2021 Year in Review

As Bozzano & Co. steps into 2022, my team and I are feeling tremendous gratitude for our clients who have entrusted us with their bulk wine and grape needs, especially during such an unprecedented year as 2021. The data points we have collected through our many brokered transactions have allowed us to make some anecdotal observations about the state of the market—which we’re thrilled to pass along to you!

Typically, the bulk wine season begins in late January, around the Unified Symposium, and comes to a close around July, when wineries shut down the bulk wine receival pumps to prepare for harvest. However, 2021 was gangbusters all year and the season for bulk wine sales never really stopped. The highest volume sales months were February through April, but each quarter boasted strong sales by both volume and dollar value.

Cabernet Sauvignon's reign continues

Cabernet Sauvignon is usually Bozzano and Co.’s highest volume varietal, representing nearly 1/3 of all bulk wine sold last year, and the highest average price per gallon of any major variety.

Inventory of 2019 Central Coast bulk wines were largely depleted in the 4th quarter of 2020 by North Coast buyers securing inventory to hedge against supply losses because of fires. Forward thinking bulk buyers then recognized they needed to get an early start on the bulk market in 2021. The result was local brands focused on specific Central Coast AVA’s, like Paso Robles Cabernet Sauvignon, had to compete with North Coast buyers, which brought the average price of all vintages of Paso Cabernet Sauvignon sold in 2021 to nearly $13/gallon, a 6% increase over 2020.

Dark red blends

The demand for Cabernet Sauvignon put tremendous pressure on dark red blenders, like Syrah, Petite Sirah, and even Merlot. These varieties have always found a home as a Cabernet blender and have also been tremendously successful in a handful of big red blends.

An especially promising key insight is the strong demand for BDX and dark red blenders from cooler-climate AVAs such as Santa Maria, Santa Ynez in Santa Barbara County, and San Lucas and Hayes Valley in Monterey County.

These wines have often been unappreciated by the bulk market, and I hope that the renewed interest in these wines is a testament to the evolution of the consumer and their expectations of a more-sophisticated product.

Edna Valley AVA

We are very encouraged by the strong interest and sales in bulk wines we’ve seen in our local region, Edna Valley AVA. The volume of Edna Valley bulk wine sales in 2021 was up significantly, with both Pinot Noir and Chardonnay sales up over 100% by volume from 2020.

Often, an increase in bulk wine volume is a sign of a softening market, however bulk wine pricing in Edna remained strong with the average price per gallon of Pinot Noir nearly even with 2020, and a nearly 5% increase in the price of Chardonnay.

Edna Valley has long been a region capable of producing high quality and good yields, yet for many years most grapes within this region were under long-term contract or a land lease to select large wineries. There frankly were not enough grapes available or bulk wine consistently produced to allow for interest from other wineries.

Well, that has changed over the last 4 vintages, and active replants in the Edna Valley area will ensure that this region continues to deliver.

Wine clubs + white wine

Anecdotal evidence has also shown us a few other trends around white wine varieties. For starters, producers that bottle wine for national subscription wine clubs had an insatiable appetite for interesting wines. One of our clients once told me the recipe for success of a subscription wine club is to include a major variety from an unknown appellation, or an unknown variety from a major appellation. This rang true in 2021, especially for white wines. There was never enough Albarino, Viognier, or Pinot Blanc to go around.

Similarly, Muscat grapes and bulk wine were in short supply, resulting in a strong demand for both past and current vintage. Prior to harvest, locating Muscat grapes was quite the challenge as Muscat producers were largely in the Southern Interior, where it is more economical to grow almonds or pistachios. To compress demand even further, the Muscat crop was short, resulting in preharvest bulk wine contracts being reduced with the smaller crop.

Sauv Blanc is back

Our team was all a little surprised with the market appetite for Sauvignon Blanc this past year. Going into harvest, Sauvignon Blanc grapes were largely unavailable, especially from the Central Coast and sub-AVAs. However, suppliers willing to allocate volume to the bulk market have sold that wine at a premium I have not seen during my time in business.

By our calculations, Central Coast Sauvignon Blanc saw a 25% increase, from approximately $10/gallon in 2020 to nearly $12.50/gallon in 2021. In fact, the spot market average price of Central Coast 2021 Sauvignon Blanc bulk wine may overtake the average price of Central Coast 2021 Cabernet Sauvignon. It is clearly a good time to be a Sauv Blanc grower.

Central Coast strong

We further studied our data to better understand how many Central Coast bulk wines are being used to produce brands that carry an appellation of the Central Coast. We had to take some liberties as we don’t always know the end destination when we negotiate a bulk wine sale. However, after some educated guesses, we are confident that nearly 70% of all bulk wine sold by Bozzano and Co. in 2021 was bottled into a brand identifying the Central Coast or a region within it. Nearly 50% of all Central Coast bulk wine was sold to a winery that is headquartered within the Central Coast.

Here’s to 2022

Looking forward, we expect strong demand for Central Coast bulk wine and wine grapes through 2022. Buyers from both Central Coast and North Coast are actively shopping for 2021 bulk wines and 2022 wine grapes, and the bulk wine sales that we have seen already this year point to strong pricing for the year ahead.

Bozzano and Co. will continue to focus on working diligently to support our clients’ needs. We are committed to digging deeper than the “currently available” and “active buyers” list, and work creatively to find the perfect solution.

Our mission is to be of true service to the California wine industry, specifically our neighbors here on the Central Coast. It is our honor to be a small part of this incredible industry, and we thank you for your continued support.

All My Best,

“A rising tide lifts all boats.”