
An Example of Different Types of Grape Price Escalators
Long-term grape contracts require a mechanism to dictate price throughout the term of the contract. These mechanisms can make an enormous difference in the profitability of the contract for both sides. The chart below is an illustrative case study. It assumes a three-year contract was signed for District 11 (Lodi) Zinfandel that was priced at $900 in 2015. Six types of escalators/indexes are examined: Inflation: Some contracts index to inflation, which I typically define a
Where are Napa Cabernet prices going?
Cabernet Sauvignon from Napa is the market leader in grape prices and that is not going to change anytime soon. In fact, it will not surprise many of my readers to hear that prices are almost certainly going up. But by how much? My Projections I use my own proprietary methods to project prices. I have two methods: one is used for long-term projections and attempts to predict cyclical effects. It is meant for long-term planning and must be adjusted annually, since the data t
Where are Sonoma County Zin Prices Headed?
In the last blog post, we took a look at where statewide winegrape prices are going. That analysis requires looking at many different grape types, across varieties and appellations. In this post, we’ll look at a specific case: Sonoma County zinfandel. In fact, we’ll look at a specific vineyard that I’ll use as an example (everything is kept anonymous, of course, so pardon the bad, fake names.) The projections that are used as a basis for this analysis are valid for Sonoma Cou