Time was I liked to start the day by reading the sports section. These days it’s the front pages and all the business stories that grab my attention.
Little of the hard news is heartening. But for the wine business there’s a silver lining in the gloom-and-doom scenarios, and it is this: People are not going to stop drinking wine and, in fact, I expect that the domestic market—you and me and many new converts—will drink as much or more wine this year as last. The market will expand. You can’t say that about too many businesses these days. Most are contracting.
What’s clear or unclear for vintners about this kind of crystal-ball gazing is that if it’s true that wine consumption will remain constant if not strong, that doesn’t mean people will be drinking your wines.
Each day I receive emails touting huge price discounts on all kinds of wines. And I’ve looked at some of the Internet auction sites and prices are down there, too, making it one of those rare wine buyer’s markets.
No, the challenge facing producers, including our own American vintners, is holding market share, that is, selling the same amount of wine in 2009 as you did in 2008 and 2007. That won’t be as easy.
Winery brain trusts I’ve talked to in recent days say that they are focusing on reducing inventory. That can mean anything from huge discounts to fire sales to wishful thinking for brands without any market traction.
They also say that the short crop in California in 2008 will be a blessing, since it will take some pressure off sales and inventories, which are running high.
The challenge for vintners is whether to cut prices to ease inventory, or hold on to inventory. Many wines will benefit from another year or two of cellaring. But I’m not sure many businesses have the leeway or cash to ride out the downturn and wait for the tide to turn. But even when it does turn, the other question is how long until, or even if, prices will return to their recent highs.
For vintners, it’s a tough call with potentially devastating implications. Being stuck between a rock and a hard place is never comfortable.
Sandy Fitzgerald — Centennial, CO — January 26, 2009 6:53pm ET
Ted A Hunt — Fort Lauderdale, Fl — January 26, 2009 6:59pm ET
Karl Mark — Geneva, IL. — January 26, 2009 6:59pm ET
John Wilen — Texas — January 26, 2009 7:56pm ET
David Peters — Mission Viejo, CA — January 27, 2009 2:54am ET
Lee R Barczak — Milwaukee — January 27, 2009 8:48am ET
Glenn S Lucash — January 27, 2009 8:51am ET
John Shuey — Carrollton, TX — January 27, 2009 10:17am ET
Louis-ann Gonzalez — Chapel Hill, NC — January 27, 2009 2:00pm ET
Hugh L Sutherland Jr-m — miramar beach, fl — January 27, 2009 2:34pm ET
Jordan Horoschak — Houston, TX — January 27, 2009 2:39pm ET
David Peters — Mission Viejo, CA — January 27, 2009 3:32pm ET
Ted A Hunt — Fort Lauderdale, Fl — January 27, 2009 10:16pm ET
Ashley Potter — LA, — January 28, 2009 7:36pm ET
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