Larry, it kind of sounds like you’re saying “this time it’s different” because there are, uniquely, substitutes for wine this time around. I don’t find that to be unique, just that the substitutes are different. But “this time” they’re really gonna last!
I hate to be the “invisible hand” guy, but demand decreases (which it has in the wine market at large), market prices go down (for grapes and bulk wine to start and, eventually, wine), supply adjusts (smaller crop in '20 [hopefully], maybe some vineyard owners selling to wineries looking to shore up supply, growers who can moving to alternative crops) or we increase demand, voila, prices recover. Although we don’t like to admit it, on the aggregate, grapes and wine can act like a commodity.
Look at Table 8 of the crush report. There were probably 1,200 tons of District 4 (Napa) Cabernet sold at $2,000 or less per ton. These are “on the spot, I have a gondola attached to my pickup truck and have been held to contract, what will you pay me to drop it off at your winery?” prices. Elastic. These are the people hurt by oversupply. There were also 25ish tons sold at $50,000 per ton. I assure you, these are the inelastic sort and the people buying and selling give two sh!ts about the overall market. Not affected by the oversupply at large.
I was working for Piero Antinori a decade ago. I was lamenting the Great Recession and the effect it was having on sales and grape and wine prices. He looked at me and said “my family’s business has survived the Black Death, many wars among the city-states, the French Revolution, the Bolshevik Revolution, two world wars in western Europe, and the reign of Mussolini. I think we can handle a recession.”
My point being, I’m not saying we bury our head in the sand or that this time, it isn’t different. Businesses need to adapt, tighten their belts, develop new ways of increasing demand and new customers. Shoot, a few wineries in CA thrived 100 years ago while their product was deemed illegal by a constitutional amendment!
But, this does strike me as part of the normal cycle. Barring any unforeseen larger world events.