% of wineries said they didn’t lay off any.
In terms of tourism, the average winery normally welcomes 17,644 visitors annually, expected 1,482 during this month, but saw only 124--90% below expectations. In addition, the average winery had to cancel over 5 special events (including wine trail events) which normally bring in many visitors during a slow time of year. These large decreases in tourism were caused by orders from various levels of government, especially state, to cease or reduce tourism-focused operations such as tasting rooms. Over 90% of respondents reported such orders, sometimes by multiple levels of government.
Not surprisingly, tasting room sales declined by an average of 75%, and the damage would have been worse without the new options of curbside pickup and direct delivery for local customers. In addition, the average respondent increased Direct-to-Consumer (DtC) sales by 8%, with many wineries in double or triple digits of increase.
Meanwhile, wholesale sales (destined for off- and on-premise accounts) declined by an average of 30% compared with projections or levels of the same period in 2019.
Combining lost sales and unanticipated expenses (e.g., for hand sanitizers, cleaning services, etc.), the average winery lost $51,201 during the month, and expects to lose $134,626 in May if the current situation continues through the end of that month. In that case, the average winery owner estimates that it would take nearly 18 weeks (over 4 months) to return to normal business in terms of employees, visitors, sales, and other factors. That would mean mid-October.
The Covid-19 crisis will also have a negative impact on grape growers, with the average winery respondent projecting a 22% drop in grape purchases and 9% in bulk wine.
The American wine industry seems to have been quite proactive in seeking government aid, with 69% of respondents seeking Paycheck Protection Program loans, 52 asking for Economic Injury Disaster Loans, and 5% requesting USDA Disaster loans--with only 14% of respondents not seeking any aid at all. Also, 44% of respondents say they know that employees they had to lay off have filed for Unemployment Insurance.
The survey did not ask if wineries had actually received federal government aid such as PPP loans, but anecdotal evidence from many conversations indicates that there have been mixed results, with some wineries receiving such aid quickly and others giving up entirely due to bureaucracy and delays. In addition, major technical glitches at the Small Business Administration have delayed the release of a second round of PPP funding, compounding the frustration.
In terms of the role of governments so far, 27% respondents feel that the federal government has been helpful, while 46% say no and 28% are unsure. State governments get much better ratings, with 70% saying they have been helpful, 19% not, and 11% unsure. The federal role to date has primarily involved financial aid in various forms, while state governments have often relaxed regulations (such as curbside pickup) to enhance marketing opportunities.
The results of this survey will be shared by WineAmerica staff and lobbyists with members of Congress and the Administration as they discuss further measures to mitigate the impact of the Covid-19 crisis. WineAmerica and its beverage coalition partners have already conveyed several legislative priorities including a suspension of federal excise taxes through the end of 2020, and making permanent the Craft Beverage Modernization and Tax Reform Act (CBMTRA).
This document and the aggregated results are available in a special Covid-19 section of the WineAmerica website.
Media contact: Jim Trezise, President ([email protected])
 
This concern of a glut in grapes and hardships for small wineries is spot-on. WineAmerica is a DC lobbying group that represents wineries across the US. They say: "The Covid-19 crisis will also have a negative impact on grape growers, with the average winery respondent projecting a 22% drop in grape purchases and 9% in bulk wine."

Here is the entire email from them:

Covid-19 Winery Impact: Challenges and Innovations
Washington, DC--American wineries nationwide have suffered economic hardship due to the Covid-19 crisis, but have also met the challenges with determination and innovation, according to a new online survey conducted by WineAmerica, the national association of American wineries. The survey was returned by 727 wineries in 45 states, and focused on one month (March 15 to April 15) in terms of impacts on production, employment, tourism, sales, total financial impact, and government actions.
In a clearly challenging time, the most uplifting finding is how wineries have used creativity and innovation to fill the chasm of sales caused by shuttered tasting rooms and restaurants. Among the most popular strategies were curbside winery pickup (84% of wineries used it), reduced shipping costs (63%), special Direct-to-Consumer promotions (60%), home delivery by winery personnel (54%), wine club specials (53%), and virtual wine tastings (28%)--with only 5% of respondents answering “none of the above”. It is highly likely that the marketing experience gained through the need to adapt will last beyond the crisis and serve the industry for years to come.
“Wineries and tourism have a symbiotic relationship,” said WineAmerica President Jim Trezise. “The romance of ‘wine country’ attracts millions of tourists, who are the lifeblood of the industry, especially for the smaller wineries. Marketing innovations have mitigated the losses due to closed tasting rooms, but not entirely, and the situation will get worse as more time goes by. As more states start to reopen, WineAmerica is working to develop ‘best practices’ for tasting rooms that will protect the safety of winery employees and customers while allowing for a pleasant and enjoyable wine country experience.”
Largely reflecting the shape of the American wine industry, with a preponderance of small wineries, 70% of respondents produce fewer than 5,000 cases, 24% between 5,000 and 25,000, 4% between 25,000 and 50,000, and 2% over 100,000. Nearly 57% had annual sales under $500,000, 33% between 500,000 and $2,500,000, 5% between $2,500,000 and $5,000,000, and 4% over $5,000,000.
Only 15% of wineries stopped production, but 62% slowed it due to the crisis. The average number of employees in normal times was nearly 12, with the average winery having had to lay off more than 5--though 25% of wineries said they didn’t lay off any.
In terms of tourism, the average winery normally welcomes 17,644 visitors annually, expected 1,482 during this month, but saw only 124--90% below expectations. In addition, the average winery had to cancel over 5 special events (including wine trail events) which normally bring in many visitors during a slow time of year. These large decreases in tourism were caused by orders from various levels of government, especially state, to cease or reduce tourism-focused operations such as tasting rooms. Over 90% of respondents reported such orders, sometimes by multiple levels of government.
Not surprisingly, tasting room sales declined by an average of 75%, and the damage would have been worse without the new options of curbside pickup and direct delivery for local customers. In addition, the average respondent increased Direct-to-Consumer (DtC) sales by 8%, with many wineries in double or triple digits of increase.
Meanwhile, wholesale sales (destined for off- and on-premise accounts) declined by an average of 30% compared with projections or levels of the same period in 2019.
Combining lost sales and unanticipated expenses (e.g., for hand sanitizers, cleaning services, etc.), the average winery lost $51,201 during the month, and expects to lose $134,626 in May if the current situation continues through the end of that month. In that case, the average winery owner estimates that it would take nearly 18 weeks (over 4 months) to return to normal business in terms of employees, visitors, sales, and other factors. That would mean mid-October.
The Covid-19 crisis will also have a negative impact on grape growers, with the average winery respondent projecting a 22% drop in grape purchases and 9% in bulk wine.
The American wine industry seems to have been quite proactive in seeking government aid, with 69% of respondents seeking Paycheck Protection Program loans, 52 asking for Economic Injury Disaster Loans, and 5% requesting USDA Disaster loans--with only 14% of respondents not seeking any aid at all. Also, 44% of respondents say they know that employees they had to lay off have filed for Unemployment Insurance.
The survey did not ask if wineries had actually received federal government aid such as PPP loans, but anecdotal evidence from many conversations indicates that there have been mixed results, with some wineries receiving such aid quickly and others giving up entirely due to bureaucracy and delays. In addition, major technical glitches at the Small Business Administration have delayed the release of a second round of PPP funding, compounding the frustration.
In terms of the role of governments so far, 27% respondents feel that the federal government has been helpful, while 46% say no and 28% are unsure. State governments get much better ratings, with 70% saying they have been helpful, 19% not, and 11% unsure. The federal role to date has primarily involved financial aid in various forms, while state governments have often relaxed regulations (such as curbside pickup) to enhance marketing opportunities.
The results of this survey will be shared by WineAmerica staff and lobbyists with members of Congress and the Administration as they discuss further measures to mitigate the impact of the Covid-19 crisis. WineAmerica and its beverage coalition partners have already conveyed several legislative priorities including a suspension of federal excise taxes through the end of 2020, and making permanent the Craft Beverage Modernization and Tax Reform Act (CBMTRA).
This document and the aggregated results are available in a special Covid-19 section of the WineAmerica website.
Media contact: Jim Trezise, President ([email protected])
Thanks for sharing that, it’s good information to have, and yes, small vineyards were dropping a lot of fruit last year, Constellation refused to honor a lot of contracts
 
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