Cheers to that!
The cost of wine is set to plummet to its lowest price in five years, allowing drinkers to consume more red, white or rosé than they can usually afford.
According to CNN, the trend is partly due to an excess of California grapes — and partly to millennials preferring spirits and ready-to-drink cocktails such as White Claw.
As a result, Rob McMillan, founder of Silicon Valley Bank’s Wine Division and author of the annual State of the Wine Industry report, predicts American wine enthusiasts will enjoy the “best wine retail values in 20 years.”
He says the cheaper prices may last up to three years.
Golden State grapes are now in bountiful supply because thousands of acres of new vines were planted in Northern California in 2016, and vineyard owners in Napa, Calif., and other premium wine-producing regions are using more efficient harvesting methods.
Unsurprisingly, many industry insiders are not happy about the surplus.
Jeff Bitter, president of Allied Grape Growers, said that spare grapes often filter down to the secondary market where they end up in brandy or grape-juice concentrate. But that doesn’t usually turn a healthy profit for producers.
“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,” he says.
Bitter adds that the current slowdown has caught growers by surprise. It takes up to five years to bring wine to market from the initial planning stages of planting a vineyard.
“It makes hitting demand very complicated,” he says. “In this case, we overshot demand. Until 2015, wine shipments had grown, almost predicatively, for two decades.”
Meanwhile, millennials are apparently shunning wine in droves because they prefer liquor and premixed cocktails.
“The industry should rightly be concerned,” McMillan told CNN. “We aren’t engaging with the millennial consumer, and boomers who have driven wine sales for the last 30 years won’t live forever.”
McMillan writes in his report: “Today, the wine supply chain is stuffed.
“This oversupply, coupled with eroding consumer demand, can only lead to discounting of finished wine, bulk wine and grapes. US wine consumers will discover unprecedented retail value in 2020 and should buy up.”
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