Wine Market Fatigue and the Tsunami Wave is coming Ashore

[Adam_Frisch]

The first thing anyone says who’s not from the US when you drop them at the wine store is: “why is your wine so expensive?”. It’s a good question. We in the ITB then tend to launch into a defense of why that’s justified, but the question is at its core very legitimate. Why, exactly?

Look how much CA wine gets exported compared to other New World countries - we trail behind both Australia and Chile, despite them being about a 10th of the population and having much fewer producers. CA wines are simply not very competitive on the world stage.

Some price self-regulation, or at least some less indulgence, would do CA and US wine some good long term.

[Jason_T]

Speaking solely as a consumer, I remember buying ‘cult’ Calif cabs in the early - late 90s because they were reasonably cheaper vs Bordeaux (say 2nd growth stuff). Then Calif exploded their pricing in the mid '00s and the equation went the other way, with CA Cults demanding pricing over 2nd growths. Why buy new production $200 - $500 Calif Cult wines when you can buy quality right bank Bordeaux from great producers with some real age on it in auction for less than $150 and at times less than $100?

Completely agree.

[Jeff_M1]

Speaking solely as a consumer, I remember buying ‘cult’ Calif cabs in the early - late 90s because they were reasonably cheaper vs Bordeaux (say 2nd growth stuff). Then Calif exploded their pricing in the mid '00s and the equation went the other way, with CA Cults demanding pricing over 2nd growths. Why buy new production $200 - $500 Calif Cult wines when you can buy quality right bank Bordeaux from great producers with some real age on it in auction for less than $150 and at times less than $100?

Agree, except the fear of provenance for auction bottles.

[Marc_Hauser]

I predict nothing will change and this Board will be having the same conversation making the same predictions 18 months from now.

[Ian_Dorin]

I predict nothing will change and this Board will be having the same conversation making the same predictions 18 months from now.

I largely agree with you! We may see one or two moments, but to your point, nothing that is going to raise the ocean temperature to bathwater status.

[Joe_B]

I predict nothing will change and this Board will be having the same conversation making the same predictions 18 months from now.

I largely agree with you! We may see one of two moments, but to your point, nothing that is going to raise the ocean temperature to bathwater status.

Well, it may be that as of today much of Europe’s wine jumped 25%. I bet California might be in the mood now to compete at this new level by increasing their prices by 23.56% give or take.

[Ian_Dorin]

Well, it may be that as of today much of Europe’s wine jumped 25%. I bet California might be in the mood now to compete at this new level by increasing their prices by 23.56% give or take.

The 18th, and hopefully not. But if true, the market for California wine right now is very soft at auction, and barometer for buyers of California wine, and what they are willing to pay.

[Mike_Grammer]

I cut back on buying by about 40%, and that flooded the market.

that gave me a laugh! Thanks David.

Had the same take from a wine broker friend, market has been soft this year, even in periods where purchasing expected.