California Faces the Grape Apocalypse due to slump in wine sales | Hacker News Reader

California Faces the Grape Apocalypse due to slump in wine sales

wine-searcher.com

Well, CA wines are, on the whole, ridiculously overpriced.

A lot of people moved in on that, making it not entirely unlikely that supply now outstrips demand?

Same thing happened in various regions in France at various points in time. The viable plots will be reclaimed at some point, and make some fine wines in the future, except possibly not at the price point the original owners had in mind...

California wines have had a poor price-to-quality ratio for many years when competing with ubiquitous wine imports from other countries. It is difficult to sell California wine when you can buy a better bottle from France for half the price. Outside of California, many restaurants preferentially serve European wine because the price disparities are so large, particularly for relative quality.

It benefitted from limited competition for a long time but that has not been the market reality for more than a decade.

I like how on side the growers are lamenting having to sell wine at less than 1$ a gallon and there is a lot of emphasis on "how exiting, less than 20$ per bottle!"

Bottle + cork + label can cost as low as 1-2$

Even at a median 5.5$ in 2022 for a gallon of wine that's still around 1$ of wine for bottle.

I think the price might be a problem.

This happens from time to time everywhere, here is an article from my country 15 years ago [1]. I think I hear about a grape glut at least every 5 years or so in New Zealand and Australia.

Consumer habits change, producers are understandably cautious to react. Eventually they figure out what the market wants, or find new markets.

[1] https://www.stuff.co.nz/life-style/2664945/Grape-glut-hits-w...

Feel free to flood the Canadian market. In my province the cheapest low quality bottle of wine anywhere is still $13+.

Though I’m assuming 60% of the price is tax because this country is a circus.

It seems to be around 10%.

It's much higher in many provinces: https://www.biv.com/news/economy-law-politics/industry-balks...

>"Our winemaker who sells wine to the BCLDB at $10 in this example then sees the BCLDB slap an $8.90 mark-up on the wine to come up with an $18.90 wholesale price. For retailers who need to add a 30 per cent margin, that wine then gets priced at $24.57."

Good. Maybe they will price them properly now.

TLDR: Americans are drinking less wine overall, especially on the low to mid market side, and small producers have been hit the hardest. People have been likely switching to things like hard seltzers and other alternatives. "Millennials are killing the wine industry" is more like "millennials are choosing less wine and higher end things when they do." Mid to high end market is doing find.

Sonoma is definitely slow right now, and Napa has less foot traffic.

They're feeling double pressure in the low to mid market because French and Italian wineries have started selling cheaper and cheaper bottles of wine into the American market. Trader Joes has always had the three buck chuck (née two buck chuck) which I consider barely drinkable but now they've got an Italian Pinot Grigio for $3.50 [1] which has been surprisingly good and hasn't run out of stock despite being very popular. They've also got a good $5 French rose and my friends have been praising some of their cheap reds.

Imagine how cheap it must be to produce if an imported bottle costs $3.50.

[1] https://www.giardinowines.com/

This isn’t meant to be a normative statement, but the French government subsidizes wine, cheese and other agricultural export production significantly.

True, but they also pay to destroy it when prices are too low.

Good god, they should just give it away as a marketing cost.

Would this increase prices, decrease prices, or leave prices unaffected?

Depends on how they manage distribution and market expectations to maintain a price floor. OPEC for artisanal delights. I agree care must be taken to not devalue overall product volume.

The same thing is happening in Europe.

https://www.bbc.com/news/world-europe-66623636

But in this case you can't blame it on the price...

The cheapest wine _in a glass bottle_ i can find in the European equivalent of Trader Joes is 1.5€ so it checks out (3€ for a Pinot)

That qualifier speaks volumes. Cans and boxes are no longer the horrorshow they once we're for wine and other beverages.

It’s almost as if huge wealth disparity causes decreased spending.

Consumer spending isn't down, just this class of wine sales, and like the GP suggested, it looks like it's just being displaced to other products because different beverages (and inebriants) are in fashion.

Also CA wine is wild expensive and overly sweet. Not all, I know I know, but the prestige stuff from Napa is comedic.

Most people don’t prefer bone-dry wines, but are shamed into asking for them (example: “comically sweet”), so the vintners avoid calling anything “sweet” even when it does have a bit of sweetness.

Man, i love some Porto, such a shame it's so expensive.

The most readily available sweet wine i can find here in Europe os sold in comically big 1.5l bottles, i'm a little ashamed to consume it in company.

Idk man, tell that to the market in Europe. I didn’t say sweet wine was bad, I said Napa wine is over priced and often sweet and juicy at the expense of more refined flavours - but still costs ridiculously more than nicer wines from elsewhere. But that’s America for you.

And, before you write me off as a pure US wine hater, I often stop into a shop here in London, Pacific Wines, which specialises in US stuff and buy things. As I said, not all US wines.

Yes, overall wine consumption in the U.S. is down 4.4% Yes, “bulk” wine (about 90% of all production last time I checked) is loosing ground to hard seltzer, etc., reducing demand for ordinary wine grapes. But, high-end wines (10%) has gotten very crowded, discouraging new boutique wineries from starting and reducing demand for high-end wine grapes as well.

Growers are facing reduced demand across the board. The market for wine grapes will correct as some of those growers leave the market, however it takes a few years and some cash to repurpose a vineyard, so many growers will wait and see before they make any rash changes.

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