Wine Conflicted

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All is not well in Wine Land. At the national level, consumption is statistically flat. Little or no sales growth. Prices are on the ascension, most not reverting to lower levels noted when the costs went up even when the market was assured the price increase would be temporary.

Young people are not replacing their elders in the consumption department. In fact, as a percentage, Millennials, young adults between the ages of 21 and 37, seem to have made a no-alcohol decision in living their lives. Not sure what the replacement item is, but as for alcohol, it seems to be a non-starter in many situations.

As proof, markets are also not that robust with other alcohol-related products such as beer and spirits, whether of the much-hyped craft style or not.

There are interesting cross-dynamics at play in these categories. One of the ways a winemaker can overcome some of the effects of a slow sales situation is to cut back on the amount of product being made. Less supply meeting same demand.

We are seeing in all wine-producing countries vineyards being ripped out and the land being sold off to other purposes, such as housing. Land used for vineyards is usually visually attractive and can also serve as the idyllic setting for homes, both single dwelling and multiple-family units.

Another way in which wineries can support the static or diminishing bottom line is to turn product faster. While wine does have a time requirement in the manufacturing process, if the time it takes to make a quality product can be shortened, then cash flow comes quicker, is more robust and an economic crisis is averted or at least minimized.

A new machine process from Italy is just coming to the U.S. This machine slices the grapes which exposes more of the skins, the key component of a grape that gives wine its character, to maceration. In this way, the time it takes for a grape to give up its essential winemaking aspects, such as tannins, is shortened. Grapes do not need to be crushed, which can “muddy” the flavors and aromas, but rather are kept more in pieces, yielding more structured end results in a shorter period of time.

As consumers we may soon see the results of this process when vintages hit the retail shelves sooner, and the wines are not necessarily requiring maturing time nor long storage commitments after consumer purchase. All of which encourages the consumer to make more frequent purchases to replenish their inventory.

Given these “new” conditions of the wine and spirits industry, consumers could reasonably expect costs at the cash register to decrease. No such luck. Costs are rising, maybe not crazily but increases in price are the norm.

As a consumer, you have the option to buy or not to buy at the price point noted by the retailer or restaurateur. If you are smart consumer, you will always be in a research mode, finding brands and labels similar to those you know you like, with no compromise in quality, but at a lower price.

You have the power of the marketplace on your side. Maybe buying a wine that should cost $14 yet selling for $21 is fine with you. That’s a good thing for your situation. Still, it does not hurt to shop around, don’t compromise your tastes, and maybe finding something that fits you very well while saving a few dollars. Eventually, possibly, your original favorite will bring their pricing more in line with your tastes and budget. Maybe.

Along the way, you may discover many wines, beers and spirits that satisfy your palate just as well as the original label. And think of the fun you will have on your voyage of discovery.

 

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Read Happy Hour here on myneworleans.com on Wednesdays, and listen to The Dine, Wine and Spirits Show, hosted by Tim, every weekday, 4:00 – 5:00 p.m. on WGSO 990AM and streamed, as well as stored (podcast), at www.wgso.com. Also, check out Last Call, Tim’s photo-feature about cocktails every month in New Orleans Magazine.

 

Categories: Happy Hour, Wine + Spirits

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