This morning I found myself nodding in agreement as I read Patrick Comiskey's LA Times article: "Fine wines at great prices." (Click here for the story.) In this piece, he discusses what seems to be an downward adjustment in wine prices and the many deals and steals now found in the marketplace:
"...In 2009, we wrote in these pages that, in terms of a sales sweet spot, $25 was the new $40. If anything, that median is trending further downward in 2011. For many, $15 to $20 might be the new $25." ...
The article goes on to quote wine retailers and the trends they've seen, including the increasing floor space they're giving to "bargain" wines. The quality, sub-$20 bottle of wine has been a hot commodity for retailers and wineries alike during the past few years, as have unique varietals and white wines (typically more affordable than reds).
I agree with a lot of what Patrick and the retailers report. This discussion about wine prices and what will be "the new normal" has been ongoing within the wine industry (and the industry publications) ever since the 2008 crash. Wineries who were forced to cut prices or make more affordable wines because of the times have been holding their breaths, waiting to see if prices come back up. And they have, to a certain degree, but those "affordable" bottles do seem to fly off the shelf faster than they used to.
Even up here in Anderson Valley, we've seen wineries cut prices on certain wines and work on producing more affordable bottles. If they're not already making more of these wines, then they're certainly talking about it for the future. While, as Patrick states, good Pinot Noir can be difficult to find at low price price points, producers are certainly trying. The higher-priced bottles are still moving due to prestige, points, scores, or reputation, but for the average consumer walking in the door, if they can get a deal, they'll take it.
Here at Foursight we're not an exception to what's happening in the industry. This past month we released some Pinots that retail at $20 and $28 a bottle, and they're flying out the door by the case (click here to see our wines list). We're also lowing our mid-priced Pinot Noir bottling for the future by a few dollars a bottle to reflect the changing point of resistance, so to speak, for our consumers.
We've sensed that the top price people are willing to pay for a great bottle of Pinot has lowered slightly. I say slightly because for tiny producers like us who sell direct to our customers and produce small lots of high-end wines, there's still a demand for the premium bottlings, and we believe there will be into the future. However, we've felt that perceived value has become more important to wine consumers during the past few years.
As one customer described it, in the past buying a "bargain wine" could be a source of embarrassment among a group of friends who all collect cult wines and like to show off their wine cellars. Now, getting a good wine at a great price is something to call everyone up and brag about.
I think this possible price adjustment also speaks to the changing demographics of wine drinkers. As studies have shown, millenials don't purchase as much wine for reasons of prestige and are more willing to experiment with different producers, varietals and regions.
So is the new, hot price point really $15-$20 per bottle? I think we need a few more years to really call it, but I can guarantee every wine producer out there is watching this closely.