Viticulture & Enology


It’s the end of the world as we know it (REM).  Back to my roots!

It has been ABSOLUTELY CRAZY.  Finally, the ivory towers are crumbling and the inane Wine Country purchases made over the last 8-15 years have come home to roost.  Actual multi-million dollar sales with haircuts in excess of 50% are happening all over (we have worked on two of them) and the infection is spreading.

Let’s start with some indicators:

Diageo Indicates Worsening Profit on ‘Murky’ Economy

French wine exports fall 25 percent amid crisis

Champagne grapes will rot as producers protect price

Wine auction: Tough economy leaves glasses half empty

NOW IT IS TIME.  All the “behind the scenes” actions and “dirty little whispers” are gone and replaced with desperation and the reality that even at bargain prices escape may not be possible:

Makers of high-end wines caught in ‘dead zone’

Cosentino Winery Sued For $500K (unpaid grapes)

Lewis G. Carpenter, Jr., owner of Carpenter Ranches of St. Helena has sued Cosentino Winery in Napa County Superior Court for more than half a million dollars he says is still owed for wine grapes from 2008.

Diamond Oaks Vineyards Plus Two More Maniar Firms File Chapter 11 (BANKRUPTCY)

Napa Valley’s Diamond Oaks Vineyards has filed for Chapter 11 Bankruptcy protection.

In addition, two other firms also owned by Dinesh Maniar: SF-based Montgomery Realty Group and Southland Thoroughbred Farms in Riverside County have filed separate Chapter 11 filings, all in the U.S. Bankruptcy Court for the Northern District of California.

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Point Of Know Return (Kansas).  You know it’s time you see the sign.

Well, the school year is beginning and we should return to our feeble attempts to consolidate economic data and provide some insight into the future of the Wine Industry in the Wine Country.  Sorry we “slacked off” for most of August.  Hey, the stock market was up.  We should all be happy right?

WRONG!

We have arrived at THE stock market inflection point where the market will continue to trend higher and the last two years will seem like a horrible nightmare OR we will slowly crumble under the weight of an ever-increasing morass of depressing information tidal waves.  We still hold to the time line of Thanksgiving 2009 as our time frame for the “sum of all knowledge” to reveal the future of the Wine Country.  For now, here is the latest insights:

Foreclosures Impacting More-Affluent Areas

Record Number Of Foreclosures For Sale

Summary Of Distressed Sales And Financing

It appears as though the pain in the real estate market continues to accelerate toward the Wine Country.

Major Winery For Sale

We find it very interesting to see this.  For the first time, a large enterprise has moved out of the “secret sales society”, where all transactions occur without public record, and into the light of potential discounting.  It will be interesting to see the bids and whether they are so low so as to cause the seller to “pull” the property from the marketplace.

Vacation (GogGos) and I REALLY needed this one.  Hope everyone is doing well.

Things are moving fast and furious.  So we are going to start consolidating multiple references into one post.  Let us know what you think.

Budget Woes

It appears as though California continues to slide rapidly toward oblivion

Tough Sales

Pair this with a recent article stating almost exactly the same thing WRT the Napa Valley and you have a Fall 2009 appearing as though there will be a multitude of bankruptcies in the vineyard business.

Green Shoot!?@@?#?

Why does California continue to crush the hopes and dreams of the “talking heads” at CNBC.  Hopefully, they will realize the error of their ways and do some honest reporting.

Dreams Crashing

Would anyone believe that the Napa County Assessor insists that the High End market in the north end of the Napa Valley has moved laterally (ie-no change higher or lower) in the past year????  Can you feel the wave of appeals that are going to be submitted once reality and fantasy collide???  We are certain a similar trend is occurring in Sonoma County and does not bode well for the amount of money the state is going to be “removing” from our local cities and towns.

Cheers!

I want candy! (Bow wow wow).  Teenage fantasy!!

We love Andy Beckstoffer, primarily because he makes the Wine Industry so simple.

In 1975, Beckstoffer started the Napa Valley Grape Growers Association with a primary goal being to organize and help develop pricing strategies collectively.  Grape growing just wasn’t profitable as wineries controlled negotiation, so producers were getting out of the market.

He recommended basing the price of a ton of grapes on the future price of a bottle of wine.  According to his Web site, “Under his bottle price formula, wineries projected the retail price of the finished wine and agreed to a standard multiple for each grape variety.  If a winery planned to price a bottle of cabernet sauvignon at $10, and the standard multiple of that grape was 100, the price of the grape would be $1,000 a ton.”  Mondavi and Christian Brothers quickly adopted the formula, and grape growers were essentially back in business.

We sure hope this theory has gone by the wayside in the last couple of years.  If not, bottle prices and, by association, land prices are in for a rude awakening.

Unsold Grapes

Just for kicks, use the Beckstoffer formula on the new pricing for a ton of grapes to compute the future cost of your favorite bottle of wine.  Bet you can anticipate a bargain!!!

Jump On It (Sir Mix-a-lot).  Word!

Here is an extension of the WSJ article discussing the fate of the Wine Country.

Luxury Fever Cools Off

Wrap It Up (Fabulous Thunderbirds).  Old school (bald guys rock)!!

FINALLY, someone is flat out saying the Wine Country will follow the rest of the economy into the worst recession since the Great Depression.

Listen people, trouble is coming and it will be long-winded and incredibly painful.

Luxury Wine Market Reels

We have been presenting discussions of the various economic components as well as some insight into how they might affect the Wine Country.  This appears to be the first article “admitting” the “bottom may fall out”.

Make sure you include the comments after reading the article.

Cypress Hill (much love!!)

Even we have to marvel at the complete ignorance of the current slate of executives in the Wine Industry.  The fact that Mr. Robert Beynat dismissed the Internet as a marketing vehicle is grounds for immediate dismissal.  However, the fact that we have not heard ANYTHING from any “peer” at least gently berating him for this perception is incomprehensible.

It is hot in the Wine Country, are we all delirious??

Internet not a suitable tool for wine sales

Hopefully, someone it at this very moment deriving a spectacular direct marketing initiative to prove both the merits of the Internet as well as it’s cost effective delivery methodology??

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