1. Allied Grape Growers, 2014. All rights reserved. WiVi Central Coast 2014 State of the Winegrape Industry Nat DiBuduo Allied Grape Growers March 19, 2014

2. Allied Grape Growers, 2014. All rights reserved. Today’s presentation utilizes information obtained via Allied Grape Growers’ (AGG) annual Nursery Survey combined with critical evaluation of reports and data made available by the State of California. Wine shipment data is courtesy of the Gomberg Fredrikson Report. AGG’s internal operations data along with numerous pieces of anecdotal evidence was also used in the formulation of conclusions.

3. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions…….

4. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #1: How did the 2013 crush size up?

5. Allied Grape Growers, 2014. All rights reserved. California Production Answering Some Key Industry Questions How did the 2013 crush size up?

6. Allied Grape Growers, 2014. All rights reserved. A regional look at production, stated in tons crushed How did the 2013 crush size up? Answering Some Key Industry Questions

7. Allied Grape Growers, 2014. All rights reserved. A look at average yields statewide How did the 2013 crush size up? Answering Some Key Industry Questions

8. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #1: How did the 2013 crush size up? Answer: Clearly above recent averages, both in total production and in per acre yields

9. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #2: What are the Central Coast grape pricing trends?

10. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions What are the Central Coast grape pricing trends?

11. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions What are the Central Coast grape pricing trends?

12. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #2: What are the Central Coast grape pricing trends? Answer: Mostly positive in recent years, with minor categorical weaknesses

13. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #3: How many acres do we really have?

14. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions How many acres do we really have? Notes:2013 state data will be released in April of 2014. DPR data may include raisin variety acreage classified as wine.

15. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions How many acres do we really have?

16. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #3: How many acres do we really have? Answer: Much more than the state has historically reported or estimated

17. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #4: Are Central Coast acres under- reported?

18. Allied Grape Growers, 2014. All rights reserved. District 6 Albarino Albarino Gewurztraminer Gewurztraminer Gruner Veltliner Gruner Veltliner Malbec Malbec District 7 Primitivo Primitivo Are Central Coast acres under-reported? Answering Some Key Industry Questions Varieties that are under-reported in the Central Coast (for > 50 acres)

19. Allied Grape Growers, 2014. All rights reserved. Are Central Coast acres under-reported? Answering Some Key Industry Questions Following analysis of Central Coast Acreage and Production, it was concluded that the combined District 7 & 8 reported bearing acreage is only off of actual by less than 1%.

20. Allied Grape Growers, 2014. All rights reserved. Are Central Coast acres under-reported? Answering Some Key Industry Questions An estimate of non-bearing acres from 2012

21. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #4: Are Central Coast bearing acres under-reported? Answer: No, the Grape Acreage Report is capturing nearly all bearing winegrape acres.

22. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #5: What are growers planting today? (other than almonds)

23. Allied Grape Growers, 2014. All rights reserved. 29% White 71% Red Other Reds Include: Grenache Cab Franc Syrah Malbec Tannat Other Whites Include: Gewurztraminer Riesling Viognier Other florals What are growers planting today? Answering Some Key Industry Questions

24. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #5: What are growers planting today? (other than almonds) Answer: Cabernet Sauvignon…. and a few other varieties

25. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #6: What about the drought?

26. Allied Grape Growers, 2014. All rights reserved. What about the drought? Answering Some Key Industry Questions

27. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #6: What about the drought? Answer: The drought will undoubtedly cause concern and loss for California winegrape growers. Production will likely be negatively impacted.

28. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #7: What are the regional planting trends?

29. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions What are the regional planting trends? A high percentage of the “Value” plantings are in Lodi

30. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions What are the regional planting trends? Varieties charted are Chardonnay, Cabernet Sauvignon, Merlot, Pinot Noir and Zinfandel.

31. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #7: What are the regional planting trends? Answer: Coastal planting of major varietals has increased substantially. Interior planting has shifted north to Lodi.

32. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #8: Are we headed for surplus, balance or shortage?

33. Allied Grape Growers, 2014. All rights reserved. Are we headed for surplus, balance or shortage? Answering Some Key Industry Questions Average Statewide Yield = 7.29 TPA Assumes no escalation in the current rate of annual vineyard removals……. (<2% per year).

34. Allied Grape Growers, 2014. All rights reserved. Forecast shows production growth outpacing shipments in the near future Are we headed for surplus, balance or shortage? Answering Some Key Industry Questions

35. Allied Grape Growers, 2014. All rights reserved. Forecast shows acreage growth beginning to outpace the trendline by 2017. Are we headed for surplus, balance or shortage? Answering Some Key Industry Questions

36. Allied Grape Growers, 2014. All rights reserved. Answering Some Key Industry Questions Question #8: Are we headed for surplus, balance or shortage? Answer: We are not forecasting a shortage in the foreseeable future

37. Allied Grape Growers, 2014. All rights reserved. Questions? You may download or view a copy of this presentation at: www.alliedgrapegrowers.org