by Richard DeAngelis
One of our great frustrations for the past twelve months is finding quality domestic selections in the inexpensive, $10 and under categories. Comparing our sales numbers with the data of several trade journal articles seem to point to the same conclusion; inexpensive wines aren’t selling as well across the country. Upon further review what we found was even more interesting; there seems to be a downward trend on all inexpensive wines, not just chardonnays. US sales statistics* show sales are down on wine priced $10 a bottle and under and the largest category of sales increases is above the $15 per bottle price point. It seems that Americans are drinking better, which helps explain the drop in sales of inexpensive chardonnay.
There are number of factors that are contributing to this phenomenon. The consolidation of large wineries has produced a flood of generic, uninspired grocery store quality wines, like Yellowtail and all the imitators. These wines may be cheap but they offer very little for someone looking for even modest complexity in their glass. Cost of fuel has also caused a dramatic rise in shipping costs, not just for wine but for all the components such as barrels, glass and corks.
These increases impact less expensive wines as every penny counts to hit magic price points. For this reason there are a lot less small wineries interested in turning out inexpensive wines. As consumers have been more willing to spend more, winery owners see they can make less wine, charge more per bottle and net the same amount of income each year. It is also worth noting that the less wine you make the less risk there is to sell all your production without discounting. Finally, there is a lot less “bulk” wine available for producers who bottle inexpensive wines made by someone else but sold off as extra production. As consumers spend more per bottle the wineries that traditionally sold off their poorer quality wines to bulk bottlers are now keeping the wine and selling it themselves.
(*01 19 07, San Francisco Chronicle, AC Nielson ratings)