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From: lewis.perdue@wineindustryinsight.com

Subject: Custom Crushers Get Creative To Help Growers Survive

Date: 2009-10-15 14:30:09

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EMAIL EDITION - VOLUME I, NUMBER 126 - October 15, 2009

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  • Custom Crushers Get Creative To Help Growers Survive

  • WII’ve Changed A Bit

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 Custom Crushers Get Creative To Help Growers Survive

Call it trickle down disaster: Recession-battered consumers have traded down and abandoned most anything over $20 per bottle. That left wholesalers, wineries and retailers stuck with inventory that left them no choice but to discount. And with only a few exceptions, the higher the price, the bigger the mark-down.

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The pain has now trickled down to the vineyard. The results have made for broken promises and contracts, big winery bottom-feeders, the occasional honorable winery and some creative deals that are helping a few fortunate growers survive.

“There have been a lot of offers from larger wineries to come in, harvest the fruit and pay the grower up to $500 per ton,” said Mike Fisher, Chief Operating Officer of Global Wine Partners in St. Helena. “In many cases that’s the only alternative for the grower to make anything at all this year.”

Fisher pointed out that leaving fruit to rot on the vine is not good viticulture. But because it costs $200 to $250 per ton to harvest, low-ball offers save that expense as well as offering some cash flow no matter how small.

By comparison, the average 2008 price for Cabernet Sauvignon was $4,728 in Napa Valley and $2,311 in Sonoma County. Chardonnay average prices were $2,400 and $2,016 respectively.


None of the North Coast growers interviewed by Wine Industry Insight mentioned Gallo or Beringer, Kendall-Jackson was on most lips. Gallo has its own grape oversupply problem with its huge acreage of Chardonnay and Cabernet Sauvignon, especially in Sonoma County.

Beringer faces the same over-planting issues, especially on the Central Coast. Beringer’s parent company, Fosters of Australia, has been struggling with a global downturn for the past year and has been unloading assets — including vineyards.

“We had K-J offer us $350 a ton for Chardonnay,” said a major vineyard owner who also manages substantial acreage for other growers. “It was a take it on the spot offer. Accept it or say goodbye.”

None of the growers would speak on the record. As one vineyard owner said, “I don’t want my bank to know anything until I can figure out what I’m going to do.”

Nearly every grower said that wineries had walked away from contracts or forced them to negotiate a lower price.


“I’ve been dealing with a steady stream of bottom feeders and broken contracts,” said a major Sonoma County grower. “I even called Gallo, but they’re not returning calls. Then last week, I get a call from a winery we’ve been working with for almost a decade.

“It’s not a big surprise to me when my winery contact tells me, ‘We’ve got all the fruit we need this year. We won’t be needing yours.’ I swallow real hard, and then I hear the strangest story I’ve ever heard,” said the grower.

“My contact tells me that, ‘we’re going to honor our contract and pay you in full what we agreed.’ I was stunned. They felt they needed to do the right thing.”

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WII’ve Changed A Bit

We’ve been coding and working behind the scenes to improve Wine Industry Insight based on your suggestions, our growth and as a response to market conditions.


One of the most visible changes lately is a shift in the types of companies advertising.  Visitors to wineindustryinsight.com are seeing a lot more business- and executive-oriented advertisers. This has happened for three reasons:

  1. Demand from mainstream advertisers as they look for effective niche markets to target. The new advertisers are here because of WII’s base of upper-management decision makers: CEOs, vineyard and winery owners as well as finance, accounting, legal and regulatory professionals.
  2. Everyone in the wine industry including suppliers, has been impacted by the recession and that affects advertising decisions.
  3. Some large companies do not appreciate the scrutiny they have received in Wine Industry Insight’s editorial coverage. A small number of those companies have strong-armed a few advertisers and potential advertisers and threatened to withdraw their business if their ads continue to appear here.

    Fortunately, that has not affected us. Our  paid VIP subscribers have always been the financial foundation of our efforts and continue to support WII’s particular brand of journalism.


Wine Industry Insight recently hit several significant benchmarks:

  • Subscribership to WII’s VIP Premium Content recently topped 700 paying members since we began charging for some content in March.
  • Opt-in subscribers to the free email edition which is transmitted once or twice a week, topped 11,000.
  • Wineindustryinsight.com topped 25,000 unique visitors (meaning that the same person is not counted twice.)

Because of this — and especially the steady increases in paying VIP subscribers — WII has started an affiliate program to help blogs and other web sites monetize their efforts. The affiliate program involves the placement of an advertisement on the affiliate blog or website. If someone clicks on the ad and subscribes, the affiliate will make 18% — $19.82 on every Annual Subscription and the same percentage for month-to-month subscribers. Affiliates earn the same amount for renewals for the lifetime of every subscription.


In the coming issues, you’ll begin to see a wider variety of articles and sources. These are in response to your suggestions, tips and needs. Please keep telling us what you like … and don’t. You can always contact me by replying to an email edition or writing: lewis.perdue[at]wineindustryinsight.com.


October 15, 2009
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    Lewis Perdue
    670 W. Napa St., Suite H, Sonoma, CA 95476
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    Email: lewis.perdue@wineindustryinsight.com