Grapes go unsold

grapeman · Aug 21, 2009

I'm not saying you are destroying the market, just helping to feed the negativity going on at present. The market will correct itself all on it's own. What we don't need is the media wanting the next great story, feeding panic and panemonium.

I can tell you personally after stories like the posts listed, that some new winery startups that aren't even permitted yet have their eyes on cheap grapes. What they don't get is that they will need to deal with the results of their desire for cheap grapes later. If you buy crap, you will get crap to have to sell later. No self respecting vineyard grower will spend a lot of extra time caring for the crop and thinning for best results only to take a much reduced price for the product. If I know I am going to get one third my normal price, I will expand my crop harvest with reduced thinning/culling to end up with a bit more money. The result is less quality. When prices are higher for a higher value crop, the grower can expend a greater amount and reduce crop to improve quality.

I'm not pretending to be a great economist because I am certainly not, but I will say that usually you get what you pay for. You also reap what you sow.

nhdennis · Aug 21, 2009

appleman,

agreed as to the quality. The grapes from Rockpile, Diamond Mountain, etc will still command a good price and still be sought after.

Some growers will change to another crop. But this happens all the time normally. How many growers ripped out producing Merlot, Syrah, and Zinfandel vines to plant Pinot Noir to get the biggest dollars.

Consumers will buy more expensive wines again, one day. However, we in the sales and distribution side of the industry are not betting that the $600 bottles of Cristal Rose are going to recover for several years.

There will always be buyers for every tier & price point. It just depends on how many are in each & what they are buying.

Growers that have continious quality will continue to be on top of the pile.

Bartman · Aug 21, 2009

With only a few exceptions, it is true for all industries that there will always be a market for high quality products at a reasonable (if higher than average) price (The only exceptions I can think of are for products that have been superseded or are out of date (like phonographs and VCRs)). Obviously, wine is not "going out of style," so there will always be a market for quality wines, even in the worst of economic times. The current question is what damage has the last several years' over-expansion of vineyards done to the wine market/industry - consumers can't tell by looking at a bottle of California cab or merlot if the grapes are the higher quality ones like you referred to in the last sentence of your post, or if they are the crap that appleman referred to. If you are the average Joe Consumer, and you tried a handful of the crappy wines over a 2-3 month period, you would get the general opinion that all California wines are crappy, because the quality wines are now in the minority.

What and how much damage has the California wine market suffered due to that aggressive expansion? I think it has taken a significant hit (apart from how negatively the media describes the wine industry) that will take years to overcome as to the casual, middle-aged wine drinker - the folks "in the know" and younger people who are not yet wine drinkers may not feel that way in 10 years, but others will remember, if only vaguely. The main benefit that I see coming from California's shooting itself in the foot, is that other parts of the country will get more attention because "if those bozos in California think they know what they are doing, just wait till they taste the stuff we produce here in Texas (or Virginia, or New Hampshire, or New Mexico, etc.)."

Bart

Dean · Aug 21, 2009

BartReeder said:
What and how much damage has the California wine market suffered due to that aggressive expansion? I think it has taken a significant hit (apart from how negatively the media describes the wine industry) that will take years to overcome as to the casual, middle-aged wine drinker - the folks "in the know" and younger people who are not yet wine drinkers may not feel that way in 10 years, but others will remember, if only vaguely. The main benefit that I see coming from California's shooting itself in the foot, is that other parts of the country will get more attention because "if those bozos in California think they know what they are doing, just wait till they taste the stuff we produce here in Texas (or Virginia, or New Hampshire, or New Mexico, etc.)."Bart

That my friend is going to be a looooooooong battle! Oregon, Washington, and British Columbia have been in a 30 year battle to get their AVAs properly recognized and regarded as good wine producing regions throughout the wine industry and the world. It's hard to be noticed when the 1000lb Gorilla is in the cage with you. When I hear about US based wines, California is my first thought, followed by Washinton, then Oregon, and finally New York. No other regions are well known enough. However there are many states capable of producing great wine, it's just doesn't have world renown, nor a fully recognized region of exceptional wines.

I think this is just a proper price correction as quite a few of the wines were getting far too expensive for what they were worth. The wine industry as a whole is still facing masssive expansion as wine is back in vogue with the next generation, so should see at least 50 years of good growth. Prices just need to be set in reality again. The age of easy money and massive greed is coming to an end for a while.

grapeman · Aug 21, 2009

This is a few years outdated, but it shows the relative rankings and amount of wine produced in the US. Positions move up and down a bit, but the numbers are huge. And Tepe thinks he makes a lot of wine

.

Bottoms up!

http://www.wineamerica.org/newsroom/wine%20data%20center/Production%20of%20Wine%207-05%20to%206-06.pdf