If you’re a $15-a-bottle wine buyer, 2014 should be a fruitful year, with more choice and better quality wine. But if you like buying limited-production high-end wines, beware: prices might leap this year, as wineries seize on signs of a stable economy. These are two of the key prognostications from this year’s annual State of the Wine Industry
Firstly, consumers at the lower-end of the price range, can expect to get more bang for their buck. The 2012 and 2013 harvests produced bountiful crops of high quality grapes in California, which accounts for approximately 90 percent of U.S. wine production.
“The really good news for the consumer is there’s going to be some nice one-off deals, some juice that gets put into $15 bottles that might have been intended for $30 bottles,” said Silicon Valley Bank vice president Rob McMillan in a web conference to mark the launch of the report.
McMillan called 2013 a “good but not great” year for wine sales. Americans consumed more wine than ever before in 2013 but the year-on-year sales growth was driven by lower-priced wines. McMillan explained that slow economic growth and the real U.S. employment figure, which remained stagnant despite drops in the unemployment index, were factors in price-conscious wine-buying decisions. Looking ahead, high supply levels will keep prices low: bulk wine prices have fallen significantly in the last year while U.S. wineries report that there are stockpiles of lower-and mid-priced wines that need to be sold. At the other end of the scale, wines priced over $40 – and especially over $69 – are in short supply, according to a survey of U.S. wineries. That could lead to some dramatic price increases in the super-premium sector. Nevertheless, Silicon Valley Bank predicts 6 to 10 percent growth in fine wine sales in 2014.
“This is the first time in four years that we’ve predicted the [fine wine] growth rate picking up,” McMillan said.
Rarity value will clearly play a part. “It’s easy to move a wine at $250 a bottle if you have 50 cases,” McMillan claimed. “There are a lot of 1000-case businesses that can push prices really high.”
Meanwhile when it comes to buying wineries and vineyards, acquisitions expert Mario Zepponi predicted that the 2013 vineyard-buying spree led by Jackson Family Estates and Gallo Family Vineyards would continue, as large wine companies believe the time is right