Wine prices in Napa jump to over $100 / bottle

The latest Direct to Consumer Wine Report shows the average price of a bottle of wine from Napa Valley jumped $17 last year, and at the same time tasting fees increased 35%.

According to the report, the average bottle of wine from Napa costs over $108, which is considerably more than Sonoma County, which saw an average of $57 per bottle. Over 71% of the West Coast wineries surveyed said they planned to raise bottle prices again this year.

These numbers come from the 2023 Direct to Consumer Wine Report, which was previously conducted by the Silicon Valley Bank wine division.

While visitors to Napa Valley are still lower than they were pre-pandemic, the price of a tasting at a Napa vineyard is significantly higher than in the country’s other wine regions. A standard tasting at a Napa winery now goes for $81, $22 more than it did in 2021. A reserve tasting averages $128.

Compare those numbers with $38 for a tasting in Sonoma and $28 in Paso Robles. And to put that in perspective, tasting fees didn’t even exist until the middle- to late-1990s. They hovered around $10 for several years, but as more and more people began going to wineries, those prices began to climb. As recently as 2012, the price of a tasting in Napa was $22.

Wine, overall, is in a bit of a slump. The industry is in its second consecutive year of negative growth, and the SVB report says, “Swift action is required to turn the tide.” The audience is also getting older. While consumers over the age of 60 have continued to grow, people under that age are less interested in buying wine today, this report found.

Sonoma Valley Vintners & Growers Alliance announce appointment of Robyn Sebastiani as Executive Director

Sonoma Valley Vintners & Growers Alliance (SVVGA) Board President Tom Rouse announced on Friday the appointment of Robyn Sebastiani as SVVGA Executive Director.

“Robyn’s experience, passion, and deep understanding of our mission made her stand out as the perfect choice to guide SVVGA into a new era of growth and success. We firmly believe that with her dynamic leadership style and collaborative approach, she will build an even stronger commitment to serving our members and the greater wine community of Sonoma Valley,” Rouse states.

New Index “WB Stock Index (WBIX)” Tracks Performance of Public Wine Companies

A new tool rooted in publicly traded wine companies and offering insights into the health of the wine sector has launched on winebusiness.com.

The WB Stock Index (WBIX) is a composite metric representing a portfolio of 13 publicly traded wine companies, weighted by each company’s annual wine revenue. The index reflects the daily percentage change in stock price at the end of the previous business day according to the significance of each producer in the marketplace.

The baseline for the index is Jan. 1, 2020, a time of strong performance by other indices and well before the onset of pandemic disruptions. The index stood at 119.02 as of March 1, indicating that publicly traded vintners have seen fortunes strengthen during the pandemic. The market’s confidence in the sector as a whole remains high. The index is intended to provide a snapshot in time and help benchmark a company’s performance against its peers. Performance can vary depending on the interval chosen, meaning a comparison across several intervals can be helpful.

Some of the strongest performers have been the luxury wine companies LVMH and Pernod Ricard, which have both performed well as aspirational and discretionary spending remained strong over the past year. LVMH’s share price has increased 28% over the past year to $170.45 while Pernod Ricard’s increased 3% to $42.22. The gains continued in the latest three months, with LVMH up 14% and Pernod Ricard up 7%, underscoring the long-term momentum underpinning each company.

The least fortunate company among those tracked by the index has been Vintage Wine Estates, which has seen its share price fall 83% versus a year ago to $1.39, with much of the slide registered in the past three months after the company restated earnings for the first quarter of fiscal 2023, released preliminary numbers for the second quarter that projected lower than expected revenue and gross margins for the year, and withdrew guidance on expectations for the remainder of the fiscal year, which ends June 30. The company also made a change at CEO with founding partner Pat Roney moving to the role of executive chairman and Director Jon Moramarco assuming the role of interim CEO. Moramarco is also the editor of the Gomberg Fredrikson Report and founder of bw166. On March 10, the company announced it had sold a 42-acre vineyard in Napa Valley for $11 million to reduce its overall debt. Following the sale, Vintage reported it owns approximately 1,600 acres of vineyards and leases an additional 800 acres.

Vintage is significant enough to influence the index but not sway it. Two of the largest components are instead LVMH and domestic vintner Constellation Brands, which has increased 2% over the past year but fallen 11% in the latest three months as its most recent earnings report underwhelmed the investment community. This is in line with the challenges other public companies have seen.

While a value decline can indicate a lack of confidence by the markets, it also creates a buying opportunity for long-term investors. The Duckhorn Portfolio, for example, has underperformed the index with a 19% drop in its share price over the past year. Currently trading in the range of $14.99, its shares have ranged between $12.64 and $22.29 over the past 52 weeks. Despite a lower price, several analysts have maintained a buy rating on the stock, an expectation that its share price will increase and reward investors. Bank of America analysts are among them, while Barclays upgraded its rating on the stock because of its latest earnings report.

This is in contrast with response to shifts in Vintage’s stock price, where sentiment has shifted in favor of “sell” from a uniform “buy” rating a year ago. Canaccord Genuity Group is among the bears, noting that it had more questions than answers about the company’s financials and future.

When it comes to public perception, however, the market is largely in favor of the wine sector. WBIX has outperformed the S&P 500, rising nearly 4% over the past year as the S&P 500 fell nearly 7%. The latest three months have seen it increase 2%, or twice the growth posted by the S&P 500.

Link to Index:  https://www.winebusiness.com/finance/wbix

Source:  Wine Business

 

Californian Vintners Report “High Quality” for the 2022 Harvest

The California Vintners Report came out this week and described this year as “a tale of two harvests”, with the heatwave in the week around Labor Day dividing the season into earlier and later picks. . Besides some of the “curve balls” one winemaker states the quality was “off the charts”

The summer growing season was ideal on the North Coast, the report said, until the late August heatwave accelerated the harvest and reduced yields in many places. Mendocino, however, saw yields up in 2019, because of the cool spring and milder-than-normal temperatures, even though the extended heat wave and limited water resources for irrigation proved challenging during the harvest.

Meanwhile, Lodi and the Sierra Foothills saw some late frost after a mild spring “dramatically” reduced the size of the crop.

There was good news from Napa Valley, which recorded excellent quality. More than 20 inches of rain fell in October and December 2021, bucking the years of drought seen across the region, which was followed by dry conditions from January until March. The Spring was mild and cool, but the Labor Day heatwave sent temperatures soaring into triple digits – up t0 110 -118 degrees in some places – for nearly a week, although cools nights helped to temper this and allows the vines to recharge.

This caused ripening to accelerate throughout the valley, and picking began earlier-than-average for many varieties, although growers had to use multiple techniques to help vines ride out the heat, where unripe grapes had been left to hang. There was some dehydration though, resulting in lower yields but greater concentration and flavor intensity, the report said.

Nate Weis, vice president of winegrowing at Silver Oak and Twomey Cellars in the Napa Valley said 2022 was likely to be “a pretty intense vintage — concentrated and powerful”, with particularly Pinot Noir from the Russian River, Anderson Valley and Santa Lucia Highlands, and good Merlot and Cabernet Franc. “The quality,” he said, “is off the charts.”

Duckhorn Vineyards’s vice president of winemaking Renée Ary noted the estate’s Cabernet Franc and Petit Verdot were “some of the best ever and the Chardonnays are bright, balanced and focused”, she said.

“Given the range of ripeness, blending will be important for the 2022 vintage as we balance our early and later picks.”

Meanwhile, in Sonoma County, limited rainfall, early season frost, warm spring and an early summer proved to have no ill effects, although some yields were lighter than average. However, the report noted that “fruit quality thus far is stunning and the overall smaller berry and cluster sizes point to a stellar 2022 vintage… [with] vintners… reporting wonderful concentration and flavor in the wines.”

Lisa Amaroli, director of winemaking at Benziger Family Winery in Glen Ellen, Sonoma County said it was “one for the record books”.

It comes as California’s Wine Institute has begun a new push to increase Californian wine exports – part of its ten-year strategy to grow US wine export sales to more than $2.5 billion by 2030.

View the full 2022 California Harvest Report, including regional reports from Amador County, Calaveras County, El Dorado County, Lake County, Livermore Valley, Lodi, Mendocino County, Monterey County, Napa Valley, Paso Robles, San Diego County, Santa Barbara County, Santa Clara Valley, Santa Cruz Mountains and Sonoma County: https://wineinstitute.org/wp-content/uploads/2022/11/Wine_Institute_2022_Harvest_Report.pdf

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Eastbound Westbound “A winemaker’s story from Bordeaux and California”

Eastbound Westbound “A winemaker’s story from Bordeaux and California” is an engaging present-day historical movie… 🎬 🎥 🎞️

…it transports you to another time period and location..

….you become engrossed in the plot…

… you also find yourself inside iconic wineries, and historic chateaus like Château Haut-Brion (Premier Cru Classé en 1855, Pessac-Léognan), and Château La Mission Haut-Brion (Cru Classé de Graves, Pessac-Léognan)

Check out the official trailer and see for yourself ….https://lnkd.in/g-uEY8Ag

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