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Way too Many Wine Grapes in WA State - CSM -40% - 8/5/2023 10:13:43 PM

Rich64N

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From: Tacoma and Pasco WA
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I was in Eastern WA this week and all the ag talk was CSM dropping their independent buys by 40%, roughly 18% of all WA wine grapes. This is major - and as Dr Mike Veseth (The Wine Economist) states, not just a WA issue, this is international.

https://www.wine-searcher.com/m/2023/08/washington-wine-takes-another-blow

Personal note, I'll be dropping Pasco WA from my location, sold on Thursday. I'll still be visiting the Tri-Cities (Dry-****ties) for a few years at friend's places.

Post #: 1

RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/6/2023 3:25:19 AM

khmark7

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Interesting article, thanks for sharing.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/7/2023 12:53:47 PM

BRR

Posts: 1848
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From: Seattle, WA
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quote:

ORIGINAL: Rich64N

I was in Eastern WA this week and all the ag talk was CSM dropping their independent buys by 40%, roughly 18% of all WA wine grapes. This is major - and as Dr Mike Veseth (The Wine Economist) states, not just a WA issue, this is international.

https://www.wine-searcher.com/m/2023/08/washington-wine-takes-another-blow

Personal note, I'll be dropping Pasco WA from my location, sold on Thursday. I'll still be visiting the Tri-Cities (Dry-****ties) for a few years at friend's places.

Wow, I had no idea Mike Veseth was writing about wine these days. I took a couple of Econ classes from him while at Univ. of Puget Sound. Go figure.

I read about this on Sean Sullivan's site, and I'm feeling for those growers. Ouch.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/7/2023 1:02:15 PM

WineGuyCO

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One positive in the article was lots of unsold wine in Rhone & Rioja. LOVE me some discounts.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/7/2023 6:54:43 PM

ericindc

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I had a question regarding the article saying again and again, that people arent buying at the $10 price point. Is that because a $10 wine 5 years ago and keeping the wine at $10 involved too much of a decrease in quality? Or that in general people arent buying super cheap wines and are buying at $15 or $20?

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/7/2023 6:57:37 PM

DoubleD1969

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I don’t think the problem of too many grapes is talking about the wines this group mostly buys. This drumbeat has been happening since I joined, and all I see are prices going up.

< Message edited by DoubleD1969 -- 8/7/2023 6:58:33 PM >

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Post #: 6

RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 12:28:16 AM

nwinther

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quote:

ORIGINAL: WineGuyCO

One positive in the article was lots of unsold wine in Rhone & Rioja. LOVE me some discounts.

I wonder why so many producers keep making volume rather than quality. You'd think that a more severe green harvest or harvest sorting would be obvious if you at looking at emergency distillation of your wine.
Or is the compensation for distillation lucrative enough that you just don't bother? What would a bag of CdR cost just above the distillation-compensation?

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 1:54:01 AM

Echinosum

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quote:

ORIGINAL: nwinther
Or is the compensation for distillation lucrative enough that you just don't bother? What would a bag of CdR cost just above the distillation-compensation?

France introduced a temporary emergency distillation scheme in 2020. It was limited in terms of budget, at €140m. It paid €0,76 per litre, and absorbed about 2/3 of the immediate excess stocks. It was particularly focused on Bordeaux, and there is some suggestion the Bordelais were hoping for a higher price. But no surprise there, French farmers are always hoping for a higher price.

France announced they were thinking about another such temporary budget-limited scheme in February 2023, mentioning a budget of €160m. But I can't find anything which confirms that they have gone ahead with it. But I did find a market report on distillation equipment, suggesting that manufacturers of that were rubbing their hands with expectation of growing sales in France over the next few years. That seems to be an indication that more wine is being distilled commercially, outside of such emergency schemes.

In comparison, French bulk wine for export was recently trading at an average of €1,59 per litre. Though that is an average, and was the second highest price of the 15 main wine exporting countries.

I don't think a French farmer would find it attractive to grow grapes to get €0,76 per litre. I don't think the French, these days, would set a price that makes it attractive to do that. But it might be better than the alternative, at least in the short run. Pulling vines up is expensive, and there is currently no grant for it, and that's what you are supposed to do if you wish to cease cultivation. Though in practice some abandonment happens.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 4:38:48 AM

khmark7

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There is only so much shelf space out there and many of these wines won't get sold to the American consumer if they don't target a specific taste profile. These days the younger generation that drinks cheaper more affordable wines are they moving away from wine? I see lots of cider and seltzers so not sure what the buying habits are.

I love affordable CdR.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 5:16:34 AM

BenG

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From: Australian in Idaho
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quote:

ORIGINAL: ericindc

I had a question regarding the article saying again and again, that people arent buying at the $10 price point. Is that because a $10 wine 5 years ago and keeping the wine at $10 involved too much of a decrease in quality? Or that in general people arent buying super cheap wines and are buying at $15 or $20?

I think this article may have been posted before, or one like it. Young people (I presume, formerly a big part of the $10 wine market) are turning to spirits (gin is very popular), hard seltzers and craft beers.

https://wapo.st/44YwCj3

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 5:48:45 AM

DoubleD1969

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Younger people may be realizing that there is a large environmental impact from that $10 bottle - the amount of pesticides used, the amount of energy it takes to make a glass bottle and to ship it across the planet — and frankly, that the product just tastes bad.

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Post #: 11

RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 9:37:31 AM

ChrisinCowiche

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From: Cowiche, WA
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quote:

ORIGINAL: BenG

quote:

ORIGINAL: ericindc

I had a question regarding the article saying again and again, that people arent buying at the $10 price point. Is that because a $10 wine 5 years ago and keeping the wine at $10 involved too much of a decrease in quality? Or that in general people arent buying super cheap wines and are buying at $15 or $20?

I think this article may have been posted before, or one like it. Young people (I presume, formerly a big part of the $10 wine market) are turning to spirits (gin is very popular), hard seltzers and craft beers.

https://wapo.st/44YwCj3

^^^^ This. Walk through the alcoholic beverage aisle of any grocery store in the US. Seltzers, ciders, craft beers are taking more of the footprint previously occupied by Budweiser and CSM Riesling.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 12:11:51 PM

MB1991

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Gen Z is drinking less alcohol in general, and millennials drink less than the generation before them. Add to that the variety of available drinks and it's not great for the wine industry.

https://www.forbes.com/sites/claraludmir/2023/06/27/why-genz-is-drinking-less-and-what-this-means-for-the-alcohol-industry/?sh=3e4f063a48d1

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 12:41:02 PM

DoubleD1969

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quote:

ORIGINAL: MB1991
Gen Z is drinking less alcohol in general, and millennials drink less than the generation before them.

Wait till they get older

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 2:38:27 PM

skifree

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Hard to know if the dip in consumption of wine is part of a normal cycle related to the economy or whether it is a long term trend. The actions by CSM indicate they think the latter.....

Thanks for sharing the article Rich.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/8/2023 11:59:26 PM

Rich64N

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I have no problem recommending a Ch. Ste. Michelle $7 Riesling (on sale, list $10), and yes, I'll drink the dry Riesling. a comparable German Riesling is US$25 plus. I'll go for the Cold Creek Vineyard, adding $2, and I can find it in say, nowhere Missouri. Looking at the Ste Michelle Estates portfolio (old news to those of us in the PNW):

Red Diamond. Most are not WA grapes, even Chile. Bottom shelf $8
Columbia Crest. Mid-Shelf. All totally drinkable, decent, but not special 10 (OMG, the 2005-07 were under $5/bottle, outstanding)
Ch Ste Michelle. $16-30. Some $40-80. Always dependable.

This is a broken brand, I know that. And some outstanding wines have been produced, including a WE 100 pt CS in 2005. The Walter Clore red blend? (never under a 92 rating, I have cases of it). So these ARE wines CT folks will drink.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/10/2023 9:58:59 PM

peeks13

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Was at a WA state wine tasting tonight and CSM had a table. I mentioned this and he looked at me like, how the heck do you know this..I just found out myself today? He said those 40% of grapes represented 1% of their profits.

Blah blah blah, CSM doing moves before Antinori can get contracts on certain grapes.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/11/2023 7:42:00 AM

grizzlymarmot

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I predict that some acreage will go to solar farms. A lot of farmland here in the east is going that way also.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/11/2023 10:46:17 PM

Rich64N

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Some more info https://www.opb.org/article/2023/08/09/northwest-winemaker-ste-michelle-wine-estates-cuts-back-production-growers-worried/
This will be a big topic at the Auction of Washington Wines fundraiser at Ch. Ste. Michelle in Woodinville this weekend.

< Message edited by Rich64N -- 8/11/2023 10:49:30 PM >

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/12/2023 6:44:44 AM

khmark7

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quote:

ORIGINAL: MB1991

Gen Z is drinking less alcohol in general, and millennials drink less than the generation before them. Add to that the variety of available drinks and it's not great for the wine industry.

https://www.forbes.com/sites/claraludmir/2023/06/27/why-genz-is-drinking-less-and-what-this-means-for-the-alcohol-industry/?sh=3e4f063a48d1

So reading this article they are stating that the individuals they interviewed are very health conscious and are more concerned about taste, low alcohol and their overall health blah blah blah....I'm not sure that's painting the best picture. Everyone you talk with says they are health conscious and yet you see them eating like crap, smoke marijuana and slurping those Monster energy drinks like they are crack cocaine. I do think that this high alcohol craft beer and high alcohol 14-15%+ wine movement is being felt by people because you can really get yourself in trouble drinking those. Curious how many younger people they interviewed honestly cannot afford a lot of this stuff and if they are even in social situations where they would be entertaining alcoholic drinks, especially given we just endured 3 years of lockdowns and social rules due to the pandemic (depending on location). Then again maybe post pandemic the health trajectory of the world may improve....we can only hope.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/12/2023 11:56:29 PM

Rich64N

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Here is the local business perspective (ugh, 14 Hands restaurant wine - OK a CSM wine I won't drink, though the reserves are fake decent (fake as in this is a fake winery)) https://www.tri-cityherald.com/news/business/article278068072.html#storylink=mainstage_lead For those counting, the Woodinville and Prosser wineries are closed, guessing only Paterson and Sunnyside (bubbly) remain. I've been to the Paterson facility (I know Hollowine has too) - middle of nowhere is putting it mildly.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/13/2023 2:59:02 PM

WineGuyCO

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This also is a result of long time owner of CSM, Altria Group, selling to Sycamore whose pockets are not nearly as deep. Been an Altria, Philip Morris shareholder for 40 years.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/13/2023 5:23:39 PM

bradbobaggins

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Will be interesting to see how things evolve. Even if you're not a producer of grapes for CSM, this will obviously have a big impact on prices for all but the most expensive grapes. Thanks for sharing this.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/14/2023 9:06:50 AM

ChrisinCowiche

Posts: 7857
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From: Cowiche, WA
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quote:

ORIGINAL: Rich64N

Here is the local business perspective (ugh, 14 Hands restaurant wine - OK a CSM wine I won't drink, though the reserves are fake decent (fake as in this is a fake winery)) https://www.tri-cityherald.com/news/business/article278068072.html#storylink=mainstage_lead For those counting, the Woodinville and Prosser wineries are closed, guessing only Paterson and Sunnyside (bubbly) remain. I've been to the Paterson facility (I know Hollowine has too) - middle of nowhere is putting it mildly.

Pay wall or e-mail with mortgage info which I ain't providing to the Tri City Herald. :) The 14 Hands winery in Prosser was previously Snoqualmie, another CSM brand from a decade ago. I'd be surprised to see 14 Hands fold as a brand, it seems to outpace Columbia Crest, Two Vine and CSM itself in mid/bottom shelf reds. I have had it a few times but recent versions are too cloying.

On land use for solar, that is possible, but unlikely in the West due to water rights. In Washington, land WITH water rights, which is all grape farming land in Eastern Washington, goes for $50-$100K/acre higher in premium AVA's such as Red Mountain, Walla Walla. Land without water goes for $10K or less. Solar farms don't need water so can be installed on the cheap land and recently a few are happening east of Yakima. https://www.yakimaherald.com/three-solar-energy-projects-east-of-moxee/html_0e1d85e8-3b27-5fbe-95b4-797b13a26c4a.html This land is actually near CSM's Cold Creek Vineyard, but is on non-irrigated desert. When I was "ChrisinSunnyside" we lived close to here. More off the beaten path than even Paterson.

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RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/14/2023 9:19:48 AM

MB1991

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I'm not sure that millenials and gen Z are the only ones driving the energy drink market or if there's a ton of studies showing negative effect (at least compared to traditional soda and caffeine use).

Here's another article around younger generations drinking less, also citing a U of Michigan study: https://thehill.com/changing-america/well-being/3936579-why-is-gen-z-drinking-less/

If you have a statista account here's plenty of data points: https://www.statista.com/topics/10763/gen-z-alcohol-consumption-in-the-us/#topicOverview

https://www.texashealth.org/areyouawellbeing/Health-and-Well-Being/Study-Shows-Younger-Generations-Are-More-Health-Conscious-Than-Previous-Generations#:~:text=According%20to%20results%20from%20a,baby%20boomers%20at%2063%20percent). This study shows a Gen Z is the most health conscious of the generations.

Further, millenials and Gen Z put more emphasis on Experiental Measures (how you feel, energy levels) vs. Fact-Based measures (BMI, weight, blood tests) https://www.supermarketnews.com/consumer-trends/health-conscious-consumers-get-touch-their-feelings

All of these trends would lead to lower alcohol consumption, and/or amount of alcohol. I was in ATL this past weekend and actually went into a purely non-alcoholic "liquor store" that had nothing but non-alcoholic alcohol replacements (gin&tonics, mezcal, wine etc.)

< Message edited by MB1991 -- 8/14/2023 10:45:17 AM >

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Post #: 25

RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/14/2023 10:05:33 AM

khmark7

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From: Chicago suburbs
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quote:

ORIGINAL: MB1991

I'm not sure that millenials and gen Z are the only ones driving the energy drink market or if there's a ton of studies showing negative effect (at least compared to traditional soda and caffeine use). If you believe in Marijuana or not, there are medical benefits to it, including for anxiety and pain so to paint that as "unhealthy" is perhaps a stretch.

Here's another article around younger generations drinking less, also citing a U of Michigan study: https://thehill.com/changing-america/well-being/3936579-why-is-gen-z-drinking-less/

If you have a statista account here's plenty of data points: https://www.statista.com/topics/10763/gen-z-alcohol-consumption-in-the-us/#topicOverview

https://www.texashealth.org/areyouawellbeing/Health-and-Well-Being/Study-Shows-Younger-Generations-Are-More-Health-Conscious-Than-Previous-Generations#:~:text=According%20to%20results%20from%20a,baby%20boomers%20at%2063%20percent). This study shows a Gen Z is the most health conscious of the generations.

Further, millenials and Gen Z put more emphasis on Experiental Measures (how you feel, energy levels) vs. Fact-Based measures (BMI, weight, blood tests) https://www.supermarketnews.com/consumer-trends/health-conscious-consumers-get-touch-their-feelings

All of these trends would lead to lower alcohol consumption, and/or amount of alcohol. I was in ATL this past weekend and actually went into a purely non-alcoholic "liquor store" that had nothing but non-alcoholic alcohol replacements (gin&tonics, mezcal, wine etc.)

My point was that by interviewing people you get some serious bias and overall I would be more concerned with the actions that people make and overall drops in sales. As a health care professional I can tell you that the most unhealthy people on the planet will tell you that they are health conscious despite the obvious. If the younger generation isn't drinking wine so be it, but they are likely just replacing it with something else that is no healthier.

Marijuana is too far off the main subject in this thread and it will quickly become political.

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Post #: 26

RE: Way too Many Wine Grapes in WA State - CSM -40% - 8/14/2023 3:41:22 PM

DrBad

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quote:

ORIGINAL: khmark7

quote:

ORIGINAL: MB1991

I'm not sure that millenials and gen Z are the only ones driving the energy drink market or if there's a ton of studies showing negative effect (at least compared to traditional soda and caffeine use). If you believe in Marijuana or not, there are medical benefits to it, including for anxiety and pain so to paint that as "unhealthy" is perhaps a stretch.

Here's another article around younger generations drinking less, also citing a U of Michigan study: https://thehill.com/changing-america/well-being/3936579-why-is-gen-z-drinking-less/

If you have a statista account here's plenty of data points: https://www.statista.com/topics/10763/gen-z-alcohol-consumption-in-the-us/#topicOverview

https://www.texashealth.org/areyouawellbeing/Health-and-Well-Being/Study-Shows-Younger-Generations-Are-More-Health-Conscious-Than-Previous-Generations#:~:text=According%20to%20results%20from%20a,baby%20boomers%20at%2063%20percent). This study shows a Gen Z is the most health conscious of the generations.

Further, millenials and Gen Z put more emphasis on Experiental Measures (how you feel, energy levels) vs. Fact-Based measures (BMI, weight, blood tests) https://www.supermarketnews.com/consumer-trends/health-conscious-consumers-get-touch-their-feelings

All of these trends would lead to lower alcohol consumption, and/or amount of alcohol. I was in ATL this past weekend and actually went into a purely non-alcoholic "liquor store" that had nothing but non-alcoholic alcohol replacements (gin&tonics, mezcal, wine etc.)

My point was that by interviewing people you get some serious bias and overall I would be more concerned with the actions that people make and overall drops in sales. As a health care professional I can tell you that the most unhealthy people on the planet will tell you that they are health conscious despite the obvious. If the younger generation isn't drinking wine so be it, but they are likely just replacing it with something else that is no healthier.

Marijuana is too far off the main subject in this thread and it will quickly become political.

I think cannabis, in states where it's legal, is having a big impact on alcohol consumption in general, and young people especially. There are many strains and blends with CBD/CBG that have different effects from relaxation, high, sleep, and edibles don't come with the lung impacts. Craft drinks are also big and are what our "kids" will do for a fun night out with friends. There's more variety and fun drinks to try than trying to pick out a decent wine, which can actually hard to find. They do love having our wine when they come over, of course :-)

(in reply to khmark7)

Post #: 27