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+--- Thread: Wine Prices to Come Down? (/thread-17482.html)
- MontereyRick - 01-07-2003
Don't know if this article (AP yesterday) was posted or not. Very interesting to say the least and appears to be a good news/bad news scenario for consumers and the wine industry in general.
Calif Wine Industry is slumping. Could mean lower prices for consumers but could also mean many of the smaller boutique type wineries will either close or be swalllowed by larger wineries.
Interesting read. Following is URL to column: http://www.bayarea.com/mld/bayarea/news/breaking_news/4886297.htm
I'd be interested in hearing comments. Also, the whole article is cut and pasted below:
Posted on Mon, Jan. 06, 2003
Calif. wine industry slumping after decade of growth
LOS ANGELES (AP) - After a decade of unprecedented growth, California's wine industry is slumping, threatened by a worldwide wine glut and flat consumption, among other factors, experts said.
``It's 'the perfect storm': a downturn in the economy, the overproduction of grapes and cheap imports,'' said Tom Pillsbury, vice president of estate wine sales with Youngs Market Co., one of the state's largest wine distributors. ``It's a good time to be a consumer. Prices will continue to drop on wines that are better than ever.''
Holiday sales of California wine declined in nearly all categories this season for the first time since the 1991-92 recession, according to A.C. Nielsen's WineScan, which offers reports to the industry. At least three wineries have filed for bankruptcy protection since the fall and grape prices have plummeted as much as 75 percent over the last two years.
Growers are desperate to sell vineyard land, but few people are buying. Meanwhile a series of high-profile mergers has seen weakened wineries swallowed by the competition.
The bad news follows a decade of expansion that featured a 50 percent rise in the number of wineries, vineyard acreage and consumer prices on bottles of wine. Baby boomers who helped grow premium wine sales by as much as 20 percent a year have reached a consumption plateau and younger drinkers don't have the same love affair with wine as their parents, analysts said.
Meanwhile good, cheap wine from Australia, South America and South Africa is filling stores. Overall, wine sales were flat in 2001 and 2002.
The increase in California wineries from 600 to 900 over the past decade was due in part to businessmen and entrepreneurs from the Silicon Valley, Wall Street and elsewhere who abandoned office jobs to establish vineyards and press namesake wines.
But the negative trends hitting the industry are pushing those small wineries out of business, creating an environment that favors winemaking giants. Only well-known brands and well-heeled vintners will survive as independent operators, experts agree.
``We are going to lose scores of wineries to bankruptcy,'' said Joe Ciatti, one of the state's largest bulk wine brokers, calculating that as many as 200 of the state's wineries could go out of business or be bought by a larger competitor.
``The smaller wineries selling fewer than 20,000 cases a year don't have the ability to cut prices and stay profitable,'' said Fred Reno, president of the Henry Wine Group, another major wholesaler. ``The really overpriced wines would have to go from $75 to $35 1/8a bottle 3/8 to make a difference'' in how much wine is sold.
Some growers in the state's agriculture-rich Central Valley are simply giving up and ripping out vines to make way for other crops.
``The price doesn't justify keeping them in the ground,'' said Gary Wilson, a grower near Bakersfield, who plans to pull out 20 percent of his wine acreage.
The picture is bright for one group: consumers, who are paying less for better wine. But for those who appreciate the diverse, hand-crafted labels that have contributed to California's reputation in the world of wines, disappointment may lie ahead.
In the end, many analysts predict, two wine worlds will emerge: higher quality, more consistent mass-market blends and a smaller universe of premium wines from elite growing areas.
``It's the coming homogenization of the wine industry,'' said Kim Stare Wallace, a second-generation winemaker at Dry Creek Vineyard in Sonoma. ``Small wineries will be grabbed up by the big guys.''
- curious - 01-07-2003
am watching the local news, and they said the same thing. That wine prices are going to go down, due to over-production of grapes, and increase of cheaper wines from other countries. Now is a good time to get wines cheap.
To me, this is a negative in many ways, I hate to see small businesses die, and the bigger ones get bigger, as they look to numbers, and not quality.
Can this happen in wine?
As a former employee of a big discount chain store, I saw this happen when the creator of the business died, his family forgot his dream and focused on making money. I left to go back to college, finish my degree and work in a field I enjoy, not just a means to pay the bills.
I think though, that the idea that young kids aren't interested in wine will change. I have heard some talk about trying it out, the attitude that wine is a snob drink is changing. Young adults who don't want to fit the "yuppie" category, yet also not be seen as hicks, are looking for a way to have some class. They are also worrying about alcoholism, so they see drinking a glass of wine as a way satifying both areas.
Word is getting out about the health benefits, and at the same time, they can enjoy a sense of class without acting like they are better than others.
If here in the beer/whiskey guzzling country area I live you can see a wine store, that seems to have the correct set-up, a good selection, and wine-tasting, then I know that the attitude toward wine drinking is changing.
Janette
- Innkeeper - 01-07-2003
What all this means is that the glut continues. And my continuing advice is to pay attention, and act swiftly. By taking this advice, we took advantage of many great deals last year at great prices. If we can do it from Maine, you can do it from anywhere.
- gobigred - 01-08-2003
At 28 I guess I'm not all that young anymore but I think wine is somewhat popular amoung the younger set. The problem I see is that its not really marketed to us. With the exception of a few wineries (e.g. Bonny Doon) no one is trying to get this age group into wine. Look at the commercials, they're all set in Martha's Vineyard and the like and I've never seen one with a person under 35. Not that you want scantily clad kids drinking wine at Daytona Beach, but give us something. Maybe falling prices will help.
- Kcwhippet - 01-08-2003
Wine consumption went up with the baby boomers, but it's their kids who aren't as into wine. At 28, you're far from old (we have some real gray beards here) and it's good to see your interest in wine. My youngest is also 28 and he's recently developed a real interest in wine.
- Menua - 01-08-2003
Being 21 myself, I really don't see a lot of others in my age cohort into wine. Most see spirits and alcohol-containing bevarages as a means of getting a buzz, nothing more. Wine, if they do consider it, is simply a fruity tasting way of getting a buzz (read wine coolers, white zins, etc). Most of those who don't drink to get drunk simply don't drink at all. There are a few in between who pursue wine as a refined, civilized pleasantry.
When I was still in college, the beer-mongers coming home acting like lobotomized baboons on caffeine and hosing the walls with vomit made me desire to set myself apart and be respectable, classy, refined. So one day I decided to start learning about wine, having never drunk before. Went out, bought a copy of Wine for Dummies, and never looked back. I especially enjoy the academic aspect of wine - learning about grape varieties, winemaking regions and methods, etc., - as it is a an enjoyable study to help keep the mind disciplined.
Another issue is price. Just out of college and heading to graduate school, the meager income I pull has to go towards bills, groceries, rent, and savings for grad school. I include wine under groceries, and $12 a week - if that - is about the maximum I and others in my cohort could afford. California wines, being proliferated, are diluted in quality at that price range (I haven't found a decent _full-bodied_ Cab Sauv from Cali in that price range yet). A nice $8 Aussie Shiraz fits the bill a little better, as do some nice Virginia wines (lots of wineries in the greater Charlottesville area and throughout the state).
Note that I'm an odd one in my age group, as I pull my nose out of a book rarely, listen to Petual Clark, watch Any Griffith reruns, and have a "trust noone UNDER thirty" attitude. [img]http://www.wines.com/ubb2/smile.gif[/img]
- leatherman - 01-08-2003
this is true. just found the 98 insignia for $45 and the 98 BV GLT for $24. Will not be long before the Mondavi regular cab is $15.
sorry. just daydreaming.
- Innkeeper - 01-08-2003
Hey I'm 63 and still looking for bargains on my retirement income. If you want to take advantage of the wine glut, two wonderful sources are WineExpo@rarthlink.net and www.southernwines.com Am sure their are other great sources, but both will e-mail you with great offers. These are sometimes buried within other offerings, but if you stay alert, the bargains will blow your mind. Just these two saved me over 1k this past year.
- ShortWiner - 01-09-2003
I'm 26. My friends, many of them somewhat younger than me, love it when I introduce them to new wines. Money is certainly a factor in my buying, but I rather enjoy the hunt for great experiences at prices I can afford . . . and the knowledge that many more of those experiences await me later on. [img]http://www.wines.com/ubb2/biggrin.gif[/img]
- wondersofwine - 01-09-2003
Wondered if Menua from Charlottesville ever gets to Tastings Wine Shop/Wine Bar/Restaurant on Market St. That's a good way to try a variety of wines by the glass. They also have comparative flights of wine. Wines are much cheaper in the shop than on the restaurant menu. You can also buy a bottle in the shop to have with dinner and add a $5.00 corkage fee, but on a limited budget, wine by the glass may be the best option.
- Menua - 01-09-2003
wondersofwine:
I see now where the 'wonders' comes from: that was a wonderful wee bit o' news! Thanks very much for the tidbit! I hadn't realized there was such a wine place in C'ville, aside from the Wine Warehouse on Hydraulic (which is a different critter altogether).
By the glass, cheaper than restaurants? Comparitive flights? I'm falling in love with this. [img]http://www.wines.com/ubb2/smile.gif[/img] As soon as I get a chance I'll take a peek. Thanks again - you just saved me bundles on my wine education! 8)
BTW: I noticed you're from NC, but it sounds like you're familiar with C'ville. Do you get up here much?