Posted by: Thomson Vineyards | September 14, 2011

Free Agent Fruit

It's Good Not To Be Mr. Irrelevant

Yields are so significantly down that every wine grape broker has called me in the last 72 hours. Grower Reps are stalking me. Homewinemakers and microcrush facilities have begun begging me to spare just 250 lbs or a half ton here or there.

Having heard that we may have Pinot Noir, Chardonnay, and Merlot still available they’ve resorted to multiple voicemails followed up by text messages.

I’ve pretty much started exiting our driveway with one eye on my review mirror looking for an unmarked car.

I’ve also been sporting my “Free Agent” t shirt on an every other day basis it’s getting so absurd…and yes, I’ve taken to calling them back asking just who’s the client and what exactly their price point is before I reveal just how much tonnage I have left. If you don’t hit the magic number, the call is over. Speak to my agent if you don’t believe it.

A month ago a winemaker walked his contracted block, of three years, and asked how the market was. I said I was completely sold out, but not to worry his fruit resided safely on the reserve list.

“So others are waiving dollars in your face?” he asked.

“Not dollars. Hundreds of dollars.” I answered.

“I guess that’s the beauty of the evergreen contract.” he retorted.

I asked multiple winemakers, multiple times, to sign evergreen contracts in 2009. Just one was a smart enough to sign his name to one. Many Growers are now strongly advising other Growers to not sign an evergreen this year, or the next. I agree and have cut off all long term discussions for the duration.

I’ve spoken to multiple Grower Reps over the course of the last three years attempting to gain recognition for the fact that their Carneros flagship brand would be better marketed if their large publicly held company could tout that they continue to source fruit from Old Carneros Family Farmers.  I’ve even gone so far as to point out to those large publicly held companies that Mr. Mondavi’s Chardonnay program and brand would be better represented if they revisited the idea of sourcing fruit from where it all began…

Guess which two Grower Reps have been texting and calling to see if I have any Chardonnay grapes for sale?

Nevertheless prices are well on their way to being up, way up. And God isn’t creating anymore Carneros land. One of those two Grower Reps has been instructed by HQ to buy up every berry he can find of Carneros Chardonnay and Pinot Noir and he’s offering above district 4 average price. He even entered into a preliminary discussion with me related to a planting contract for 30 acres two weeks ago.

A founding member of the newly formed Napa Valley Mexican-American Vintners Association (NVMAVA) told me last Thursday over Mimosas at The Freemont Diner that if their deal goes through in China, they’ll be completely out of the grape growing business and fully into the wine business, significantly depleting some of the major Champagne houses contracted fruit sources…

Some Grower out of Wildhorse Valley posted Chardonnay two months ago for $3,450/T. I thought that was a bit extreme for an appellation with little to no prestige. As far as I can tell though, the fruit is gone.

And then we come to just what price fruit from a “prestigious” AVA can command. In years such as this, whatever price the Grower is smart enough to set it at.

2011 Prestigious Thomson Vineyard Carneros Chardonnay

One would think that as brokerages themselves release market updates, wine industry publications run the headline time and again read by countless winemakers, the message would be getting through: markets are on fire, prices skyrocketing up, and inventories severely depleted.

Since clearly it’s not…with my Free Agent t shirt on and Monday Night Football queued up, let me lay it out for you:

  • Those late to the game: There is NO fruit left. Should have had your scouts out earlier, got the go ahead to bid higher, or told your GM to loosen the purse strings before the other teams could get there.
  • Buyers who played pricing games in a sellers market would be well served revisiting the basic principles of Supply and Demand…or just get familiar with the draft process and what it means to entertain a Free Agent. Maybe watch Jerry McGuire. Something. Anything to understand how this all works.
  • If you’re a commercial grower don’t sign an evergreen this year, talk to your neighbors about what the bottom line price should be for anyone’s fruit coming out of your prestigious AVA and don’t back away from that line. Once you’ve found a team with a climate you can stand and a price that designates your true worth then consider signing a contract. Maybe hosting talks focused on discussing the matter could be a job for all the growers organizations out there. Just a suggestion.
  • If you’re a lifestyle grower with 2 acres of Cab – in years such as this your fruit is just as valuable as the commercial growers. Get enough 2 acres blocks of Cab together and next thing you know you’ve got a truckload of fruit. Don’t mistake the fact though that your vineyard management company is probably not as invested in selling your fruit for as much as you would or as much as you could get were you a larger grower and harvesting 2 acres is a pain in the ass for labor crews, therefore when the three weeks of heat coming our way momentarily actually get here – you will 32 out of 32 times be prioritized lower on the list.
  • See above. This is how dire the straits are at the moment. And know that I am currently working out my pricing on second crop fruit. You should be too.
  • Anyone in the industry who continues to herald how low the yields are, but how excited the winemakers are about the quality of fruit should revisit the old saying, “the best vintage a winemaker ever made is the vintage he’s selling right now.” Then get out of your office and into the game. You’re going to work and pay for any of the fruit you find still remaining out there. Two. Or Three times that of what you paid in 2009.
  • If you were one of the lucky ones to get a slice of prestigious AVA fruit with a good grower this year try to hold onto them until they will discuss a long term contract. Cases of beer on the doorstep after harvest, invitations to harvest and holiday parties, are both good starts.
  • If you weren’t one of the lucky ones. There’s no better time than now to take a good look at yourself in your rear view mirror and ask yourself, “Who’s Your Farmer?” Then get out your checkbook in time for next year’s draft which will begin early. As in January early.

No, Seriously Who's Your Farmer?

Call me, text me, stalk me. I may tell you what I have left…

It’s good to be a Free Agent.

UPDATE: As of this morning a mid sized lot of Thomson Vineyard Carneros Chardonnay came back online when a new GM told a Free Agent Winemaker that he wasn’t interested in having a high end Chardonnay in his high end program dedicated to Cabernet. Although an evergreen contract had been put in place earlier this year, I’ve gotten the go ahead to sell it, and am now entertaining offers.

UPDATE: As of 9/19/2011 9:45 a.m. Another Carneros Old Family Farmer has between 55-65 tons of well cared for Pinot Noir available. I take no commission and my only objective is to get good grower’s good fruit, sold at good prices. Text your price per ton offer to 707.227.8745

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Responses

  1. It’s good to be in the catbird seat, ain’t it? The downside to the low yields driving up prices at just this time is that current revenue projections for wineries aren’t rising on the same trajectory. Smart GMs at many wineries are just going to have to allow themselves to be priced out of the market, and make less wine in 2011. Others are going to over-commit and then plead poor when the bills come due. Word to the wise – set aside some of your windfall to pay for collections and legal actions. At least be prepared for the 12-month payoff plan.

  2. [...] Free Agent Fruit [...]

  3. “Oversupply” will return


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