Winebits 243: Wine economics

We seem to have a theme this week, no?

? Consumers want to pay less: And no less than the guy who runs influential importer Frederick Wildman says so. Richard Cacciato told Shanken News Daily that, after the recession, ?[w]e saw a radical change in purchasing patterns almost overnight. ? Labels that were being sold for $75-$80 were repositioned down to $50-$60. For wines retailing at more than $20, we found ways to bring them in under $20. That created a perceived value in these products. ? Cacciato also says the recession forced Wildman, hardly known as an importer of cheap wine, to restructure its business to allow it to focus more on grocery stores and mass market retailers like Costco. If Wildman is doing this, what does it say about the increasing importance of grocery stores in the wine business?

? Why does it cost that much? Tim McNally looks at why a bottle of wine costs what it costs, and discovers that it may not have as much to do with the actual expense as we think. ?Wineries are trapped in pricing given the types of grapes they are working with, and where they are located. A great bottle of Napa Valley Oakville Cabernet Sauvignon may be perfectly acceptable to you in the $75 range, but move just a few miles north to Alexander Valley in Sonoma and that won ?t fly. ? We also hear about Tim ?s brief foray into the banking business, which sounds like it was a lot of fun.

? Bring on the sweet wine: California winemakers who want to sweeten their product can ?t add sugar; it ?s against the law. Instead, they add grape juice, and that mostly comes from the Thompson seedless table grape. And guess what prices for Thompsons are doing as the 2012 harvest begins? Going sky high, reports the Western Farm Press, with prices as much as 23 percent higher than 2011. Some of this is being caused by what looks to be a smaller Thompson crop, but it also points to increased demand as wineries ramp up production of sweet wine.

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