High End Wine Struggles Create Opportunity for Consumers

By John ~ October 30th, 2009.

The marketing struggle for producers of high-end wines has been well-documented, especially the so-called “dead-zone” of $50+ in California and $30+ in Washington State. What has not been discussed as much is the opportunity that this glut of higher-end wines provides for the wine consumer.

Specials at a local wine shopLet’s face it; wineries will do almost anything before dropping the price on their wines. They’ll keep them in the warehouse hoping for market improvement, hold back new releases until old inventory is cleared, even make special deals with their distributors as long as the retail price is not lowered; because once you’ve dropped a $50 retail price tag down into the $30’s, that brand will probably never have a $50 image again in the marketplace.

Some wineries have the financial capacity to stay firm on price, but many others do not. If cash flow is tight and they need cash to keep their commitments to their growers on the current vintage, they may not have a choice other than to lower their prices to move inventory and generate cash flow. On the other hand, wineries with a “cash cow” value label, their own vineyards, and/or no debt may be able to ride out the downturn.

I’m seeing some incredible savings on really good wines through the major online retailers and through some brick-and-mortar retailers. Some examples:

  1. I tasted a good $60 white wine last week that is now being wholesaled to offer at $25 retail.
  2. I saw a $50 Cab that made a Top 100 list now being offered at $24.99.
  3. I saw a 2006 “Special Selection” Cab, originally $160, now $99 online.

And the list goes on and on. It’ll be interesting to hear about the “post-offs” (specials) from distributors coming out for November.

While some of the higher-end wineries here in Washington State are feeling the pinch, it doesn’t appear that the bleeding is as bad as in California where prices have been traditionally much higher. In fact, a recent report by Wine Opinions, released at the Wine Industry Financial Symposium in Napa, noted that Washington wines are the leading alternative to premium Cabernet Sauvignon from Napa.

While the statistics say that the typical wine consumer is trading down from a $20 bottle of wine to a $15 bottle, or from a $10 bottle to a $7 bottle, I believe that the best deals are going to be in the really good higher-end wines that I could rarely afford before, that I can now snap up for 50 percent off by the case and put away. These are the kinds of wines that can benefit from some cellaring and still be good 10 years from now.

My suggestion is to make a list of some of the wines you’ve dreamed of owning, scan Wine-Searcher.com regularly, or keep in touch with your favorite local retailer and tell him what you are looking for, and be ready to buy when the price is right for your pocketbook. It’s still a buyer’s market, and it may get even better.

Filed under: American Wine, General Wine Information

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