The Wine Curmudgeon thought he would follow up his look at what’s going to happen to prices and sales this year with some better numbers, courtesy of Gomberg, Fredrikson & Associates, a California company that tracks sales.
In 2008, its research found that U.S. wine sales increased less than one percent, compared to four percent in 2007. That was the smallest increase this decade. The big winner was regional wine, up 3.4 percent, and the biggest loser was imported wine. It fell nearly 3 percent, thanks to the weak dollar. Said analyst Jon Fredrikson: "Frugality suddenly has become hip as consumers face uncertain economic times."
Actually, as I noted in my two-part series, frugality has been hip for a while. It’s just that the people trying to sell us pricey wine didn’t want to believe it. The more I think about this, the more I’m convinced that the recession will give the wine business a chance to remake itself in a more consumer-friendly direction, focusing on value and quality instead of scores and bloated, overpriced wine.
More on the Gomberg report after the jump:
It said that the multi-nationals that dominate the business, like Gallo, Constellation, and Diageo, and companies that focus on cheap wine, like Bronco, makers of Two Buck Chuck, will continue to do well. The report noted that Gallo had 10 of the top-selling 25 wine brands in the country last year.
Frederikson, who was speaking at a major wine trade show, said grocery store brands are benefiting because more of us are eating at home. We’re buying what we see in the supermarket when we buy the ingredients for dinner. And not only are we not going out to eat as much, but we’re not buying as much wine when we do.
Wines that have built their business on wine lists at exclusive restaurants are in trouble. Wineries selling to high-end restaurants can't expect a quick recovery, and will probably need to find new markets for their wine, such as direct-to-consumers or at retail with deep discounts, Frederikson said: “The (restaurant) business is not going to come back to its glory days for quite some time.”