After the strong 2021-2022 Peru grape season, we discuss early predictions and expectations as this year’s harvest approaches.
Global Grape Market
“We are looking at a similarly strong start to last year,” shares Dirk Winkelmann, President of Vanguard Direct LLC. The high temperatures in California and forecasted rain is a challenging recipe for the remaining grape crop in this region. Looking across the globe to Chile, they are also seeing weather challenges resulting in a drop in crop size by 10-20 million cartons compared to last season. “All this adds up to strong demand for Peruvian grapes out of the gate, and likely to stay that way well into our season,” added Winkelmann. For the first time in a very long time, the industry will see a flip this year from Chile to Peru as the more dominant global grape player.
Volumes + Timing
Total grape volume for the 2022-2023 season is estimated at 70-72M compared to 65M last year. Customer demand for Greens will be met with increased volume being produced, while Red Globes (red seeded) will be down 10-15%.
First harvest will commence the beginning of November 2022 in Ica.
Changing Customer Needs
“We are seeing retailers and customers, both in the USA as well the UK, contacting us for their supply needs much earlier this season,” says Winkelmann. “Two leading global retailers have already closed their contracts and are not relying on California to take them into late December or early January.”
“You also can’t assume anymore that Asia will always be your premium market. If COVID has taught us anything, it is that to have success, you need to start with relationships first and then execute as flawlessly as possible within the constraints of the various markets. Past performance or expectations can’t be taken for granted.”
Supply Chain + Export Market
Looking at logistics, we are seeing a healthier season this year compared to last year.
“We aren’t seeing shipping costs escalating as higher as we had predicted,” shares Winkelmann. “Don’t get me wrong costs are still definitely going up, but overall (knock on wood) we are predicting a smoother logistics season than we experienced last year.
Port issues are another area seeing some relief. Last year Vanguard avoided the Los Angeles and Long Beach ports completely, pivoting to the East Coast combined with cross-country trucking in pursuit of total shorter transit times despite the significant cost increase. With reductions in port congestion and container release times, the plan is to again utilize the West Coast routes this coming season.
With the supply chain seeing some relief, if there was a new challenge the team is keeping an eye on, it is the state of global affairs. The European markets have several factors looming large – the exchange rate, inflation, the unrest in Ukraine/Russia. Asia also continues to have COVID lockdowns and restrictions that affect demand and consumption. All of this translates into the potential for more ripple effects across multiple markets and the need for flexible plans and rapid responses.
Weather seems to be ideal currently. The region has had a bit of cooler weather recently that could delay the harvest slightly, but with over a month before we start harvest, a lot of things can change.
A Seasoned Team
“We are entering this season with a lot of experience, and with that comes confidence,” shares Winkelmann. “We’ve created a strong and capable team in Peru and they have been instrumental in the growth we have had this past year and to our future development plans. This was not possible two years ago as finding qualified and driven people is always a challenge and takes time, but our team now is formed, mature, and carries an infectious positive electricity. Our global team is connected, excited, and eager for the season ahead.”