Well you have to know that Rob/SVB defines “premium wine” as anything the above the under-$12 category (this may have increased a tad in this year’s report?). And they get most of their data from off-premise scanner data (ie, larger stores). They do supplement with surveys and other data, but I specifically asked Rob to incorporate VinoShipper sales and trends for example (to pick up small producer/higher end wine trends), and introduced him to the CEO, but to my knowledge this hasn’t happened.
As it relates to most of the wine that folks on this forum would actually enjoy and support, here are some trend analyses that show how higher end wines from Oregon are doing (as an example that I’m sure is relevant to other States). (from a presentation by Danny Brager of Brager Beverage Alcohol Consulting, sponsored by the Oregon Wine Board; his sourcing is “SipSource” – still not sure this captures DTC such as wine clubs very well). At any rate, not as much “doom and gloom” for those of us focused on quality, artisanally-crafted wines. I don’t have many wines under $38 retail, and yes, distribution is tough, but overall with DTC we are doing well.
That price point definition of “premium wine” is, from what I understand, standard within the alcohol beverage industry. What hobbyists think of as “premium”, “ultrapremium”, etc. are very different from how industry analysts segment the market.
And yes, from what I understand, their mix is Nielsen et al. data (which is typical for CPG analysts) and surveys, because these are almost all private companies (and public companies only provide so much detail), so where else are you going to get the data from?. They apparently are very reliant upon the surveys, because they’ve made pleas in the past about participation.
So, my counter is that SVB’s approach is generally consistent with how analysts approach industries/markets. Of course, that’s never going to be totally accurate (and I doubt they’d ever assert that), but it’s nothing unusual is my point.
In the industry, you have to account for jug and box wine. So apparently , anything above that is premium with a few exceptions like 4 buck Chuck, etc.
Wine is not segmented by brand, but price point. There are boxes that can sit in Premium, Super Premium, Ultra Premium, although most sit in Value. Price points are much lower than a consumer would assume by the terminology, so $12+ being Premium to Ultra Premium probably doesn’t jive with WB thoughts on what proce would fit into those segments.
Between Nielsen, IRI, NABCA, and SipSource you can get lots of solid syndicated data. Taking a supplier viewpoint is not syndicated should be discounted as such, which is why we tend not to use IWSR.
I do think that while the market is contracting, it’s not contracting evenly. Smaller producers are faring better than bigger brands, IMO, at least so far. And the contraction is slowing a bit, still contracting but not as quickly.
People are cutting back but I feel they’re more likely to hold onto special wines, or wines that they really resonate with. And if that special wine offers value, it doesn’t have to be cheap, those wines still have a market.
There’s a lot of non-reality in pricing. In 2021 money supply was high, inflation followed and things are more expensive so many people are being thoughtful. Production will be coming down, probably world wide, and in a few years things will probably balance out.
Ha! No, whisky, vodka, and spirits are backing up because they’re more stable than wine. So wine is only backing up into brandy, marc, grappa, and probably whiskey and gin as well…distillation is the parachute, and so much cheaper to store.
The concern is how/ where production slows. I think smaller producers are doing better because of the fact that they are quality oriented, and people remain willing to pay for that quality. Jim Beam pausing for a year, isn’t because they cant sell their premium bottlings, but because they can’t keep the sales rate up of the mass produced stuff.
The thing that concerns me is that distributors are tightening up, and for them it’s harder to sell lesser known varieties, and regions. I am already seeing some really high quality wines fall out of distribution in NY. Some have been more reluctant to make special orders for me too. We have had a surge in recent times towards this diversity, and I worry the tariffs may reverse some of that progress, making the wine industry more homogeneous, and less attractive to those who can’t afford 1st growths. The consequences of something like this, at least as I see it, is decades long.
Not totally true. They are backing up as demand is lagging production and inventory constraints across all tiers are exacerbating that. Retailers (both off and on) going to 7-13 days or JIT inventory is causing a DOH back log at distributors looking to get to 30-40 days which is causing a backlog at go betweens like MHW/WC or the supplier directly.
There is nothing in that % of net sales about it being bottled inventory, its mosty barrelled or tanked with a % of bottled/palletized. If its bottled.it has the same cost pressures as wine.
As I said above most consumers don’t understand that spirits sit in tank/barrel awaiting bottling….wine sits on pallets causing interest, holding cost, and other pressures to the owner ultimately meaning some reduction in price or liquidation measure as a reduction measure and last resort.
I wonder how much wine was turned into hand sanitizer back in 20-21 and if it was enough to moderate stocks and encourage more production for some larger companies, or smaller.
Please expound on this, from my POV this is purely speculation on your part with no backing in anything tangible from a distributors leadership or with data, so would like to hear more of where this comes from.
Your comment is insulting, and impolite. Of course there is speculation involved, but Below is as much information as I feel comfortable giving. You are welcome to whatever opinion you want.
I would rather not name the names of distributors. I don’t imagine they would want that. 2 distributors have just told me they were cutting back on certain products, and tightening up their inventory. I do not know their finances, to understand why. None of the products I am aware that they are dropping are fast moving products of course. One of the distributors gave me a list of discounted items coming up in Feb that they are cutting altogether.
I still can’t fully get a grapple on why, for at least one that happened yesterday, because the product in question for me is low production, and I buy it regularly. Seemed like it would be easy to just order in small quantities. They are still carrying wine from the winery, in fact, I carry other wine from them, but no longer this particular wine. I am being told I can special order it in the future, and instead of the 2 case (6pks) price of $35per bottle its $46 net.
Another distributor carries the wines of a great winery in Campania, but they won’t be taking in a higher end version of a wine I buy, unless I commit to 20 cases (12pks). It is a white wine from Campania that would be $60ish. I don’t have the capacity to move that volume, so the wine won’t be in NY.
I have been trying to pick up a few Pignolo, but 2 distributors that have good ones, won’t be carrying them. To be fair, the reps didn’t even know the wines, though they carry wines from the wineries.
Another distributor that special ordered 2 Sicilian wines for me in early 2025, said they wouldn’t special order them again. They still buy wines form the winery. One of those was an extremely rare grape in Sicily.
I’m not directly involved in the tri-state wholesale situation much these days, but anecdotally I’m hearing a lot of what he’s hearing. Cut backs are starting.
Also seeing (not just hearing) that a lot of the big wholesalers are using things at their disposal (like glassware) to wrestle away a ton of business from the smaller guys. With expenses what they are at restaurants these days, free glassware in exchange for BTG and featured liquors in house cocktails is something the restaurant owners are happy to do.
So sorry, I was making a joke about wine not backing because you just distill a bunch when it starts to back up in inventory. Gallows humor but also not completely untrue.
The queation about wine being made into hand sanitizer is a good one. Even in a smaller region like the WV that was happening.
It wasn’t meant to be insulting or impolite in any way, just a direct question to your post. If it was taken as such I apologize.
Seeing you reference these are Italian imports and from regions like Campania or Sicily makes much more sense and provides much better context than the wider all encompassing statement prior.
I think tariffs are an easier way to explain reducing sku count as a distributor than just saying its a slow mover in NY, it may not be for you Joseph and we apologize for that, but our larger business needs necessitate we cut items that don’t move in under 35 days for domestic and 90 days for imports. Every distributor has a long tail of skus and most have a list of aged inventory that needs to be moved. It should be a good time for you to load up on some wines as most disco lists will be import heavy.
The special order is likely a DI vs. Domestic issue as I wouldn’t be willing to special order wines in small quantities DI, but certainly would domestically if they are Stateside.
Appreciated. The first one is actually a French wine too, but the rest of the wines were Italian.
It is alarming to me because these are wines that help sustain diversity and excitement. With escalating prices, it is hard to get more people ‘hooked’ on wine. The average person could once splurge on a first growth and become hooked for life. Even 10 years ago, Brunello was a gateway, but today even those prices are a bit too much for most. These lesser known grapes and regions can still do some of that, and I worry that if it is lost, we can expect even less people to get into wine over time.
I think it’s simply a reset/revision and not a paradigm shift.
The financial pressure on interest rates/lending base and holding costs has to be addressed before expanding again and sku count and DOH are core to addressing this.
This isn’t just the distributor, this starts with the importer. If the importer doesn’t believe in skus to carry the skus Stateside, hard to justify why distributor would DI them.
