Tag Archives: wine premiumization

Premiumization follow-up: Wine prices in the real world

wine pricesHas the average price for a bottle of California wine hit almost $18?

One of the difficulties with tracking the effect of premiumization on wine prices is the lack of data. There are Nielsen sales statistics, which I used in yesterday’s premiumization post, but most of the best numbers are proprietary and unavailable for analysis. Hence, this study from a European company that rents RVs – an odd source, certainly, but one with what seems like a solid methodology and interesting results.

The report, the 2016 SHAREaCAMPER Wine Price Index, compares local and imported wine prices from 65 countries in an attempt to give an idea of what the same wine would cost depending where you are. In this, it offers a glimpse at U.S. wine prices and how they compare worldwide based on prices in hundreds of hotel chains, restaurants, and supermarkets. Click here to see a full-sized version of the chart.

In other words, wine prices from places where people buy wine and taking into account restaurant markups. The goal, says study spokesman Pablo Martinez, was to compare apples to apples – the price of the wine you buy at home with the price for the same wine in another country.

And the average U.S. price? Almost $15 a bottle, ranking 35th out of 65 countries in the survey. The cheapest wine in the world? Paraguay, at about $8, while the United Arab Emirates, which is mostly dry and doesn’t have a local wine industry, was last at $39.02 a bottle.

The $15.02 average bottle price is almost twice that given in the Nielsen data in yesterday’s premiumization post; the difference comes from including restaurants and their onerous markup, as wll as the difference in price between local and imported wine. In the U.S., the study found that imported wine costs almost one-third less than California wine – $12.85 vs. $17.61.

The meaning of all this?

• California is focusing more on more expensive wine than ever before, something that we’ve noted many times on the blog. That this study found premiumization when it didn’t go looking for it speaks volumes about what is going on.

• If you want value in the U.S., even at restaurants, your best bet is imported wine. Again, not news to anyone who visits the blog regularly, but it’s something that seems to be common among countries with large domestic wine industries. Imported wine prices in France, for example, are $12.05 a bottle vs. $15.06 for local.

• U.S. per capita consumption, which has stalled and even declined by other measures, is higher in this study than elsewhere, about one bottle a year more than the Wine Institute’s generally accepted figure of about one bottle per person a month. Still, it’s probably not enough to signal a change in per capita consumption trends, and the U.S. still drinks one-fourth as much wine per person as the French.

Four bottles of wine, and nothing to drink

four bottles of winePremiumization and internationalization have made wine more expensive and less enjoyable, as last week’s four bottles of wine and nothing to drink fiasco demonstrates

Have premiumization and internationalization become so common that finding a bottle of wine to drink for dinner is too difficult to bother with? That seems to be the case after last week’s four bottles of wine and nothing to drink fiasco.

I wanted a bottle to have with my version of the muffaletta, the New Orleans olive relish sandwich. I had four wine samples – three reds, none less than $15, and one white, $15, and they were from Italy, southern France, and Washington state. What did I drink with dinner? A $5 bottle of Vino Fuerte from Aldi.

How did this happen? How did I open four bottles of wine from different parts of the world, made with different grapes, and find none of them worth drinking? Call it focus group winemaking, in which each of the wines was made to taste a certain way in an attempt to please the so-called American palate while also meeting the “requirements” for a 90-point wine:

• Lots and lots of sweet fruit, no tannins worth noticing, and barely any acid for the red wines. The white was a bland, gloppy, fruity mess.

• The producers took every bit of terroir out of the Italian wine, a sangiovese from Tuscany.

• The $35 wine, a syrah from Washington state, had none of the power and earthiness it was supposed to have.

• The less said the better about the two French wines from the Languedoc, which were the biggest disappointment. If this is the sort of cynical winemaking the French have in store for us, there’s no reason to buy French wine we’re not familiar with.

So how do we find wine to drink for dinner? Shop at a retailer who recommends wine that you’ll enjoy and not what they think you should drink. Don’t be swayed by scores, cutesy names, or foolish back label adjectives. And, most importantly, trust your palate. If you don’t like something, no matter what the scores or critical acclaim, it’s probably a crappy wine.

Finally, if you’re wondering why I’m not naming these wines, it’s because they don’t even deserve the publicity that goes with this review. The idea that any publicity is good publicity is never more true than in the Internet Age, when Google gives us what we search for without any distinction about quality. And the only quality in these wines is in the producers’ imagination.

The wine premiumization stranglehold gets tighter

wine premiumizationA $28 rose sample arrived the other day, which says pretty much everything that needs to be said about the speed and ferocity of wine premiumization’s takeover of the wine business. The world needs a $28 rose like we need more terrorism, pestilence, and famine, but since the wise guys and their numbers say we want to drink more expensive wine, we’ve got one.

In addition, California grape prices continue to rise, despite what seems like a plentiful supply of grapes. That’s because the best quality grapes, which are used in more expensive wines, aren’t as plentiful, and their prices have increased by as much as 50 percent over the last couple of years. In fact, speakers at a recent trade seminar said that as prices continue to go up, wineries may have to use cheaper and lesser quality grapes to maintain their profit margins. In other words, $15 wine as the new $8 wine.

This embrace of wine premiumization also explains many of the dozens of high-dollar winery acquisitions over the past couple of years. Big Wine’s thinking (and even that at some not so big wine companies) is that it’s more efficient to buy an existing winery, which already has customers and a brand (as well as grapes), than it is to start from scratch. So if you have to overpay, so be it.

In this, quality seems to be the one thing left behind. I wrote in January that the push to premiumization has resulted in some of the worst winemaking I’ve seen since I started the blog, and things have only gotten worse. The $28 rose was not exceptional in any way, and that was one of the least offensive wines I’ve tasted this spring. A four-year-old California pinot noir not only had too much fake oak, but tasted purposely oxidized. I mentioned this decline in quality to a colleague the other day, not nearly as cranky, and he agreed with my assessment, and especially for wine from California and wine that costs as much as $20 a bottle.

That’s the difference between now and the bad old days before the recession, when it seemed like everyone was racing to charge $100 a bottle. Those wines were overpriced, but at least you could drink some of them. Increasingly, more and more premiumized wines are barely fit for the drain in the kitchen sink.

So until things change, hopefully sooner rather than later, we’ll just have to pour and bear it.

More about wine premiumization:
Premiumization: Are wine drinkers really trading up?
Is the U.S. wine boom over?
Wine prices up, wine quality down in 2016?