What is the Grape Data Tool?
Are you buying or selling wine grapes? “The Grape Data Tool is a price discovery tool that is accessible and easy to use,” said Cody Dahl from AgIS Capital, a firm specializing in agricultural investment strategies. The free tool provides a quick way for grape growers and wineries to view prices while negotiating grape contracts or seeking financial support. The Grape Data Tool was created by Gabriel Froymovich of Vineyard Financial Associates for his own use in providing financial planning services to the wine industry.
Gabriel, who specializes in forecasting, shares his tool as a public resource to encourage the wine industry to use data in making business decisions. Its public availability makes it especially useful for smaller organizations without analytical resources. The tool integrates data from every California Grape Crush Report and Grape Acreage Report back to 1991 in a simple Excel workbook.
What is in the Grape Data Tool?
The Grape Data Tool has one worksheet that calculates, average price per ton (Price), total tons (Yields) and bearing acreage (Acreage) of wine grapes based on one of the 17 grape pricing districts and variety entered by the user. The total dollar revenue (ΣRevenue) by district and variety is calculated annually for the past three decades. It is more of a system metric. Average yield per acre (T/ac) and price per acre ($/Ac) are two production metrics often used as a starting point for pricing negotiations. The year-over-year (y-o-y) percent change for these five data elements is also captured in the table.
One unique feature of the tool is the ability to evaluate the distribution of the prices of grapes in a district. The worksheet automatically calculates the median, or middle, grape price (Percentile Price) for a district by having the percentile set at 50. If there is a disparity between median and average price, adjustments to the percentile field can be made to get a sense of where the imbalance is within the district. The compound annual growth rate (CAGR) is also calculated and the lookup table allows you to specify time periods.
How Can the Wine Industry Uses the Tool?
The tool allows you to look up prices quickly. Cody Dahl finds the tool helpful for contracts that are older than ten years, making it easy to look up historical prices. The numbers should be used as benchmarks since there are a lot of other factors in grape pricing. Wineries and growers can compare different varieties – where is the most revenue, or will it be profitable? Checking the data before using predictive analytics is always advised.
The Advanced version of the tool also has a series of macros for more advanced statistics. “The tool allows you to drill down int a particular market segment” said Tony Correia, an authority on the valuation of vineyards and wineries. One of the five macros calculates the median inflation adjusted price of grapes for all districts and varietals. Data can be copied from the worksheet for further manipulation to account for other factors, such as average +10%, rolling 3-year average, etc.
How to Start Using the Grape Data Tool?
First, download the Basic version of the tool from the website, or e-mail Gabriel for the Advanced version that includes the macros. Suggest you get on the mailing list for any updates or new releases. In the Excel spreadsheet, read the About and Appendix pages first. Watch the Video Tutorial which explains how to use the Grape Data Tool. After you are familiar with the functionality of the worksheet, take a look at the other videos that provide examples for analysis.
The Excel data can be manipulated into visualizations, such as graphs and charts. Gabriel shares some of the charts he has been using here. These visual displays of information can be powerful in reports or presentations. They can be used by regional wine organizations to inform their growers and wine makers of grape pricing and total revenue for their district. Gabriel includes data documentation, links to primary sources on the worksheet, and his blog provides more technical discussions of the tool.
