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It could be a vintage year for wine shoppers

California wineries, already fighting less costly imports, may have to lower prices because of back-to-back bumper red-grape harvests.

February 10, 2007|Jerry Hirsch | Times Staff Writer

A large harvest this fall has left wineries loaded with the top-selling red varieties just when they are trying to move large surpluses left over from 2005's record grape crush -- to the benefit of wine aficionados.

Winemakers squeezed almost 1.9 million tons of red wine grapes last year, according to a joint state and federal agricultural report released Friday. Although that's 16% less than the previous year, it is still the second-largest on record.

The bounty only adds to the brimming tanks and barrel rooms of wineries, which are fighting off a flood of low-priced, high-quality imports that have grabbed the attention of Long Beach resident Jaz Kaner and other wine drinkers in recent years.

The result probably will be "aggressive pricing" for many red vintages over the next six to 12 months, said Bill Turrentine, president of Turrentine Brokerage, a bulk wine and grape dealer in Novato, Calif.

Shoppers also will see attractive prices for Chardonnay and Sauvignon Blanc as vintners work to sell a smaller overhang of white wines, said Glenn Proctor, a partner at Joseph W. Ciatti Co. of San Rafael, the state's largest bulk wine broker.

Kaner, who spends $5 to $20 on a bottle, has purchased Spanish and Italian wines of late because he thinks that premium California offerings such as Napa Cabernets are too expensive.

"I'd buy more from California if it was lower-priced," said Kaner as he wandered through the Wine Country, a large retailer in Signal Hill, on Thursday.

He's likely to find the best deals when looking for Merlot, which remains the nation's biggest-selling domestic red wine.

"After Merlot, the best values will likely be with Cabernet, especially from outside of Napa," said Andy Hoxsey, who grows wine grapes on 650 acres of Napa Valley vineyards.

But anything starting with "Pinot" could be expensive.

Sales of Pinot Gris, also called Pinot Grigio, soared 49% in supermarkets and drugstores over the last year, according to market research firm ACNielsen. That is the fastest growth rate of any domestic wine and has left the citrus-tinged white varietal in high demand.

California growers are rushing to fill the void. Vineyard acreage for Pinot Gris and Grigio has doubled over the last three years, according to industry estimates.

Pinot Noir, the earthy wine popularized in the 2004 movie "Sideways," remains the most sought-after red wine. Sales of domestic Pinot Noir have grown just 10%, but that's a reflection of limited plantings. Wineries and growers could have sold more if they had it.

Hahn Estates sells its entire Pinot Noir production of about 22,000 cases in just three to five months each year, said Adam LaZarre, the Soledad, Calif., winery's winemaker.

Although some prices for California wine may be falling, the drop typically isn't low enough to catch the eye of people like Hailie McGetrick, another Wine Country shopper.

"I can get interesting California wines, but I have to pay more," McGetrick said as she looked at Wine Country's selection of Spanish reds.

This is a problem that California's winemakers and grape growers need to confront, said Nat DiBuduo, president of Fresno-based Allied Grape Growers, the state's largest wine-grape-growing cooperative.

"We will do whatever it takes to expand and protect our market share," DiBuduo said.

Imported wines accounted for almost 30% of the U.S. market in 2006, up from 28% the previous year, said Jon Fredrikson, a Woodside, Calif., consultant.

Nonetheless, California wineries shipped an estimated 228.2 million cases of wine in 2006, a 2% gain, Fredrikson said.

The estimated retail value of California wine sales in the U.S. in 2006 was $17.8 billion, up 8% from $16.5 billion in 2005.

Overall, the state's wineries crushed 3.1 million tons of wine grapes in 2006, 17% less than the giant crop of 2005 but still the third-largest harvest on record. When raisin and table grape varieties are included -- they get crushed for juice, some wine products and other foods -- the harvest was 3.5 million tons, down 20% from 4.3 million in 2005, the state reported.

Despite consecutive large harvests, Proctor and other analysts don't expect the industry to suffer the type of glut that plagued it at the start of the decade, sparking winery bankruptcies and forcing growers to rip out thousands of acres of vineyards.

A rising thirst for good vintages from a broadening swath of America is keeping the industry profitable.

Even car racing fans are getting into the act. The typical NASCAR fan spent $81.40 on wine last year, up 22% from the previous year, according to ACNielsen, the research firm

Overall, Americans sipped a record 283.1 million 9-liter cases of wine last year, a 3.4% gain from the previous year and a 21.1% jump from 2001, according to Adams Beverage Group, a market research firm.

U.S. adults consume 3.16 gallons of wine per capita annually, up 14% from 2001, and that figure is expected to grow.

By 2010, Americans will drink nearly 316.6 million 9-liter cases of wine annually, making the U.S. the largest wine-consuming country in the world on a total volume basis, according to a report by market research firm International Wine and Spirit Record in London and Vinexpo, an industry trade show in Bordeaux, France.

Domestic and foreign wineries can thank Americans such as Gary Baucum of Long Beach for that growth.

"I like to cook," Baucum said, "and wine goes with food."


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