wine market outlook - the ciatti company market up… · 2010-2015 % change planting spain 6 ↓...
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WINE MARKET OUTLOOK
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John CiattiCiatti Company / Partner, Broker
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WINE MARKET UPDATE
CALIFORNIA & BEYOND
JUNE 21, 2018
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DEDICATED BROKERS IN 8 COUNTRIES
GLOBALLY BASED TO BUILD YOUR BUSINESS WORLDWIDE
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INTRODUCTION
• CIATTI CO 8 REGIONAL OFFICES WORLDWIDE
– WINE, GRAPES, & CONCENTRATE, ALCOHOL
– JOHN FEARLESS – HOPS, MALT, BARRELS
• GLOBAL PERSPECTIVE
• WORLD APPROACH – LOCAL KNOWLEDGE
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GLOBAL WINE PRODUCTION
VINTAGEWORLD
PRODUCTION
2017 247 MHL
2016 260 MHL
2015 275 MHL
Total 33.0 Million Tons
USA 12%
Argentina5%
Germany3%
Australia6%
New Zealand
1%So. Africa
5%Portugal
3%
Chile4%
Rest of World
6%
France19%
Italy21%
Spain15%
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GLOBAL ACREAGE TRENDS
COUNTRY2010-2015 %
CHANGE PLANTING
SPAIN 6 ↓ SOME REPLANTING
FRANCE 2 ↓ REMOVED YIELD RESTRICTIONS
ITALY 8 ↓
CHINA 42 ↑SOME VARIETALSGENERIC & TABLE
USA 4 ↑ REMOVAL OF GENERICS / PLANTINGS OF VARIETALS
ARGENTINA 3 ↑ MALBEC
CHILE 3 ↑CABERNET SAUVIGNON, SAUVIGNON BLANC, MERLOT, PINOT NOIR
AUSTRALIA 13 ↓ REMOVAL OF GENERICS
SOUTH AFRICA 2 ↓
GERMANY 0 ↔
NEW ZEALAND 12 ↑SAUVIGNON BLANC, PINOT NOIR
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NORTHERN HEMISPHERE – EUROPE
ITALY FRANCE
SPAIN
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ITALY HISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– PINOT GRIGIO, PROSECCO
– VARIETALS – TRADITIONAL SALES
• TIGHT INVENTORY – EFFECTS EVERYONE – BUYER?
• VINE ACREAGE: 2000 2012 2016
2.10 (MILLION ACRES) 1.90 (MILLION ACRES) 1.68 (MILLION ACRES)
850,000 HECTARES 769,000 HECTARES 680,000 HECTARES
’12 ’13 ’14 ’15 ’16 ’17
6.9 8.2 6.8 7.5 7.2 6.0
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FRANCE HISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– ROSÉ, SPARKLING
– VARIETALS – TRADITIONAL SALES
• DECLINING DEMAND LOCALLY – EXPORT GROWTH TO U.S. & CHINA
• VINE ACREAGE: 2000 2012 2016
2.23 (MILLION ACRES) 1.98 (MILLION ACRES) 1.93 (MILLION ACRES)
900,000 HECTARES 800,000 HECTARES 780,000 HECTARES
’12 ’13 ’14 ’15 ’16 ’17
6.3 6.4 7.2 7.3 6.6 5.6
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SPAIN HISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– GENERICS, CONCENTRATE & GRAPE SPIRITS
• EXPORT TO EUROPE & CHINA
• VINE ACREAGE: 2000 2012 2016
2.96 (MILLION ACRES) 2.47 (MILLION ACRES) 2.47 (MILLION ACRES)
1,200,000 HECTARES 1,000,000 HECTARES 1,000,000 HECTARES
’12 ’13 ’14 ’15 ’16 ’17
4.7 6.9 6.7 6.4 6.4 5.1
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EUROPEAN OUTLOOK
• EXPORTS TO THE WORLD
– ITALY & FRANCE – CASEGOODS
– SPAIN – BULK SUPPLY
• SUPPORT & SUBSIDIZE – MARKETING
• HUGE CONSUMER – BUT DECLING CONSUMPTION
• REGULATIONS & TAXES
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SOUTHERN HEMISPHERE
CHILE
SOUTH AFRICA
ARGENTINA AUSTRALIA
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SOUTHERN HEMISPHERE
• VARIETAL LEADER
– MARKET DRIVER – PRODUCTIVE – NEWER VINES
• EXPORTS REQUIRED
– POPULATION LACKING
• GLOBAL PLAYERS
– PERSONALITY
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ARGENTINAHISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– MALBEC
– GENERICS / CONCENTRATE – WHITE
• EXPORT TO EUROPE & CHINA
• VINE ACREAGE: 2000 2012 2016
593,000 ACRES 546,000 ACRES 556,000 ACRES
240,000 HECTARES 221,000 HECTARES 225,000 HECTARES
’13 ’14 ’15 ’16 ’17 ’18 Est.
3.0 2.9 2.6 1.9 1.8 2.3
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CHILEHISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– CABERNET SAUVIGNON, MERLOT
– PINOT NOIR, SAUVIGNON BLANC
• FREE TRADE AGREEMENTS – MODERN VINEYARD – QUALITY
• VINE ACREAGE: 2000 2012 2016
420,000 ACRES 494,000 ACRES 510,000 ACRES
170,000 HECTARES 200,000 HECTARES 206,000 HECTARES
’13 ’14 ’15 ’16 ’17 ’18 Est.
2.0 1.5 2.0 1.6 1.5 1.8
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AUSTRALIAHISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– CHARDONNAY, PINOT GRIGIO
• NET EXPORTER – CHINA BIG MARKET – US & UK
• BALANCED MARKET TODAY
• VINE ACREAGE: 2000 2012 2016
445,000 ACRES 418,000 ACRES 370,000 ACRES
180,000 HECTARES 169,000 HECTARES 150,000 HECTARES
’13 ’14 ’15 ’16 ’17 ’18 Est.
2.0 1.9 1.8 2.0 2.1 2.0
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SOUTH AFRICAHISTORY: CRUSH TONNAGES (MILLION US TONS)
• KEY VARIETALS
– CHARDONNAY, CHENIN BLANC, BRANDY
• DEMAND FROM EUROPE – CURRENCY FLUCTUATES
• VINE ACREAGE: 2000 2012 2016
247,000 ACRES 323,000 ACRES 321,000 ACRES
100,000 HECTARES 131,000 HECTARES 130,000 HECTARES
’13 ’14 ’15 ’16 ’17 ’18 Est.
1.6 1.7 1.5 1.5 1.6 1.4
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ASIA
• CHINA: POPULATION 1.4 BILLION
– PLANTINGS 1 MILLION ACRES 1.2M
– MAINLY GENERICS & TABLE
– ALL USED INTERNALLY
– WORLD BUYER – GROWING WINE CONSUMER
• JAPAN/KOREA/HONG KONG
– POTENTIONAL GROWTH – TTP
• RUSSIA
– CHEAP BUYERS
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USA
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US WINE SHIPMENTS
• TOTAL USA
– DOMESTIC (-1%) (-0.6 M/CASES)
– EXPORTS (-9%) (-3.4 M/CASES)
• IMPORTS
– CASEGOODS (+3.5%) (+3.5 M/CASES)
– BULK (+5.6%) (+5.6 M/CASES)
• TOTAL US MARKET
– IMPORT & DOMESTIC (+2%) (+9.7 M/CASES)
SOURCE : GOMBERG-FREDERICKSON
YEAR END 2017
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USA – TOTAL COUNTRY HISTORY: CRUSH TONNAGES (MILLION US TONS) – ALL GRAPES
• SALES
– DOMESTIC – 85% - GROWING
– EXPORT – 15% - DECLINING
• EUROPE/CANADA/ASIA
• GROWTH OF PREMIUMS – DECLINE OF VALUE BRANDS
• TRANSITION TO MEET DEMAND
• VINE ACREAGE: 2000 2016
(1,013,000 ACRES) (1,034,000 ACRES)
410,000 HECTARES 419,000 HECTARES
‘12 ’13 ’14 ’15 ’16 ’17
4.7 5.0 4.8 4.4 4.7 4.6
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CALIFORNIA
2
3
4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Ton
s in
Mill
ion
s
Winegrape Other Crush
4.01
STATEWIDE GRAPE CRUSH
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CALIFORNIA85% OF US PRODUCTION
• WINE GRAPES – COAST VS. VALLEY
• GENERIC VS. VARIETAL
• GRAPE CONCENTRATE
– FOOD/BEVERAGE
– WINE BLENDING
• BRANDY & ALCOHOL
• CONSOLIDATION – BIG GET BIGGER
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CALIFORNIA
Pinot Noir6%
French Colombard
8%
Zinfandel9%
Cabernet Sauvignon
14%
Chardonnay15%
Other Varieties
26%
Muscat of Alexandria
5%
Rubired 6%
Pinot Gris 6%
Merlot6%
KEY VARIETIES
• CHARDONNAY
• CABERNET SAUVIGNON
• PINOT NOIR
• PINOT GRIS
• SAUVIGNON BLANC
• MERLOT
• ZINFANDEL
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CLOSING
• INVENTORY
– STABLE BUT CHANGING – WHO’S SELLING?
– BUYERS NEEDED
• CAPACITY
– TIME OF HARVEST
– STORAGE & PROCESSING
• QUALITY
– ULTIMATE KEY
• COMPETITION
– OTHER BEVERAGES
– CANNABIS
• COMMODITY CYCLES – ALWAYS CHANGE
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CIATTI REPORTS / PUBLICATIONS
- CALIFORNIA MARKET REPORT
- GLOBAL MARKET REPORT
- WWW.CIATTI.COM
JOHN CIATTI
415/458-5162
THANK YOU FOR YOUR TIME AND
ATTENTION
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