Six things to know about wine value 2018
Wine value 2018 has become perilously close to an oxymoron – a contradiction in terms with little real meaning. Even the Australians, who are famous in most of the world for their cheap exports, are lamenting premiumization and the disappearance of value.
Why this is happening has been well documented, here and elsewhere. Whether it will continue is a point of much contention. The wine business is betting its future that premiumization is here to stay, and that consumers will happily pay $20 for wine that used to cost $10. Others, meanwhile, who are looking at data instead of wishfully thinking, see a wine world with an unsustainable pricing model.
Know the following six things about wine value 2018, where value is defined as wine that is well-made and fairly priced and usually costing less than $15:
• Yes, value still exists – in Spain, parts of Italy, and some of southern France. Many of these wines are still made to reflect terroir and treat their grapes accordingly. Use the category menu to the lower right to search for wines from these countries.
• It’s almost impossible to find value in U.S. wine for $15 or less, save for a brave few brands that are almost single-handedly holding out (and even they have occasionally wavered).
• Producer consolidation, which I once thought would keep prices in line, hasn’t. We’re this much closer to an oligopoly pricing model, where a handful of large companies decide what to charge and everyone else is happy to follow along. Remember, three out of five bottles on the grocery store Great Wall of Wine likely come from just three mega-wineries.
• Pricing is starting to devolve into three tiers. First, cheap and poorly made wine, costing $12 or less, marked by cute labels and gushy winespeak. Second, gimmick wine, often red blends with manly names that are sweet but are passed off as dry, costing from $12 to $18. Third, “collector wine” at $20 and more, labeled as better than anything else and priced that way – even if neither is true.
• Most of the Winestream Media don’t care about any of this, and so don’t write about it. Instead, we get point scores – all remarkably in the high 80s or low 90s – for what seems to be every wine, regardless of quality or price.
• Producers will intensify their focus on premiumization next year, which means two things: First, new, higher-priced brands, and two, price increases for established brands. There has been much more of the former than the latter since the end of the recession, and it could mark as sea change in the wine business if producers can make price increases stick.