MONDAY, FEBRUARY 14, 2022. BY STUART SPENCER, LODI WINEGRAPE COMMISSION.
The 2021 Preliminary Grape Crush Report was published last Thursday, February 10, 2022. Statewide, California crushed 3.6 million tons of winegrapes, up from 3.4 million in the smoke-affected 2020 harvest. Crush District 11 (Lodi) crushed 782,328 tons, our 4th largest crush, but 68,000 tons shy of the 2018 record harvest of 850,000 tons. The total crop value grew by $101 million, from $394 in 2020 to $495 million for the 2021 harvest.
Cabernet Sauvignon led the district with 194,559 tons (up from 156,008 tons crushed in 2020) and continues to play a significant role in the region. By contrast, the light harvest of 2011 saw 96,000 tons of Cabernet Sauvignon crushed. Zinfandel continues to play an important role with 100,507 tons, but down from 105,292 tons in 2020, and off significantly from the large harvests of 2012 and 2013 which saw approximately 170,000 tons crushed. Simultaneously, we see continued interest in high-quality “old vine” Zinfandel where nearly 3,000 tons sold for over $1,000/ton in 2021.
The average price paid to growers rose by $59 to $639.76/ton with price increases across all the major varieties. See table below.
Moving forward, there are several factors that will affect the grape market –
- The overall wine market is relatively flat, with wines priced below $11/bottle losing market share while wines priced above $11 seeing continued growth. Premiumization continues, but to what extent remains a question.
- Distortions from pandemic-related shutdowns continue to affect the market and make comparisons to previous years challenging.
- Vineyard removals will continue in Lodi as poorer performing and diseased vineyards are removed and replaced with other crops including trees. This is a positive as growers have alternative crops constraining long-term grape supply while also creating a healthier ecosystem to control the spread of diseases and pests from neighboring vineyards.
- Vineyard establishment and farming costs have risen significantly (see 2021 cost studies) which will continue to drive removals and shifts to alternative crops.
- Any grower signing a new grape contract should consider inflationary pressures and consider what your costs will look like in 3-5 years. Inflationary pressures also provide opportunities for coastal brands/wineries to control their COGS (cost of goods sold) by sourcing high-quality Lodi winegrapes at a lower price relative to coastal grape prices.
- Lodi-appellated brands continue to grow and perform very well in premium price point segments, demonstrating the potential and opportunities that exist with Lodi-grown grapes.
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