Wine prices in 2015

The 2014 grape harvest in most of the world is finished, which raise the next question: What does harvest mean for wine prices in 2015? The answer is surprisingly complicated, depending on which region the wine is from; how expensive it is — or isn’t; and whether we buy it from a big or small retailer. But if the answer is surprisingly complicated, it’s not unexpected.

That’s because the wine business continues to adjust to the changes it has seen over the past decade, and which were exacerbated during the recession. Most of the predictions you’ll see, now and into next year, don’t take into account these changes. Which is silly. The days when the wine business was made up a handful of important producers in each country who sold to mostly local retailers through small, family-owned distributors are gone and may never return.
I’ve spent the past couple of days contacting people who follow this stuff — consultants, retailers, distributors, and producers, and their answers are consistent, depending on their role in the business. In short, almost everyone wants to raise prices next year, especially after almost 10 years of flat prices. But most won’t be able to do it:

• The wine most of us drink, in the $10 to $15 range, probably won’t cost more next year, though quality might suffer as producers look for less expensive grapes in order to increase margins. Said one distributor: “The well-known brands, especially those in the big chains and grocery, have to be more careful. If you are in the $10 to $15 retail range you can slide around some, but don ?t break $14.99.”

• The cheapest wine, $8 or less, almost certainly won’t cost more next year, and in some cases may be even less expensive. That’s because, as several people told me, there is so much of this wine and so much competition that producers don’t want to raise prices for fear their customers will go elsewhere.

• Expect to see lots of one-off brands and more private labels around $15. That will be a function of plentiful harvests in much of the world, including the third biggest ever in California, and more grapes means more opportunity to do these very profitable wines. Why $15? That’s the price that producers want consumers to trade up to.

• High-end wine will almost certainly increase in price. As one consultant told me: “High-priced wines are cutting back on the discounts and second labels, that they offered in the recession. In addition, their consumer demand can support some price increases, since they sell a higher proportion to high income, wealthier consumers who have recovered much better from the recession.”

• Prices for wine from places like Australia and parts of Italy, which have fallen out of favor with consumers, won’t go up. They’re having enough trouble selling wine now.

• The biggest retailers, like Costco, Total Wine, and the grocery stores, will exert more pressure than ever on prices. Said the consultant: “Terms like ‘synergy’ and ‘economies of scale’ in wholesale and retail are sometimes code words for ‘beating the crap out of your suppliers.’ ” Which means the same wine could cost 10 or 15 percent more at smaller retailers than at the bigger stores next year.