Now that we’re most likely looking at a pretty serious downturn in the economy and confidence of markets, here’s a question I’v always been curious about: I’ve heard mixed points, that wine sales are relatively unencumbered by the economic climate - and from others the very opposite. So for those ITB that have been around the block a few times during upturns and downturns:
What is your experience? Do recessions hugely impact wine sales?
I’ve been in the middle of this in the restaurant industry, which is a good parallel.
Who are your customers? At the high end, some won’t feel a loss and won’t change behavior. Others will feel it and step downward on the price they’ll pay, but aren’t retreating from quality. Alcohol consumption can actually go up during a recession, but that’s at the low end.
During the tech crash, my and a close friend’s restaurants were both of the sort that delivered quality for the price and had a very high percentage of regular customers. We saw some customers dining less often, but others came more often, because they were stepping back from more frivolous dining, but still wanted the pleasure and comfort.
Retailers and restaurants are always looking for quality wines at a reasonable price. Customer demand at the lower price points could easily increase in a crunch, for wines that have quality and interest. Think someone who hadn’t blinked at spending $65 a bottle suddenly looking for wines up to $35 that’ll deliver for them. Expect them to be more discriminating than they had been, where they won’t be happy taking any step down in quality.
Quality wines that are worth the price will mostly be fine. Wines that have been getting away with asking more than they’re really worth will mostly suffer.
I’ve been wondering this about myself, also what can we do about it to drive sales? We’re doing a webinar with a few folks from across the industry: Brandborg, Prime Solum, author of Luxury Wine Marketing, and more. Free/open to all. We hope it’s valuable!