Bad weather in the Cognac area and the 2013 harvest

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françois
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Bad weather in the Cognac area and the 2013 harvest

Postby françois » Sat Jul 13, 2013 4:53 pm

Two weeks ago I went to the area of Cognac for my usual monthly trip in the cognac growing district. Apart from the normal discussions with spirits professionals, I met several vinegrowers in order to get a better understanding of the market.

Inevitably we ended up discussing about the current state of the crop. As you may or may not know, there was almost no spring in southwestern France (or should I say in 99% of continental France!). As a result, the development of the vines of the most common varietal (Ugni Blanc) was more than 3 weeks late vs. average. Of course I shot many pictures, and you will find some of them below.

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Most vinegrowers are becoming concerned that the 2013 crop's ultimate quantity will be very low, because pollenation was curbed by the bad weather. Depending on what the weather on the months of July and August will be, individual grapes may reach a normal size, but it seems that each vine will carry much less grapes than normal, so that the yield per vine will be seriously affected. No doubt this will have consequences on the prices during the next distilling season, and the major houses will probably have to increase the amount they pay to producers -- once again.

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When I visited them 2 weeks ago, one of the vinegrowers was even in the midst of a mildew attack on one of his fields, but fortunately the weather turned warmer and drier about 10 days ago, so the mildew risk factors should be contained by now. Of course vinegrowers will have to check other illnesses that affect vines, but to them this is business as usual and should not be a concern.

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According to the latest estimates, grapes are now a bit less than 20 days late in their development, and barring any new developments, harvests may begin in earnest mid-October.

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I'll go back to the cognac growing district in the beginning of August, and will make sure to update you about the current condition, if that is of any interest to anyone.

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(FYI, the vines on the photos come from a very interesting and unusual spot in the Fins Bois area, about 800 meters from the nearest river, more than 100 meters above sea level, looking towards the south, and with trees offering protection from the prevailing winds. The last image is a close-up of the grapes: many of them were not pollenated and consequently cannot develop.)

Pierre
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Re: Bad weather in the Cognac area and the 2013 harvest

Postby Pierre » Sat Jul 13, 2013 8:08 pm

Thanks for the update.
I don't really know how it works for the pricing, you say the prices will be impacted directly in 2014 ? Should we pile up right now or wait for a 2015 then ? :P

françois
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Re: Bad weather in the Cognac area and the 2013 harvest

Postby françois » Mon Jul 15, 2013 6:27 am

Well the prices I alluded to relate to the B2B market between:
(i) the vinegrowers and distillers, who are structurally looking to sell the wines and spirits they produce,
(ii) the trading houses (Hennessy, Martell, and so on), who are structurally looking to buy spirits in order to replenish their inventory.

These B2B prices have been steadily increasing for 4 years, and given the increasing difficulty for cognac houses to source quality spirits, the current trend is not going to change when the next distilling season comes. But one has to bear in mind that these B2B prices are only remotely connected to the B2C prices "we" (i.e. the consumers) pay. The B2C prices are influenced by other factors than supply and demand of wines and spirits, among others: margin policy, market demographics, brand management, export markets, and so on (there really is a lot of them).

So an increase in B2B prices does not necessarily imply an increase in B2C prices, even though most cognac houses will be more than happy to pass through these increases to the final consumer ;)

BSinTX
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Re: Bad weather in the Cognac area and the 2013 harvest

Postby BSinTX » Tue Jul 16, 2013 12:41 am

Interesting information for sure. This is one of those "behind the scenes" issues where folks like me don't get to see every detail. Sure we drone on and on about price, but not having a good grape season will cause this to happen.


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