The wine industry is concerned, and you, dear consumers (speaking in terms of global and holistic statistics) are the reasons.
[The 12 best bargain wines in 2018 only cost $ 9. What are you waiting for?]
We can laugh to the bank (do people keep going to the bank?) While we save money by lowering the price of wine. Our search for value is dividend payments. But our consumption habits, as well as our expenses, provide a good step for the wine industry. In the end, that might not be for our benefit, because our buying habits might have an ironic effect in reducing our choices. And the beauty of wine is partly due to its diversity.
I describe a rather dystopian view of this year's report on the wine market trend published by Silicon Valley Bank. This report is an annual exercise with hand squeezing and observing the navel that evaluates the sales trends of the previous year and tries to project the future. This is a difficult task for industries that, basically, cannot react quickly to adverse trends. But the annual report also offers interesting insights on how we, as consumers, participate in wine, and that, perhaps, changes faster than industry can sustain.
Let's start with prices: "As an industry, we move to a period of flat to negative volume growth, low sales growth and a modest wine surplus, which will put pressure on prices," the report said. On the surface, the reason is basic economics: abundant supply and smoothing demand. The latter comes from demographics and greater competition from craft beer, spirits and newcomers to the report, marijuana.
The boom in wine from the 1980s to the 2000s was driven by baby boomers at large costs, a generation that was increasingly retiring. Gen-X has entered their richest years, but this industry has been salivating for a long time throughout the largest millennial generation. The Millennials are almost all of them drinking, but until now at least they have not become wine drinkers.
"Millennium is not committed to wine as expected." Lack of financial capacity, currently preferring premium liquor and craft beer, and have slowed their careers, "said the report. Legal pots are very popular among younger men," and that also might play a role in the delay wine appreciation. "Negative messages about the effects of alcohol on health also reduce demand among younger drinkers.
It is difficult to say whether certain trends begin with consumer encouragement or producer encouragement, but this year's report is well-known because it often refers to "frugal consumers". Premiumization, the idea that we can buy less but pay more for higher quality, decreases because we become more aware of prices. However, this does not mean that we drink old drinks because of emotions. Wine sales that cost less than $ 9 per bottle "clearly decline," while wines from $ 9 to $ 30 continue to show increases in 2018. But even that growth seems to decline compared to previous years.
Large retail chains expand their private label offerings, increasing their purchasing power to control the supply chain and keep prices low. These are the wines of Costco, Walmart, Target and Trader Joe. This growth put pressure on independent small wine retailers. "Today, you can buy wine and other alcoholic drinks at Bed Bath & Beyond, Starbucks, Burger King, cinemas, dance halls, hairdressers, and laundry," the report said. "You can also receive it from many digital retailers and on the same day."
The different new sales outlets for these wines favor larger distributors who can feed the retail supply chain, creating greater pressure for consolidation in the wholesale sector. And much of that wine will come from larger producers, which will further strengthen seven wineries that produce about 60 percent of all US wine. Act
And it hurts small family wines, which often have trouble putting their wine in shops or on restaurant listings. In recent years, these wineries have relied on direct sales to consumers, which depend on people visiting their tasting rooms and then ordering wine to be delivered home. But visits to the tasting room have declined in the past five years in Napa and Sonoma districts, even when tourism is on the rise. Again, economical consumers have an impact.
"A visit to the wine country is no longer about wine," said the report. "Old consumers come to wine countries, stay at luxury hotels and visit one or two of their favorite wineries instead of the five they visit as young consumers. Younger consumers come to wine country, share Airbnb with others to save costs and visit one or two wineries that offer the lowest tasting room rates and / or best experience, which is a different experience than they are. They are looking for older consumers. "
So, even though we have more choices of places to buy and enjoy wine, we increase the pressure that can affect the variety of wines available to choose from. That's another reason to budget time and money to support independent retailers and small family wineries, even if we occasionally enjoy a glass of chardonnay while shopping at Bed Bath & Beyond.
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