Winebits 288: Wine sales trends edition
• The three-tier system strikes again: How minor a role do on-line sales play in the U.S. wine marketplace? Pretty minor, according to a new French study. One in four Chinese wine sales use the Internet, while as many as one in 10 in Europe are done on-line. In the U.S.? Just two percent, and in one of the more masterly of recent understatements, the study’s author cited “legislative constraints” as the reason. In other words, it’s mostly illegal in this country, thanks to three-tier and the system that has evolved in the U.S. since the end of Prohibition.
• The Federal Reserve and wine sales: This post, from Silicon Valley Bank’s Rob McMillan, explains (in English, too!) what’s going to happen to wine sales now that the Federal Reserve is going to do less to stimulate the economy. The technical term is quantitative easing, and since we’re going to see less of it, McMillan predicts a stronger U.S. dollar and higher lending costs for wineries who want to expand or make acquisitions. The former is good news for the consumer, since it should lower the cost of imports and keep wine cheap. It may also be bad news for high-end producers, who have higher costs of production and need higher prices to stay in business. And that interest rates will go up probably isn’t good news for them, either. This post shows why McMillan is one of the really smart people in the wine business, and he deserves to win the Wine Blogging Award for best industry/business blog next year.
• Beware the hype: Steve McIntosh at Winethropology warns us that many of the lower prices we’re seeing these days have very little do with wine quality and a lot to do with retailers and distributors getting rid of wine that is “occupying precious warehouse space … not all of which is worth your hard-earned money – at any price.” He says he fell for the hype and bought two bottles recently, One of which is nothing more than “a watered down version of wine.”