"Consumer-friendly" wine prices

I've been digging around for the last couple of months, trying to get a sense of where wine prices are headed in 2011. My gut feeling is that we're in for at least another year of oversupply and lower prices, with lots and lots of previous vintages still clogging winery back rooms and distributor warehouses. The recession may have officially ended, but the wine business is far from recovering.

And that seems to fit with the anecdotal evidence I've seen -- news stories, talking to retailers and distributors, and walking around grocery and liquor stores and comparing prices. I saw Perrier Jouet, a $40 bottle of Champagne, going for $25 in an ordinary, national chain grocery store. Three years ago, the producer would have refused to allow its wine near the store, let alone be sold there or discounted.

The best description of where we're going? It came from a Dallas retailer whose family has been selling wine for about as long as it has been legal to sell wine in Dallas. "I call it consumer-friendly," he said. "Pricing will be beneficial to the consumer. There's still a lot of wine out there, and there are still a lot of deals to be found. I'm buying them whenever I can."

So, for at least another year, $10 is still the new normal.

Comments

[Kyle]

Yet, Bordeaux and Burgundy are selling for record prices! It is a very disfunctional market. Many brands/regions (see Australia) are slashing prices while others are laughing all the way to the bank.

[brian burns]

I like the new normal.
The French remind me of the bank robber who, when asked why he robbed banks, "because that's where the money is" The Asian market is where it is happening with the French Wines, and frankly, if I had a big collection of Vintage French, I would be selling them at about this time. I don't believe they will give me too much for my meager collection of $10 wines.

[Jeff Siegel]

The Bordeaux and Burgundy bubble has very little to do with the real world. It involves relatively few wines that the majority of the world drinks.

You are spot on about the collapse in Australia, and even New Zealand is starting to suffer. One key, I think, is to look at regions like Australia, which invested heavily to meet growing demand. Now, without growing demand, they can't afford the nut on their investment.

[Jeff Siegel]

Actually, given the number of fake high-end wines flooding the Asian market, your $10 wines may be worth more than some of the swill being sold there.

[Nate]

Jeff, where in Dallas did you find Perrier Jouet for $25? Along the lines of the note in today's post about gifting wine that looks expensive...Perrier Jouet would certainly qualify, albeit not necessarily inexpensive at $25. (If you'd rather not post the name of the store, maybe you could e-mail it to me?)

Thanks!
Nate

[Jeff Siegel]

It was either Kroger or Tom Thumb. I can't find my notes (which I write on the back of my grocery list and I have apparently thrown out the grocery list).

[Nate]

Thanks Jeff!