November 2, 2005

California Winemakers See Banner 2005 Harvest

By Jim Christie

SAN FRANCISCO -- Thanks to a cool, dry summer and recent warm spell, California's grape harvest will exceed expectations in volume and quality, setting the stage for a banner 2005 vintage of affordable wines, winemakers say.

They expect a harvest of 3.15 million tons, which would be the state's second-biggest and up 14 percent from last year, with grapes of exceptional flavor and color.

"There is going to be a lot of really good wine to work with," said Peter Byck, chief executive of Winery Exchange Inc. in Novato, California, which makes wines for retailers, including Costco Wholesale Corp. and Albertsons Inc. "Consumers can expect really good value for 2005."

That will be seen at all price levels, with the 2005 vintage on par with the state's 1997 vintage, one of its best ever, Byck said.

"Across the board you're going to see good value," he said of 2005 wines, which will begin to appear on store shelves next year. "We think it bodes well for later next year for the whites and the following year for the reds."

With grapes to spare, winemakers will pay less to make their wine and will be able to pass along low prices, which U.S. consumers have come to expect with the explosion in value-brand wines.

California's $15 billion wine industry, long focused on making pricey premium wine, has been in a roll since Bronco Wine Co. launched its Charles Shaw brand for $2 a bottle.

Nick-named "Two-buck Chuck," the wine was an instant hit with cost-conscious consumers. Low-cost Australian brands and domestic rivals followed, adding impetus to consumer awareness that inexpensive wine need not be plonk.


California's 2005 harvest will allow winemakers to offer affordable bottles with greatly improved structure from prior vintages.

"The moderately priced and lower prices wines will probably be where the consumer sees the greatest benefit," said Dan Berger, publisher of Vintage Experiences newsletter. "This is what the vintage winemakers have been waiting for so they could make wines that are crisp and go better with food."

The volume of grapes points to intensifying competition among everyday wines of California and coastal appellations selling for $5 to $8 a bottle, said Don Sebastiani, chief executive of Don Sebastiani and Sons, a Napa Valley winemaker.

"There are just too many damned grapes," said Sebastiani, whose winery makes Pepperwood Grove and Smoking Loon wines. "Napa Valley is just drowning in excess fruit."

The Pinot Noir harvest likely will be down from last year, but grapes used for Chardonnay, Cabernet Sauvignon and Zinfandel wines are thick on the vine, Berger said.

Winemakers will be challenged to add capacity to make and store 2005 vintage wine, said Mark Houser, vineyard manager for Hoot Owl Creek Vineyards and Alexander Valley Vineyards in northern California.

"Some grapes probably will be left on the vine because wineries can't take them ... They just don't have space."

One outlet may be the export market, providing some comfort to grape growers concerned that prices will fall if domestic wineries turn them away.

"It feels a little bit like 1997 when the vineyards just kept on giving," said Glenn Proctor, a grape and wine broker with the Joseph W. Ciatti Co. in San Rafael, California. "It will allow California to be a little more aggressive with its bulk exports to Europe."