Growers

Question 1

What are growers?

Answer 1

-only grow grapes, then sell to wm/merchant
-choose not to produce own wine

Question 2

What type of producers are growers attractive to, and why?

Answer 2

-owners of small vys- can’t justify cost of buying/hiring expensive equipment for winery
-don’t want to have to market and sell their wine
-better cashflow- payment due when grapes are sold, rather than when wine made or sold

Question 3

Growers can focus on producing best possible grapes= v high quality fruit. Give an example of a producer that does this

Answer 3

-Andy Beckenstoffer and Beckenstoffer vys- grow cab sav on prime sites in Napa Valley

Question 4

What are the disadvantages of growers?

Answer 4

-risk from vintage variation and fluctuation in supply and demand= signif affect price can achieve for grapes
-bad year= less/no fruit to sell (although shortage can push prices up of healthy fruit)
-when supply exceeds demand, (due to bumper vintage/too much competition) growers have to reduce their prices and may not be able to sell all their grapes

Question 5

What are the 2 ways growers can sell their grapes?

Answer 5

1. Contract with producer/merchant
2. Spot Market

Question 6

What are the advantages of growers using contracts with producers/merchants?

Answer 6

-gives grower certainty can sell their grapes at a given price

Question 7

What are the disadvantages of growers using contracts with producers/merchants?

Answer 7

-if don’t meet quality/specification (min potential alcohol)= rejected/lower price payable

Question 8

What is Spot Marketing and what are the advantages and disads for growers?

Answer 8

-grapes not subject to contract, bought and sold follwing harvest
-higher risk but higher reward
-if shortage of grapes, spot sellers= higher price for their grapes than if under contract
-but if glut of grapes= less than contract price