Wine prices up, wine quality down in 2016?

wine prices
“$12? Didn’t that wine cost $10 last year?”

Don’t expect good news for wine prices or wine quality in 2016, and it’s more than my curmudgeonly cynicism saying so. The wine industry’s best price forecaster expects price increases next year, while a wine blogger who has been spot on about decreasing quality over the last couple of years sees more of the same.

Wine prices, says Rob McMillan of Silicon Valley Bank, will go up slightly next year, citing what looks to be a reduced harvest in California over the past three blockbusters, low gasoline prices, and producer optimism that they can raise prices. In addition, says McMillan, the numbers so far this year suggest that prices have been increasing, even though overall sales have been modest.

Interestingly, he doesn’t use the word premiumization to describe what’s going on, given that McMillan was one of the first people to identify the trend, that U.S. wine drinkers are trading up to more expensive wine. In fact, he seems almost surprised that prices will go up, given that “the the world’s economies are still struggling and our own [economy] isn’t setting any record.”

McMillan doesn’t define slightly, but my guess is that we’ll see as much as a dollar or so on a $15 bottle of wine, not that it will be that obvious. Those $9.99 wines will go up to $10.99, but there will various discounts, like case and club membership, to soften the blow. Plus, we’ll see even more new wines in the $12 to $15 category, as producers entice wine drinkers to spend a couple of bucks more for the same kind of wine they bought before.

As to quality, let me quote my pal Steve McIntosh at Winethropology. “The wine world is going to hell in a handbasket,” he emailed me, citing this post, in which he details (and it’s excruciating) how California winemakers are bastardizing wines that cost as much as $20 so they taste the way a focus group thinks they should taste.

In this, his post dovetails with what I’ve tasted over the past year, as producers focus on manipulation to push wines in the focus group direction and paying less attention to grape quality and varietal character in the process. This has been the case not just for wines from California, but from France, Spain, and Italy. A distributor friend, who has been in the business for 20 years, said he has seen wine quality go backwards, toward where it was in the late 1980s and early 1990s. In fact, so many wines have been so poorly made that I’m thinking about posting negative reviews, something I never thought would be necessary. But these wines are so dishonest that someone needs to call them on it.

I expect a wine to taste like wine, and not what Steve calls cough syrup. But apparently that’s too much to hope for these days.

7 thoughts on “Wine prices up, wine quality down in 2016?

  • By James Gunter -

    That might be the case for left coast. But there is a whole world out there with low land costs, low debt and a good vintage in the tanks.

    The $ is looking great, there are other places for people to spend their $

    • By Wine Curmudgeon -

      I want you to be correct, James. But I have had too many $15 and $18 European wines over the past year that were an embarrassment to the great wine heritage of Europe.

  • By Pamela Haylock -

    I just bought 3 bottles of wine at my local grocery store in Kerrville, TX: 2 Llano Estacado and 1 Kim Crawford. All three were nearly $1 higher than the last time (just maybe 2 weeks ago) that I purchased the same wines. So – looks like we don’t have to wait till 2016 to see wine prices go up.

  • By Khris -

    I’m actually hoping for a slight price decrease here in TN next year, when grocery stores start selling wine. The competition should be good for pricing. But, if you’re correct about the quality, maybe I won’t want to buy what the grocery stores are selling! Still, I’ll take a dollar off my McManis cab and Columbia Crest merlot and be thankful.

    • By Wine Curmudgeon -

      That might work out, especially in the short run as grocery stores try to build market share. But be on the lookout for confusing grocery store pricing.

  • By Rob McMillan -

    As you know, people buy on value and there are values at all price points.

    Looking at supply, there is a lot of juice in bulk markets and that means cheap wine is available from multiple countries. At the same time, brands in distribution are expanding case volume.

    It’s not easy to expand a wine’s volume sales without sacrificing uniqueness. A vineyard designate doesn’t taste the same as a North Coast appellation sourced wine. That’s where the rub lies: The big are getting bigger and the consumer is trading up allowing for large producers to flourish in higher price points.

    We’ll probably see exactly what you suggest: a buck or so increase. Will quality in the below $20 category meet that increase to maintain value?

    • By Wine Curmudgeon -

      Very true about value at all prices, Rob. The catch is that not enough producers think that way.

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