Yet, if you look at auction prices, they have become steady, savvy investments.
I wouldn’t say that my business is a barometer for global wine retail sales (we are only sell premium wine, and our traditional floor starts around $100 a bottle), but I can tell you that in talking with friends who run more conventional retail shops (brick and mortar plus online), business is very slow right now.
We had a roaring start to the year (up 25%), but April was a bloodbath. I think we just kind of caught up to what was really going on. It also doesn’t help that April was tax month. We saw a much larger than normal number of sellers surface in March than I have in the past. Could be tied together, but I don’t pry into people’s personal affairs, but from April 15th through the end of the month, we did about a quarter of what we should have done.
I would also say there is probably a lack of interest based on the current vintages on the market. 2021 Burgundy and Bordeaux aren’t getting many excited whether by price or quality. 2020 Barolo seems to be a dud. I think Brunello is totally oversaturated (despite what is being heavily marketed as a great year) The Rhone doesn’t seem to drive the market like it once did. 2021 Napa prices shot way up, and I think folks are not happy about that. Put that all together, and do we think that collectors are paying much attention to the market right now? My guess is not really.
We are selling a huge amount of 2023 Bordeaux, so maybe that will help. I think 2022 Burgundy will also be a huge boost. 2021 Barolo is going to be exciting next year. I think this combination will help revive some interest in wine. How much remains to be seen.
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You mean Super Tuscans?
Here in the US, at least in markets like NY, DC and SF, I get the impression that they are mostly steakhouse wines (that’s somewhat hyperbolic). I could imagine restaurants partly driving the auction market.
These days there is far more Barolo and Barbaresco on the retails shelves than Brunello or Super Tuscans in the places I frequent.
Yes, Super Tuscans.
Prices have gone up a healthy amount in the last 2 years. Auction is supporting the increases.
Another thing is of course the great restaurant death. Here in SoCal it has been huge amounts of restaurants going out of business, not sure how it’s been elsewhere. Steakhouses probably more resilient, though.
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Yeah, I sent several cases of tig and other super Tuscans to auction and they did quite well.
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Yeah, there have been discussions regarding this and the greater state of the union. I’ll let Todd jump in here because there were lots of ideas.
Interesting. The wine market is so segmented.
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Adam,
Simply put:
No.
I would say about half of that.
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And the market segment I’m passion about is under significant duress. Those, like you, doing it right. Small, focused on quality, love the process, etc.
The small guys are extremely vulnerable. COVID, fires, restaurants, changes in preference, combined are the perfect storm.
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Wine for Total US MULO was down about 6% in Q1 2024.
I think a lot more DP is sold in restaurants and nightclubs than the fine wine shops where wine collectors shop. Restaurants, expense accounts, night club tables, etc are all affected by the broader economy.
As I stated in the other thread mentioned, it’s tough out there. Period. So many wines flooding the marketplace, not only domestically but internationally, and oftentimes at discounted prices. No ‘complaints’ as this is how it’s always been - just more challenging to deal with.
Just putting my head down and trying to work harder - doing more winemaker dinners and more tastings outside the tasting room than ever. It’s tough as a single proprietor without brokers or distributors, but that’s the path I’ve chosen and I’m doing my best to stay above water.
Cheers
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@John_Morris This is my thought, exactly. Wine is not a single market. And it’s not even two or three. It’s dozens, or maybe hundreds. Every country has its own dynamic/economic variance from the global mean. Segment by price point. Segment by region. (e.g. Santa Barbara County vs. the Willamette Valley). The buying market (i.e. retail) is mostly made up of a bunch of very small players, so small that they each can have their business moved up or down by just a few customers. Uovo/Domaine Cellar Trading may have had a terrible April, but other retailers in the US I’m sure had very different experiences.
My buying is down 60% year over year. Not because of macro economics, or my personal finances, but just because my cellar is literally full and I’m trying to have some discipline. Do I affect any of the retailers I buy from, or am I still just noise? No clue.
The debate here about inflation and how bad it is affecting people reflects the national situation here in the US. Macro says that inflation is under control and that the economy is doing pretty well. But many many people feel like the economy is a mess, inflation is crazy, and they personally are struggling. Both can be true.
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Exactly.
Especially when the media amplifies the negative aspects of the current economy every single day. It even makes people who are doing well feel like they are not.
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My “vibe” is that since screaming eagle has a wait list that proves the wine industry is doing just fine that’s my feeling- is that also true? It’s my truth.
I’ve seen SO many man on the street interviews where certain segments say ‘yea economy is really bad’ then when asked “so it’s really affected you? You and your family are struggling?” Answer ‘oh no we’re doing great hell everyone I know is doing great…but yea economy bad’
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One component of inflation that has not been mentioned is cost of insurance. At least in Louisiana, it’s having a crippling effect.
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This is me. I’m down 39.3% compared to the first 4 months of last year. I anticipate settling in around 20-25% down. But since my peak in 2021 (probably like a lot of people) I was down 27.5% in 2023 from 2022 and down 22.4% in 2022 from 2021. From 2023 compared to 2021 I am down 43.8%. My net spend in 2023 was back at 2018 levels.
Some of mine is that allocations became smaller or I passed on them due to price or both (passed on Dujac, Coche, Raveneau, Lignier, Clavelier allocations this year, for example). Like many others, I have too much wine. I’ve offloaded some to auction and may send some more soon. This is more personal, but I want to get back to the joy of discovery more and building depth of favorites less. Also, my FIL wants to start divesting his cellar so that throws a wrench into my dowsizing efforts.
So @R_Frankel, I have no idea if what I’m doing personally affects the market but in aggregate, I think we might. I do know that the expensive Burgs I passed on found happy homes elsewhere and most of them from newer establishments that have not received allocations of these wines before. When they can’t sell them (or maybe they can) I wonder what’s next.
I have many personal friends in the industry and really feel for their struggle.
What insurance? If it’s related to coverage for weather issues blame human-caused climate change, as well as greedy insurance companies.
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