1	Sonoma Valley Vintners & Growers 2007 Quality Conference John F. Ciatti, Partner Joseph W. Ciatti Co., LLC 1101 Fifth Ave # 170 San Rafael, CA 94901 www.Ciatti.com 415/458-5150
2	Points to Discuss Sales Update Winegrape Market The Future International Bulk Market Questions
3	Wine Shipments YTD (Nov ‘06 ) Wine shipments +2.2% (bttld) 2.2% Overall YTD GFA Premium Wine Index +7% Premium growth offset by losses in economy wines Bulk Exports +2% YTD; Bottled -2% YTD Limited gain given world supply
4	Wine Shipments YTD (Nov ‘06) Imports growing faster than domestic Total imports to US + 9% (bottled +2%, Bulk +109%) CA > US +2.8% Australia +4%; Spain +13%; France +24% (mostly bulk) Imports could reach 30% of all wine consumed in U.S. by end of the year.
5	Wine Shipments YTD (Nov ‘06)
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7	North Coast Tons
8	North Coast Prices
9	Sonoma County White Grape Tonnages 2002 –2006
10	Sonoma County White Grape Prices 2002 –2006
11	Sonoma County Red Grape Tonnages 2002 –2006
12	Sonoma County Red Grape Prices 2002 –2006
13	2006 Winegrape Market PINOT, PINOT, PINOT!!!! Large PN Crop CH picked up late; CS and ME unsold or custom crushed ’05 Hangover - Major wineries on sideline or selling fruit/wine Notice on existing contracts - Pricing more reflective of spot market
14	California Winegrape Acreage 2005
15	Sonoma Winegrape Acreage 2005
16	2007 Grape Market Outlook Overall Market will improve CH continues to strengthen – especially Sonoma, Santa Barbara & No. Mont. Cty PN Strong – but less pkg deals. Spot Mkt will soften SY weakness outside of varietal market CS will show signs of improvement – prices still below expectations – Opportunistic buyers ME continues to be challenged. Significant amts of grafting
17	CHARDONNAY Pricing Valley $3.00 – 4.00 Coastal $6.00 – 9.00 (’05 $3.50 – 5.25) Sonoma/Napa $10.00 – 15.00
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19	SAUV BLANC Pricing Valley $3.50 – 4.50 Coastal $5.00 – 7.00 Sonoma/Napa $7.00 – 10.00
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21	PINOT GRIGIO Pricing Valley $7.00 – 9.00 Coastal $10.00 – 12.00 Sonoma/Napa $12.00 – 16.00
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23	CAB SAUV Pricing Valley $2.50 – 4.50 Coastal $4.50 – 8.00 Sonoma/Napa $8.00 – 22.00
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25	MERLOT Pricing Valley $2.50 – 4.00 Coastal $4.00 – 7.00 Sonoma/Napa $6.00 – 12.00
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27	ZINFANDEL Pricing Valley $6.00 – 8.50 Coastal $8.00 – 10.00 Sonoma/Napa $10.00 – 16.00
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29	SYRAH Pricing Valley $3.50 – 5.50 Coastal $5.00 – 8.50 Sonoma/Napa $9.00 – 14.00
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31	PINOT NOIR Pricing Valley N/A – N/A Coastal $14.00 – 20.00 Sonoma/Napa $20.00 – 25.00
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33	USA vs. World
34	Australian Production
35	Imported Wine Shipments Bulk/Bottled YTD Sept
36	International View All wineries weighing global opportunities – the supply is there! Bulk importing could increase category base w/ short varieties – produce future CA demand? Imports will continue to grow if consumers indifferent and cost advantages exist CA must compete based on quality and price Need Understanding Sonoma/CA/World Supply/Demand Balance
37	Who is Today’s Buyer? Larger wine companies starting to look more like negociants Wineries acquiring & creating new brands For in demand varieties, negociants starting to look more like wineries Buying grapes and custom crushing In today’s longer market, growers starting to look more like wineries Getting into the wine business either by custom crushing or building their own wineries
38	What does this mean for growers? For longer varieties, buyers will remain cautious & look to secure a significant % of needs from the bulk market. In the near future growers will still be selling bulk wine &/or grapes at less than desirable prices For tighter varieties, a great opportunity to sell fruit at good prices to better buyers. As market tightens, negociants will need to source grapes and growers will be able to sell as fruit not wine
39	"’06 Crop severly impacted by..." ’06 Crop severly impacted by ’05 hangover Strong early season bulk activity Market should strengthen, when we move through ’05 bulk, Ltd. New Acres/Growing Demand ’07 grape demand to improve – longer term contracts CH/PN PN may soften on spot, but will remain solid Long term effects to CA of off shore sourcing? “Future looking Brighter”
40	E- Newsletter To sign up for our E-Newsletter “Ciatti Insight” Email Lora at Lora@ciatti.com
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42	Thank You for your time and Attention Joseph W. Ciatti Co., LLC T.415/458-5150 www.ciatti.com