As Mark Twain once wrote, “Prediction is difficult—particularly when it involves the future.” After reading many recently published studies of the wine market analyzing the 2023 trends in great detail and predicting the future, I felt that Twain's comment seemed relevant. Two trends that seem clearly related are that nationwide wine sales are slowing down, leading to an oversupply of wine, and that Gen Z has different interests than previous generations, with wine not near the top of the list.
This has the look of a so-called vicious cycle. Whether it can me broken over the long term, with the wine trade enjoying profitability even as young people become more inclined toward wine consumption, remains to be seen. However, in what follows, I’ll show that it is already true that high prices need not pose a barrier to young consumers—or those of any age—who think wine is not for them because good wine is just prohibitively expensive.
Returning to an assessment of where things stand now, one report regarding the USA wine market concluded with this prediction: “Since in general, supply exceeds demand, both in retail and wholesale. It is therefore easy to imagine that to dispose of stocks, both trade and distribution will use discounts and flash sales more and more--especially online--in 2024."
A more recent study with this headline “Reversions to Norm in DTC” and published in Wine Business Daily News caught my attention.
Here are the key points in that report about direct-to-consumer sales:
“Since 2021, shipment value and volume of wines priced less than $50 have mostly declined while the opposite is true of wines priced more than $50. Growth is even more dramatic among the highest-priced wines with those priced between $150 and $199 increasing 14% by value and 15% by volume over 2022. Since 2021, the shipment volume of wines with an average bottle price of more than $200 has grown at an annual average rate of 8%.”
As for less expensive wines, the report concluded: “Over the same period, shipment volume of wines priced less than $15 has shrunk from 1.8 million cases to 1.2 million cases. This price tier accounted for 21% of total channel volume in 2021, and that shrank to 17% in 2023.”
An earlier report from the Silicon Valley Bank made a point that, “Wholesalers are full up, as far as they can go,” which is making them “more picky” in what they buy from wine producers. Wholesalers “are more afraid of being stuck with inventory that they may have to discount.”
It concluded with a prediction that “flash sales and increased discounts” are likely in the offing in the near future.”
A few days earlier The Wall Street Journal’s wine article focused on wines by the glass and suggested (predicted?) that $25 for a glass is the new normal for top-of-the-line vino.
My initial reaction was that maybe news articles about the average price of a Napa wine soaring to $108 a bottle which appeared in Forbes and many other places along with $25 for a glass of wine has something to do with Gen Z’s lack of enthusiasm for wine.
But I’d rather leave the marketing analysis and forecasts to others and return to that $25 a glass reference point. Those who shop can find many good to excellent wines for $25 or under per bottle.
And to confess, I shop for possible great values both online and at every retail outlet.
In supermarkets, my eyes naturally go to the bottom rows where the least expensive wines are usually located. Otherwise, I look for the special “sale” tags before the bottles. And discounted wines? You bet I’m interested. But I’ve learned not to announce the price to friends before a tasting because, sadly, too many people have it firmly etched in their minds that price directly relates to quality. You know, the more expensive it is, the better it must be, right? And inexpensive wine is dismissed as “cheap plonk” or just the cheap stuff.
But now it's time to return to the predictions mentioned earlier about big discounts, flash sales, and the role of online retailers. Over the last several years, I’ve been closely following the major online wine sellers and most work the price/quality story to serve their interests. Even wines severely discounted are pitched as cult wine candidates. As they chat up a wine, the folks at Vivino often say things like “this $50 bottle of wine tastes like a $100 bottle.” Really?
But over the last year the online guys, including Vivino, are sourcing better quality wines to offer at deeply discounted prices. Last Bottle Wines (an online purveyor) just concluded a marathon with many “steals and deals below $26”
And other sites such as wineaccess.com, WTSO (short for, Wines ‘Till Sold Out), and winespies.com have also taken advantage of the current market to up their game with better wines and deals. Funny thing is the sudden availability of many Napa Cabernets that have a suggested retail of over $100 being offered at 50% off, sometimes 60%. So far in 2024, the offerings include many private labels and relatively new and unknown names and wineries. On the recent morning when I wrote this, winespies.com offered the 2020 Tela Napa Cabernet, originally priced at $95, for $37. That’s just an example; it may be great. You just need to take your chances.
However, there is one website that in many ways comes across as more like a personal wine shopper with an eye on value. It is reversewinesnob.com run by Jon Thorsen. I’ve watched his website steadily improve in its wines offered. There are three special deals a week, but the pace is a slow version of a flash sale. Most wines are offered in 3 or 4 bottle packs with a reasonable flat-rate shipping charge.
Before getting into specifics, here’s his basic pitch:
“Reverse Wine Snob® where wine doesn't have to be expensive to be good! We've been thumbing our nose at overpriced wine since 2011. Want to join us on this journey? Sign up for our 5 Day Free Guide where you'll learn:
- How to not be intimidated by wine
- Why price has little to do with quality
- How to shop the big retailers
If syrupy, sugary sweet Moscato with an ice cube is your thing, go to town. Likewise if it is vintage Châteauneuf-du-Pape.”
He works hard to find wines that can be offered below $25 a bottle, and he has a system now worked out to deal directly with many wineries. From our recent conversations, he stresses the fact that he prefers authentic wines, not just a label from a large corporation. He is well-aware of private labels since he reviews wines from Costco and Trader Joe’s on a regular basis. While unusual for a retailer to even acknowledge these major outlets, Thorsen has compiled lists of the best wines from each.
Then he has strong opinions about the 100-point scoring system. To him, “the traditional 100-point wine rating scale is useless for most consumers. Why? Because it does not even attempt to consider a wine's price!” So, he has worked out a system that gives equal emphasis to the price of a bottle. Here he explains:
“At its heart, our rating system is fairly simple and admittedly a bit subjective. It's simple by design. With a background in analytics, my first inclination is to design an extremely complex formula, analogous to, say, the convoluted QB rating in football that no one can understand. Instead, I decided it's best to keep a wine rating system as basic as possible. All wines are rated on two factors: Taste and Cost. From there I came up with an algorithm that combines both of these into one overall rating.”
Basically, he rates wines by giving equal weight to quality and price. Except that quality is best at a 10 and price is inversely rated. So, he continues: “To score really high, a wine must be both inexpensive and good. The more expensive the wine gets, the harder it is to attain a high score unless the taste rating is off the charts, which is the way it should be, right? We’re trying to maximize our dollars here!” For more details and actual charts, you can use this URL: https://www.reversewinesnob.com/p/rating-system.html
Does it work for him and lead to great value wines? What first sparked my interest were some Oregon wines that were my favorites. Over the last few years, he has offered Amavi Cabernet from Walla Walla and an impressive list of Pinot Noirs from Ribbon Ridge, Stoller, Lange, King Estate, J. Christopher, and Sass. Topping the list from California are wines from Wrath, Handley Cellars, J. Lohr, Steele Wines, St. Francis, and Pedroncelli. Gard and Desert Wind are two of his “discoveries” from Washington.
But when it comes down to discoveries and curating wines, which sommeliers seem to claim as their area of expertise, he is more than up to the challenge. A recent offer consisted of two single vineyard Rieslings: 2021 Maidenstoen Wirz and 2021 Maidenstoen Lafond Vineyard. Total production of each was 80 cases. A small, family-owned winery, Maidenstoen specializes in single vineyard wines. Wirz is an old vineyard in San Benito, and Lafond is located in Santa Barbara. The deal was 4 bottles for $60. Lafond in the Sta. Rita Hills AVA is famous for its Pinot Noir and has 10 acres of Riesling planted back in 1971.
A study in terroir for $15 a bottle and a great introduction or re-introduction to the Riesling variety? While admittedly that offering leans toward the esoteric, here are the current inside deals with wider appeal and first-rate wines:
4-Bottle Reds:
2016 Desert Wind Zephyr
2018 Peterson Old School Zinfandel, Tollini Vineyard
2017 Handley Cellars Ranch House Red Blend
2021 Wrath EX Syrah
And the Whites:
2021 Peterson Winery 3V Bradford Mountain Vineyard White Blend "The Egret"
2020 Miner Paso Robles Viognier
2022 Meadowcroft Russian River Valley French Colombard
2020 Wrath Fermata Chardonnay
Each is selling for $59.95 plus $6.99 shipping.
Reversewinesnob is to be applauded for challenging the tendency of most people to equate price to quality. That’s at the core of snobbery. If any of those wine marketing experts read this, maybe they should see this as a way to reverse the overall decline in sales.
Just a thought. Not a prediction.
