The late wine author Leon Adams once said that in a best-of-all-worlds situation, dry wine should be as cheap as milk.
We may be reaching a point where that’s true. The overwhelming volume of wine in the United States today has kept prices for much of it very fair. The evidence is everywhere.
Three of the last four wine-grape crops in California were huge. The 2019 harvest was so large that about 10 percent of the grapes grown were never harvested! There were no buyers.
Wineries report they have more wine in inventory than at any time in their history.
Young millennials, who had been expected to buy a lot of wine in 2019 and 2020, seem more smitten with alternative beverages, from craft beer to ciders, hard lemonade to upscale whiskies, flavored hard seltzers to super-premium tequila.
The COVID-19 pandemic, which forced a shutdown of most restaurants and bars, devastated on-premise wine sales, creating large unsold inventories of older vintages.
Meanwhile, two of the nation’s most popular wine brands are continuing to grow in the under-$7 price niche.
The famed Charles Shaw wines at the Trader Joe’s grocery chain in many states has spawned a number of other ultra-bargain wines, including a decent dry wine, at prices we haven’t seen in years. The Charles Shaw brand (“Two-Buck Chuck”) had been selling for $2.49 a bottle, but the chain recently dropped its price back to its original $1.99.
And E. & J. Gallo’s line of excellent Barefoot wines (most sell for about $7!) doubled in sales in the last six years to nearly 19 million cases!
This has put downward pressure on all wines priced in the $10-and-under brackets. Wine consumers, hard-hit economically by the pandemic, are now happy to trade down.
Fred Franzia, president of Bronco Wine Co., the man who developed the idea of the $2 wine bottle for Trader Joe’s, has long believed, as did Adams, that a bottle of wine should be on every table in America.
Moreover, the deep-discount Grocery Outlet chain, with 350 locations in six states, now carries more overstocked and private label wines than it ever has. Every bottle is sold at a huge discount.
As if that weren’t enough evidence, a significant trade dispute between Australia and China has led to China instituting tariffs on Aussie wines. That created a glut of Australian wine, some of which now is headed for the United States and England at discounted prices.
Additionally, many of the nation’s retail wine shops have so much inventory that they have reduced their costs for shipping wine direct to consumers. Many consumers can have their wines delivered for the equivalent of $1 to $2 per bottle, which easily covers the discount they get by ordering online.
In order to compete, many large grocery chains are increasing discounts for six-bottle purchases.
All this has led many wineries to reduce their shipping costs for direct-to-consumer sales, in many cases waiving shipping costs completely. One large Sonoma County winery even hired two additional web designers to retool their websites and then added additional employees to handle increased direct-to-consumer sales.
Buying good-quality wine today for a lot less than $10 a bottle has never been easier.
