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Wine Bottle and Grapes
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The harvest for 2013 is mostly in. Grape harvests are up from 2012 and quality is said to be superior to the last two years. Miles Prodan, executive director of the BC Wine Institute says, “The positive note from us is the quantity and quality from this vintage is very good.”
Manfred Freese of the BC Grapegrowers Association is also enthusiastic about this year’s crop, saying, “I think the quality is outstanding, especially for many of the red varieties.”
The B.C. wine industry is taking more of the domestic sales market this year than last so it’s good news all around. Almost.
As the industry grows many farmers have piled onto the wine industry bandwagon. Some of have done well, but others may have guessed wrongly about what grapes to plant. Freese says, “Too many farmers don’t do their homework.”
This year merlot production was much higher than demand and the price is correspondingly low.
Around half of BC's grape growers have contracts for their production, which give both buyer and seller some protection in terms of price. The half without contracts has to rely on their ability to predict what will happen, sales skills and luck. Freese says, “Some farmers will suffer a lot.”
He predicts 33,500 tons of grapes grown this year, and merlot is the single largest planting, making up 40% of the red crop. In past years reds have made up 52% of the crop and if those statistics hold true this year it means a merlot harvest of 7,000 tons.
Freese points out, “There are fads, but there are certain core varieties where there will always be demand.” He feels confident the merlot surplus won’t last. “The surplus could go on for another two or three years, but that could change very quickly. In the longer term there is no question we will be able to absorb the [merlot] crop.”
Devlin McIntyre is the owner of Salt Spring Vineyards. He is less confident. He says, “You grow through fads and merlot is definitely old news.”
Instead, he says, consumers are going pink. “As far as the consumer goes there is definitely a trend to rosé. Pink is big and sparkling is growing. We make our pink wine from Pinot Noir.”
Across the Strait of Georgia, snuggled in downtown Vancouver, is the Swirl VQA shop. Michelle Lemay is almost contemptuous. “I think people have had enough of merlot,” she declares. “I think cabernet franc is going to be THE grape of B.C. in the next few years.”
Freese says the mismatch between growers and buyers isn’t purely a merlot story. He says, “There were some other varieties also looking for a home like chardonnay and pinot gris.”
Growth on every Front
When Freese started growing grapes in 2004 there were 232 growers. BC Wine Institute numbers show that year a harvest of 16,642 tons produced 9,985,200 litres of wine. Last year 27,257 tons of grapes were used to produce 17,717,200 litres of wine, almost double. This year Freese predicts the harvest will be in the neighbourhood of 33,500 tons, which is an increase of 20% over 2012.
B.C. wines are also growing in the all-important metric of market share. VQA wine sales grew this year by 4.04 per cent, compared to 3.85 per cent for non-VQA wine sales.
While that percentage isn’t nearly as great as increases from other jurisdictions (top three growth rates in B.C. wine sales: New Zealand 14.8% growth, Spain 11.8% growth, U.S. 11.5% growth), the percentage growth hides the fact that B.C. wines are now the top sellers in the province by far.
In total sales, BC's non-VQA wines account for 23.9% of sales and BC VQA another 19.2%, giving a total of 43.1% of B.C.’s wine sales to B.C. wineries.
A major factor facing the wine industry is a global slump in production. A study by Morgan Stanley Research suggests global wine production will continue to fall, as it has every year since 2004. Production and consumption met a happy balance in 2010, but since then consumption has been relatively flat while production continues to go down. Overall, since 2004, one-quarter of Europe’s production has disappeared.
Other heavy weights in the industry have flatlined, and while Canadian wine production is growing, it is still a tiny portion of the overall market.
Clearly, in the coming years, the 'wine shortage' will increase, and will likely result in higher short-term prices for producers.■