And I Thought We Had a Wine Glut

I realize the quote below from a Shanken newsletter leaves some open questions (is the shortage in just one or two “hot” grape varieties, is Napa short but other areas over supplied, etc). But last I knew, I thought we were almost swimming in wine, much of which was getting sold at big discounts or bulked out. And in the few instances where shortages occurred, it was more due to bad weather impacting yield not inadequate plantings. Hmmmmm…

California could be facing a vine shortage, reports Wine Spectator. Grapegrowers throughout the state are rushing to plant new vines to keep up with increasing wine consumption trends, but major vine nurseries have been caught unprepared for the dramatic increase in demand in recent months. Major Central Valley and Central Coast grapegrowers began placing large vine orders last summer and fall. According to Sunridge Nurseries (one of the state’s biggest vine nurseries), one major winemaker asked for 1.2 million vines in August. Meanwhile, growers are predicting that a shortage could result in higher wine prices. “At least insofar as the Napa Valley is concerned, we’ve already seen rising prices due to short vintages in 2010 and 2011,” Michael Honig, owner of Honig Vineyard and Winery in Rutherford, told Wine Spectator. “We’re not likely to see changes due to the vine shortage for another two or three years, but the basic laws of supply and demand apply. Prices will go up.”

The big news in Europe last week was that Spain’s exports FINALLY made it to a long term goal of getting € 1 per LITER on average. There’s plenty of wine…

I’m itb on the retail side, so maybe this is nothing less than smoke and mirrors by wholesalers, but I’ve clearly already started to experience price increases (and drying supply) from wholesalers on wines from Napa/Sonoma at the lower end (sub $10-12). The quantity and number of SKU’s just isn’t what it was 2+ years ago…

Sonoma Co. has had various shortages over the past few years mostly do to wacky weather. SB, Chard, Cab, and Zin all seem to have been hit.

This chart shows tonnage for 2010 vs 2011 Sonomawinegrape.org

That along with the news about California shipping and exports at an all-time high… it sounds like supply-and-demand will catch up with the (relatively) cheap wine market.