Wine Talk

Snooth User: Philip James

How the economy affects wine sales

Posted by Philip James, Dec 15, 2008.

http://www.northbaybusinessjournal.com/article/20081215/BUSINESSJOURNAL/812140238/1207/BUSINESSJOURNAL02

This is a pretty comprehensive article and worth the read. Some quotes / themes:

- Consumers have been shifting to buying wine and food in stores for consumption at home, according to The Nielsen Co. In a figure that surprised some market analysts, wine had the fourth-highest amount of volume sales in October, up 7.1 percent from a year ago, according to Nielsen analysis of store scan data.

- One of the fastest-growing wine sales segments now are wines retailing for less than $15 a bottle, particularly less than $7 a bottle.

- On-premise wine sales nationwide so far this year have ebbed 12 percent to 15 percent from where they were last year, according to market information gathered by Gomberg Fredrikson & Associates in Woodside.

Replies

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Reply by Eric Guido, Dec 15, 2008.

Everyone's trying to keep as much of their cash to themselves as possible. I know I've slowed down a bit. I'm also very lucky that I book myself out about two months in advance because I've heard a lot of stories of big clients not coming through this year for holiday parties. I was also just talking to a friend in the retail wine industry who explained that half of the corporate (gift giving) business that they usually receive, this time of year, has disappeared,

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Reply by Rodolphe Boulanger, Dec 16, 2008.

As a retailer, I am still seeing lots of corporate gift giving. There's nothing close to a 50% dropoff

The segment which seems to have dried up for us, is wines over $20 bought by individual consumers.

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Reply by ChipDWood, Dec 16, 2008.

I work wine retail too, & I gotta say that what I've seen- what little that trend may indicate in the bigger picture- is that folks aren't buying the $25 bottle anymore- but are buying two of the $15 bottles instead.

Not a typo.

From what little my own perspective of this season's wine market from the retail perspective may be worth: folks are actively hunting for the higher quality bargain examples now than just clinging to the mondo-production National brands.

The spread of wine-making technology that has forced quality up- especially in newer wine-producing regions (re: Chile, Argentina, South Africa, etc.)- is having an affect on "what's good", and what's being pursued by the customer as well. A wine with the quality of something like the Caro (Rothschild, http://www.snooth.com/wine/caro-2005/ ) in the past would have cost $80 & up. Not so much anymore, and when you consider how other technology has chipped in to broaden the availability of these kinds of wines (refrigeration, shipping efficiency, etc.)- your wine dollar's been not-so-quietly growing like crazy when it comes to the quality and availability of new wines hitting market.

There's more of the "good" to choose from than ever before, at a lower price per bottle, and less of the swill as folks discover that the better end of things is only a couple bucks away.

Not to mention either that higher-end wines are going to become dramatically more affordable come spring, particularly at auction.

Yo dos pesos.

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Reply by scottdseaman, Dec 16, 2008.

We're seeing more people buying from the bargain end, BUT they continue to look the unique and exceptional for as great a value as we can produce from our books.


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