By John ~ July 23rd, 2010.
Almost all of us have changed our spending habits to some degree during the economic storm of the past few years. The big unknown for all businesses is how we will respond once we feel comfortable about the economy again. Will we race right back after luxury goods of all kinds, including wine, or will the â€œlooking for the good dealâ€ mentality persist? More specifically, will you be resuming or resetting your wine buying habits? Please comment and tell us what you plan to do.
In reading quite a bit on this subject over the past few months as Iâ€™ve thought about which way my family and I will go, I want to share some educated observations on the subject:
- The Nielsen Report, in a June 16 news release, summarized the results of their recent research in the following headline: â€œConsumers Who Trade Down Satisfied with Quality, Likely to Continue to Buy Less Expensive Alcohol Beveragesâ€.
- Lettie Teague, in her July 10 wine article for the Wall Street Journal, said that Chris Camarda, owner and winemaker of Andrew Will [whose wines historically garner rave reviews and top prices] told her that his sales were so slow he was holding back the wines of his latest vintage until those of the previous vintage cleared the shelves. And this year, he said, he is cutting production by 40%. On the other hand, in another part of her article, Teague noted that Ste. Michelle Wine Estates, a huge Washington value wines producer, saw its net revenue jump 26.7% from the previous yearâ€™s first quarter.
- Mike Veseth, The Wine Economist, noted in a recent post that his email inbox has been hopping with famous Napa wineries offering their wines at deeply discounted prices. â€œThe typical deal I am offered is â€˜limited time onlyâ€™ 50% off the retail price plus discounted shipping.â€ As you can imagine, those kinds of offerings even make life tougher for the Chris Camardas of the world. And from what I hear and observe, there are hundreds of other wineries with inventory stacked to the ceiling in California and Washington and other places that have not yet faced the realities of the marketplace.
- â€œStaying in continues to be the new night out,â€ said Danny Brager, vice-president of The Nielsen Company. â€œAs the economy worsened, consumers turned to at-home dining and entertaining, and now that the economy is starting to improve, uncertainty about the extent of the recovery continues to dampen the consumer â€˜rushâ€™ to go out more often.â€
- Jeff Lefevere of the award-winning Good Grape wine blog doesnâ€™t believe that the wine â€œresetâ€ has been long enough or hard enough [at least so far]. As he says in his July 18 post, â€œI fear that a short-term recovery in the economy will bear no fruit in bringing clarity of purpose to the role that wine can play in our lives â€“ there will be no reset on proportion and accessibility.Â I fear that a recovery in the near-term will continue to engender luxury lifestyle as the marketing vehicle for selling something that should be viewed in an entirely different light.â€
As for our family, I believe we definitely fall in the â€œresetâ€ vs. â€œresumeâ€ camp, despite Jeffâ€™s fears about the population at large. We have made some lifestyle changes that I believe will be long lasting. I do not see us rushing back out to upscale restaurants as much as we used to, and especially not to buy $30+ bottles of wine marked up to $100+, no matter how strongly the economy rebounds. We have too much good wine at home that weâ€™ve bought at reasonable prices.
We also cook and eat at home much more than we used to, as you can tell by our Challenging Wine Pairing series, and our reports of other private tastings with dinner at home. These activities have become family favorites and are not likely to change with the economy. Lastly, we simply get more satisfaction out of a â€œgood dealâ€ than a â€œstatusâ€ purchase. Thatâ€™s why we emphasize our QPR [bang for your buck] ratings on wines that we review.
What about you? Will you â€œresumeâ€ or â€œresetâ€ your wine buying habits? Not only would we like to know, but also wineries are desperate to know your answer because it will affect their long-term livelihood.
Filed under: General Wine Information