Tag Archives: wine prices

Update: Wine prices and the recession

The weather has finally cooled off in Dallas, and one local sales guy asked me if that would help business. "Everyone's mood has improved, right? So they'll spend more money on wine?" Because, he said, it looked like he was going to need all the help he could get going into the holiday season.

The wine business has been eagerly awaiting the end of the recession, and almost every news story that has come out over the past nine months has been forecasting a return to the good old days, when the price of wine didn't seem to matter to consumers. The reports have been heralding every quarter-to-quarter increase in sales as soon as it has been reported, and you could almost hear the sigh of relief from retailers, distributors and producers.

But that enthusiasm seems to have been wishful thinking (and it has been even worse in Texas, oddly enough, since we've supposedly handled the recession better than elsewhere). More, after the jump:

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Winebits 193: Successful wineries, wine prices, cheap wine

? What makes a winery successful? It's not the quality of the wine, says a survey of winery owners. Instead, it's five factors that have more to do with controlling costs than anything else, according to a study done by two professors at Sonoma State University ?s Wine Business Institute. Winery owners are more concerned with things like selling wine directly to consumers and developing a strong business strategy. The first is especially interesting, since direct shipment is such a small part of the wine business — as little as one percent. And the lack of concern about quality? And the industry wonders why it's in such trouble.

? State stores mean higher prices: A Michigan think tank has found that liquor prices are higher in Michigan and in the 17 other states where government acts as a statewide liquor wholesaler — the so-called control states. The Mackinac Center report estimates that residents of those 18 states pay 6.3 percent more for booze than the rest of us. The language in the news release gets a little hysterical, and I'm not sure the methodology is as good as it could be, but the point is well taken. When there is no competition, prices are higher — and you get wine kiosks.

? Does cheap wine cause recessions? Australian newspaper columnist John Birmingham asks "whether the problem with the economy isn ?t structural or political but simply attitudinal. We ?ve talked ourselves into a funk. We ?re buying cheap wine, holding our dollars tight, because we ?ve convinced ourselves that ?s what we need to do." A couple of caveats: Birmingham is talking about the Aussie economy, which doesn't compare exactly to our faux-recession in the U.S., and lot of this is written with tongue firmly in cheek (and in Australian, which makes it difficult to decipher in several places). But his approach made me smile. Who knew that those of us who like quality and value had such a significant impact on the economy?

Winebits 185: Bordeaux prices, direct shipping, Chinese wine

? French government weighs in: The controversy over skyrocketing prices for red Bordeaux increased this week when the French foreign minister said prices for the wines "are actually great value." The Bordeaux pricing mess has turned into great theater, especially since that's how most of us — who can't afford the thousands of dollars a bottle that the best wines command — get to enjoy Bordeaux these days. Can you imagine Hillary Clinton, the U.S. secretary of state, weighing in on Napa Valley cabernet sauvignon prices? But, to paraphrase F. Scott Fitzgerald, the French are different from you and me.

? HR 1161 update: Ignore the headline on the story that this links to, because it's not especially accurate. Instead, know that HR 1161, the direct shipping bill that everyone in the wine business loves to hate, is as dead as always. The bill has no sponsor in the U.S. Senate, which means that the Senate can't consider the bill. Which means it won't become law, and which means that those of you who buy wine directly from the winery in the 38 states that allow it will be able to continue to do so.

? China becomes leading producer: The Chinese wine industry makes more wine than the Australian industry does, which is just one more bad piece of news for the Aussie in a decade of what seems to be unrelenting bad news. The article, which is actually a video transcript, offers some interesting insights into the battle for market share between Chinese producers and the rest of the wine world.

Winebits 184: Wine writing, cava, wine prices

? Certifying wine writers: Slate's Mike Steinberger weighs in on this winter's cyber-controversy about credentialing wine writers at the end of a longish piece about the value of earning the Master of Wine title. Says Steinberger, who does a better job than most of writing about the bits of the wine business that have nothing to do with tasting wine: "However, wine appreciation is an almost wholly subjective endeavor, and while some palates are more discerning than others, even the most experienced and knowledgeable critic is merely offering an informed opinion." Given Steinberger's stature, I guess I'm safe for a while longer from the certification police.

? Spanish bubbly sales rising: Which is not a surprise to anyone who has tasted the wines. Sales of Champagne in the U.S. are down more than 20 percent from 2007, according to Impact Databank. Know what has made up the difference? Cava, of course. Sales for the three biggest Spanish sparklers are up 12 percent since 2007, pretty impressive given the recession. In fact, says Impact, more cava is now sold in the U.S. than Champagne.

? Too expensive for Parker? An odd report from the French news agency AFP, in which it quotes Robert Parker, the most important person in the wine business, as saying Bordeaux wine prices are too high. Which would be like the Wine Curmudgeon saying $10 wine prices are too low and should be higher. Parker is the main reason no one, save the world's wealthiest people, can afford top-end Bordeauxs. In fact, if that's not bizarre enough, Parker says the top producers should cut their prices 10 to 20 percent, and should not rely on the Chinese market to boost sales. It was enough to make me reach for a bottle of cava.

Expensive wine, better wine and wine writing

Buried at the bottom of post on a Wired science blog, which recaps research on the expensive wine/better wine issue, is this:

If the only story we can tell about wine is its price, then our pleasure will always be linked to cost, even though this link doesn ?t exist in most taste tests. A much better (and more cost-effective) idea is to find some other narrative, to focus on aspects of wine that don ?t require a big expense account. Knowledge is free.

Which is a damning indictment of wine criticism — and by science writer and Rhodes Scholar Jonah Lehrer, no less. He writes that it's accepted scientific fact, based on robust research, that expensive wine isn't better wine just because it costs more.

Then Lehrer asks the question that no one in the wine business wants to ask, let alone answer: If there is no correlation between wine price and quality, why does wine writing insist there is? Why doesn't wine criticism deal with what Lehrer calls the subjectivity of taste: "We ?ve somehow turned the most romantic of drinks into a commodity worthy of Consumer Reports."

Regular visitors here know how the Wine Curmudgeon feels about that. What's interesting about Lehrer's post is the perspective he brings, which is to understand that there is more than "wine" going on when we drink wine, and he touches on neuroscience, psychology and even philosophy. What happens, he writes, is that "if we think a wine is cheap, it will taste cheap."

All of which, of course, is something that those of us who write about wine rarely take into account. Even I'm guilty of this sometimes. Championing cheap wine just because it's cheap is its own form of snobbery, and just as insidious as any other form of snobbery. What's better, says Lehrer (and what I hope I do more often than not), is criticism based on education. "We should realize that we can make our wines much more delicious, if only we take the time to learn about them," he writes.

Which seems so obvious, and yet is so rarely done.

Shocking news: We’re buying less expensive wine

This just in from the Los Angeles Times: People are spending less money on a bottle of wine!

Patrick J. Comiskey, a big deal in the Winestream Media (he’s a former sommelier and writes for Wine & Spirits magazine) reports in the Times that consumers aren’t spending $40 for a bottle of wine anymore. They aren’t even spending $25. They’re — wait for it — spending $15.

Writes Comiskey: “For many, $15 to $20 might be the new $25.”

Sigh. More, after the jump.

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Restaurant wine sales in 2010

There are a lot of interesting numbers to parse in Wine & Spirits magazine's 22nd annual restaurant wine poll, which covers 2010.

The restaurants surveyed reported that wine sales have increased after a two-year slump, and that consumers seem to be buying more expensive wines than they did in the past couple of years.

But it doesn't look like the old, "let's spend crazy money on wine" ways have returned, says Wine & Spirits editor and publisher Joshua Greene: "… [W]hether buying low end or high, most diners were looking to get the most out of their wine-buying dollars: They weren't spending on trophy labels. Sommeliers describe a savvier wine-buying public as we come out of the recession."

This is significant, because the poll tracked wine sales using the Zagat guide's most popular restaurants in the country. These restaurants, given Zagat's methodology, attract more affluent and upscale consumers who eat out more often than the rest of us and spend more money when they do. So if they have embraced the New Normal, imagine how little the rest of us are spending.

Also significant: The average price for the most popular wines in these restaurants was $62 — about what it has been for the past five years. Which is a damned odd statistic, given the sales slump during the recession, and I'm not quite sure what it means (besides that restaurant wine is overpriced). Most likely, according to what respondents said about their wine pricing, it means that restaurants didn't cut prices during the recession, which kept the average price up even as sales declined. Why they didn't cut prices is a question for another day.

The complete survey is in the magazine, which requires a subscription. But there are more highlights after the jump:

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