Wine Consumption Up…and with it…the deals.

If you are a wine drinker, things are looking up for your pocket book according to a number of sources.

First, Americans continue to drink more wine. According to drinks info publisher Adams Beverage Group consumption in 2005 rose 2.1% over the previous year to 273.7 million cases of wine. This upward trend in the volume of wine Americans are drinking has been continuous since 1988. The per capita consumption of wine increased in 2005 to 2.1 gallons, the highest since 1988.

So what are we drinking? Lots of stuff, but it’s imports that are really getting attention from American wine drinkers. Adams reports that consumption of imported wines increased by 5.6%. And get this, YellowTail increased in sales in America by 15% in 2005…an up-tick of roughly 1 million cases.

The folks at Adams Beverage group attribute the continued increase in wine consumption by Americans to a number of factors:

-We are eating out more and ordering wine more as a result
-"Critter" labels are making wine seem more accessible
-The impact of positive health news related to wine has has had a continuing impact
-We are entertaining at home more

This would all seem a rosy scenario for the wine industry in America, but there are problems that, in the end are going to be harmful to members of the industry but make even more friends among consumers.

As Dan Berger pointed out in a fantastic article in last Friday’s San Francisco Chronicle Wine Section, we are in the midst of a new "glut" of wine…specifically red wine. Berger wrote:

Reasons for the glut start with the rapid planting of new red wine grape
acreage in the North Coast American Viticultural Area, which includes vineyards
north of San Francisco, following the shortages of the late 1990s. Almost all
of the new acreage began bearing fruit in 2002 and 2003, producing large
harvests both vintages. Meanwhile, imported wines’ share of the total U.S. wine
market was growing. In 2003, imported wines reached 26 percent of all wine sold
here. By 2005, that figure had hit an all-time high of 30 percent, with more
than 8 million cases of it called Yellow Tail, an instant-success Australian
brand. Americans are drinking more wine per capita and the population is
rising, which absorbs some of the surplus. But still, the supply of wine is
greater than the demand."

What this boils down to is that there is a hell of a lot of bulk wine sitting in tanks across California while the 2006 harvest is making demands on those tanks. This in turn means that many wineries are less willing to buy more grapes from growers this year, which puts some serious downward pressure on growers who have grapes to sell.

All this should mean you’ll be seeing some seriously discounted wines on the shelves.


4 Responses

  1. Terry Hughes - October 2, 2006

    This means an inexhaustible supply of Two Buck Chuck.
    We may sometimes scoff at the stuff, but it’s like Yellowtail in that it prompts more people to get into wine. Not a bad thing, on the whole.

  2. Ryan Scott - October 2, 2006

    I’m always looking for good quality and good buys on wine that’s being boxed, for 1/2 or 1/3 of the bottle price we can get good wine that doesn’t oxidize. Hoping we see more of that.

  3. JohnLopresti - October 4, 2006

    It only takes a few samples of monkeys, loons, bicyclers, floating purple cartoon goddesses on clouds, footprints, funny shaped leaves without petiolar sinuses so they are anything other than our native best zinfandel; then you realize the marketing barrier of $10./bottle we passed in the 1990s now is $20./bottle. One with a monkey on the label I tried turned out to have a sponge foam cork instead of natural cork; dense to opaque color; marginal bouquet. It was made from a good grape, though; or, if the pallate is accurate, a blend of some young good grapes and some fifteen year old defective grapes; produced with offshore competitive labor.
    Recently I have read again some comments by people like Duff Bevill and Richard Thomas, and am encouraged that the bright zesty zins of the 1980s when those vines turn fifty in 2030, will prove the northcoast has a good grape suited to our climate. I think a zin won the red competition at the Sonoma Harvest Fair last week. I hope UC Davis devotes some breeding to improve it, the way the French nurtured the cabernet family in Burgundy.
    On the oxidationless comment, above, the consumer might oxidize less, too, after quaffing some of those wines. I wonder what the additives are to keep it bright on the second day after the cork is removed.

  4. China Law Blog - January 30, 2010

    China: Get Thee To A Winery

    The People’s Daily recently published an article reporting both wine production and wine consumption in China have grown about 10 percent per year over the past decade. China is working hard to expand its importation of vintages from major wine-produci…

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