Wine sales throughout the United States are slower than maple syrup at a January campsite breakfast, mainly because consumers are extremely tired of drinking high-alcohol wines.
Moreover, alternative beverages that are much lower in alcohol, or even have zero alcohol (such as “mocktails”), have invaded the beverage scene and are taking up permanent residence.
The result is a chaotic situation for retail stores that specialize in fine wine. Supermarket chain stores are offering as deep a discount as they dare, and still sales are sluggish.
Most wine industry analysts that chart these periodic industry downturns know they come along regularly. Wine is, after all, an agricultural product that conforms to the ups and downs most ag products go through.
You'd think this will lead to lower wine prices at retail stores. And you would be right, but with some provisos. First, of course, is the demographic market in which you live. Wine prices in small towns rarely go down immediately; major cities are the best places for discounts.
Also, the downturn is barely a year old, and although prices have come down for some items, premium wine prices are the last to decline. Savvy buyers check internet offerings regularly before making a decision. Sometimes it pays to have the wine shipped to you if the price is low enough to cover shipping costs.
Based on the price of grapes this year, the best value in the coming year will probably be cabernet sauvignon. Napa Valley cabernet grapes that normally sell for $8,000 to $9,000 per ton (which equates to wines that sell for $80 to $90 a bottle) sold in September for $1,000 a ton.
By Oct. 5, several grape growers had agreed to give their fruit to anyone without charge if they paid for the picking of grapes as well as trucking them to a winery! And still, there were no takers!
Since there are costs to produce wine, do not expect to buy $80 wines for $12 anytime soon, but anybody can see from the above numbers that cabernet in the coming two years should be good value—prices will be soft.
However, most discounts will not be seen on high-image wines. The best deals will be in “house brands” developed by fine wine shops. Many will be made by contract wineries from better fruit than has been available for such wines in about 20 years.
The best bets in cabernet, now and soon, may well be wines from Chile and France. They tend to offer good value in wines of nice structure, which typically means alcohol levels below 14 percent. Too many California cabs are a bit too alcoholic for today’s consumer seeking lower alc.
One major retailer told me last week that he normally gets about five offers a week from wineries to produce a quality house brand, white or red. In the last few weeks, he said, “I’m getting about 30 to 40 offers per week.”
Another wine whose prices will be soft is chardonnay, but here the onus is on buyers. Some chards will be quite good, others will be insipid. One good strategy is to buy one bottle, take it home and try it. If it exceeds your expectations, buy more.
Final tip: Watch the vintages. Some older wines from vintages four and five years old are being closed out not because of the glut but because the wine is tired. Try before you buy.
(No Wine of the Week.)
