If you love wine—great wine or weeknight wine— things are looking good. Good, and great, wine is becoming more widely available—and often cheaper. On the other hand, if you own a winery, maybe it’s not such a great time.
Let’s look at some of the factors that point to these conclusions.
2018 was a “Goldilocks” year in prime Western grape growing regions. Both yield and quality were high in Napa, Sonoma and other regions. However, tanks were already full, since last year was a big year, too. There was so much wine available, in fact, that some large wineries claimed questionable “smoke taint” to reject what were perfectly good grapes from areas like Mendocino and Lake Counties. The horrible Camp Fire had a huge impact on people, but didn’t affect most grapes because of the timing of growth and distance from the fires.
Meanwhile, growers have been pulling acreage from unsuitable places, planting more suitable varieties and learning to grow bigger grape crops that are higher quality. So, we have plenty of good wine, and that tends to depress prices.
On top of that, wine consumption has leveled off. Members of our generation are cutting back (and some of us aren’t around anymore, for that matter), younger drinkers are generally drinking less than their predecessors, and they’re as likely to order cocktails or craft beer as wine.
People who can are buying better wine, too. The most popular wines are now $8 to $15, not the lower amounts earlier (even though quality wine in boxes depresses the average). Meanwhile, hopeful people keep starting wineries all over the country, and they’re making better and better wine.
Also, the barriers to wider distribution are falling, and now most people can buy wine from wineries (not retailers) and have it shipped to their houses. Other restrictions on sales are also falling like Sunday blue laws and bans on out-of-state owners, while more and more states allow convenience stores, drug stores and groceries to sell wine, and big retailers just keep getting bigger, notably Total Wine and Costco.
But all is not good. For one thing, two distributors now provide 54 percent of all the wine sold in stores and restaurants. Likewise, the biggest wine companies are grabbing more and more of the market. It may be with better wine than they once made, but it tends to be uniform—great if you just want a glass with dinner, but not so rewarding for wine devotees.
The other side of the picture is obvious: More supply from more wineries means there’s less business for the smaller guys.
In the area I live in, Napa County, which is legitimately regarded as America’s top wine region, new wineries keep starting, as people who made fortunes in other businesses want to enjoy the wine-country lifestyle. But even they have to sell their wine. For most, sales to stores and restaurants across the country are very tough. They have to lure people to their tasting rooms, sell them some wine, and sign them up for wine club shipments and events. Some wineries resort to telephone sales, most use email and conventional mailers, but the much-anticipated Internet sales are tiny, most from existing fans.
So, it’s a great time for wine lovers but not so great for wineries, especially smaller and newer ones. If you want to favor them over the giants, prove it with your dollars—and your visits.
Paul Franson lives in Napa Valley, CA.