Why Is the Price of Wine is Dropping Fast?

CNN’s February article headline announced, “The Price of Wine Is Dropping Fast.”  This is good news for us wine drinkers.  So I’m with the line in the CNN article line that says, “Let’s raise our glasses and toast to cheaper wine.”

What’s behind the drop?  There is a surplus of grapes in California, with it getting worse because they had a really big crop in 2018.  That comes together reduced demand.  For 20 years, wine demand in the US has been going up steadily. There was no reason to expect that to change, but it did.  Producers worked to meet that grown demand and their assumption proved wrong.

This is a predicament for wine producers.  You can’t just stop producing wine.  It takes five years from the initial planning that goes into producing a wine until the wine can go to market.  You can only solve this over supply issue by reducing the amount of vineyards producing the wine grapes.  They won’t be able to change that for 2 to 3 years.

So this price break is here to stay for a few years.

What the experts are saying is that Americans are drinking more liquor and ready-to-drink cocktails.  The wine industry hasn’t pulled in millennial consumer and the boomers, who have been driving wines sales for 30 years, aren’t living forever.  One expert quoted in the article says, “…the larger millennial population has not yet embraced wine, which is the wine industry’s largest growth opportunity.”

I was just thinking this price drop works to address this since lower prices can attract these younger buyers.  The mix in our Casual Winers membership is about 50 / 50 between millennial members and those of us over 45 so there is clearly an interest as I see it.  Making consistent buyers out of the millennial wine drinker is a solid strategy to address this sluggish demand and convert this age group into repeat buyers.

We’re here to support the cause.