The release of the 2021 Grape Crush Report recently indicated wine grape production in California totaled 3,877,584 tons, a 9.2% increase of grapes crushed from 2020. In terms of varietals, Chardonnay continues to account for the largest percentage of the total crushed at 16.0%. Cabernet Sauvignon makes up the second largest percentage of the total crush at 15.3%. The California Crush Report is a well-established data source for wine industry professionals, therefore an understanding of its uses, potentials and limitations is important. Besides capturing overall state and regional trends, how are wineries using this report to make business decisions?
What data is in the Grape Crush Report?
The Grape Crush Report is released annually by the California Department of Food and Agriculture (CDFA) in collaboration with the USDA National Agriculture Statistics Service (NASS) to fulfill reporting requirements established by the Clare Berryhill Grape Crush Act of 1976. This report that is unique to California comes from Grape Crush Survey completed by approximately 3,200 establishments that crush or purchase grapes in the state. Although the survey process is time consuming to complete for winegrowers and wineries, the results are an important source of data and information.
The report provides the tonnage of grapes crushed, Brix degrees at harvest and weighted average prices by grape type, including raisin and table grapes, and varietals, further broken down by the 17 grape pricing districts. The prices of grapes sold creates a price reporting system used by wineries and growers as a valuable reference point for grape contracting. The information is also used by grape brokers and financial institutions for crop insurance disbursements, appraisals, investments and loan purposes.
How is data from the Grape Crush Report used?
Most wineries and growers download and analyze the associated spreadsheets, often using analytical tools that convert data into reports or dashboards. Smaller wineries use the 150-page paper version, which is tightly packed with tables. The report has ten tables. Table 10 tends to be the mostly widely used as it determines weighted average prices by type, varietal and district. Table 8 is used for additional analysis as it includes all the transactions, including the degrees of Brix at harvest which is used to make price adjustments. For those wineries with less resources, Gabriel Froymovich of Vineyard Financial Associates developed a “Grape Data Tool” which he shares freely a few months after the release of the Grape Acreage Report (April 20, 2022).
The Grape Crush Report has its limitations. The data are self-reported through a cumbersome submission process with results published four months after harvest. The report only compares to the previous year, with limited historical context. It uses crush districts, which encompass multiple counties or cross county lines. It does not capture the tons that were left on the vine, referred to as dropped fruit. The pricing in this report is based on sold grapes, it does not include grapes used by the grower in their own production.
What additional analysis on the Grape Crush Report is being done?
An article in the Journal of Wine Economics (Sambucci and Alston, 2017) showed that the true value of the grapes is 14-20% more than listed in the report because the grapes crushed to the grower’s account are not included. A follow-up in the Agricultural and Resource Economics (ARE) Update (Sept/Oct, 2017) provided an alternative approach by inferring the prices of the grapes used by the growers. Since weighted average assigns importance to larger numbers, there is also built-in bias towards larger contracts in certain regions. Consultant services, such as Vintage Economics, provides an assortment of additional metrics to address some of the shortcomings of the report.
