Smaller CA grape harvest (STZ)
The California Agricultural Statistics Service (CASS) said 3.4M tons of winegrapes were crushed in 2020, down 13% compared to 2019. 2020 is the smallest grape crop since 2011. Red wine varieties decreased 15.9%, while white varieties decreased 9.8%. The average price of all varieties was $674.72, down 16.8%. The average price for red was down 22.4%, while white was down 5.9%. Napa County grape average prices decreased 20.7% to $4,577.62 per ton, while Sonoma and Marin Counties decreased 23% to $2,417.48. Usually, lower grape volumes lead to higher prices, but that is not the case this time. Napa County was one of the hardest hit by fires in 2020. Napa County’s wine crush decreased 38.5%. Central Valley, which was largely unscathed from the fires, saw a 10-15% decrease in wine crush.
Constellation Brands kept a portion of its bulk wine inventory instead of selling it along with its sub <$10 per bottle wine brands to make up for the fewer grapes. The company also recorded a $26.5M loss with the write-down of grapes with smoke taint last quarter. Vintage Wine Estates has said it did not have a significant impact from the fires and smoke taint.
Food technology delivery funding (DASH)
GrubMarket, a San Franciso-based food technology company, raised $90M in a Series D funding round earlier this month. GrubMarket is a farm-to-table food delivery service and produces distributor. GrubMarket created a producer-centric B2B platform and has a SAAS offering called WholesaleWare. The company plans to expand to major cities beyond its current operations in California, New York, Washington, Texas, Michigan, and Massachusetts. The company is targeting revenue of $1B within the next 12 months. GrubMarket said the round was significantly oversubscribed, taking the investment capital from $30 to $90M, but wanted to raise less than $100M. The company is a produce supplier to restaurants and retailers, including many of the largest grocers. GrubMarket confirmed it intends to go public but did not put a timetable on it. There have also been several acquisitions in the food technology sector.
TX freeze impact on agriculture (PPC)
The extent of the damage to Texas agriculture will not be known for weeks. The freezing temperatures will impact citrus and cold-season vegetables, including leafy greens, onions, and watermelons. The Texas freeze is expected to reduce harvestable produce from the state for 4-6 weeks. Even produce grown in greenhouses was lost unless it was heated. Texas has the largest number of cattle on feedlots, the fifth largest dairy herd, and is the sixth-largest chicken producer. The freezing temperatures will lead to smaller weights and fewer animals.
