Wine Prices Dropping?
Let’s raise our glasses and toast to cheaper wine!
“The price of wine is expected to drop to its lowest levels in five years thanks, in part, to a surplus of California grapes. Combined with a decreased demand for wine, drinkers can expect to get better value for every drop they drink this year. The cheaper prices may even last up to three years. Rob McMillan, founder of Silicon Valley Bank’s Wine Division and author of the annual State of the Wine Industry report, predicts US wine consumers will enjoy the “best wine retail values in 20 years.”
Having the option of more grapes to make wine sounds like it’s a good plan, but if there isn’t enough demand to support the increased production, then the surplus of grapes goes to waste. “Jeff Bitter, president of Allied Grape Growers, told CNN that it’s possible for surplus grapes to make it to the secondary market, where they’re used for brandy or as grape concentrate. But that market doesn’t typically provide sustainable returns for growers.”
“The main cause of oversupply today is the culmination of a few years of slowing wine shipment growth, with an ample 2018 wine grape crop as an exclamation point,” Bitter said. “Until 2015, wine shipments had grown, almost predictively, for two decades. The slowdown in growth has caught the industry by surprise.