Signposts on the information superhighway that caught my attention as I went speeding past:
Will $30+ Washington wines continue to appeal to battered consumers?
Several articles recently about the future of U.S. wine sales provided some interesting food for thought around Washington’s wine industry.
First, from deep in the heart of Napa-Sonoma, some troubling news emerged from the annual Wine Industry Financial Symposium. The theme for the two-day event, “Thinking Positive – A Bright New Day for the Wine Industry,” was all upbeat and shiny until the good folks from Nielsen stepped up to the podium.
“While certain economic aspects have improved, we’re still operating against a background of uncertainty,” said Danny Brager, vice president of the Nielsen Co., which tracks consumer spending trends. “With all of that consumer uncertainty, consumer confidence is low. Even over the past six months, it really, if anything, has declined.”
Wineries and retailers are again raising prices in the vast majority of wine categories, but at the same time, promotion levels remain high, Brager said. Discounting continues in wines priced from $9 to $12 a bottle, and among those priced over $20 a bottle, according to Nielsen data. “Great for the consumer,” Brager concluded. “Probably not so good for the supplier.”
Then, on Silicon Valley Bank’s excellent wine blog, Rob McMillan served up an entertaining post on the long-term future of U.S. wine sales. His conclusion: U.S. consumers will drink more wine, but the real price paid for that wine more or less will stagnate.
So if you’re in the business of making and selling wine in Washington State, you have to wonder what, if anything, this means for the Washington wine industry.
Our state is increasingly well-known for delivering excellent wines at compelling price points, and consumers are responding. Need proof? Look no further than 14 Hands, which quickly has become Ste. Michelle’s hottest brand and frequently is available for less than $15 retail.
But when you spend time in Washington wine country, it becomes apparent that we produce a lot of bottles at $30 and above. How may Washington vintners are finding markets for this juice outside of the Pacific Northwest? For many consumers, a $30 bottle says ‘special occasion.’ (Being from the Midwest, the homeland of boxed wines, I’m pretty sure that the relatives are smiling when I walk in the house at Thanksgiving with my case of Washington wine – it relieves the pressure of finding something special at ABC to go with the bird.)
The Washington Wine Commission’s annual field trip for national wine buyers wrapped up last week in eastern Washington and it will be interesting to see what kind of feedback bubbles out about Washington wines. If the Road Trip’s twitter feed (#RTWW) was any indication, the initial buzz from this group of buyers was good. Only time will tell how much wallet share our state’s industry can capture from consumers concerned about the economy and increasingly frugal with their wine budget.
For a PR perspective, it will be interesting to see how the Commission’s and regional associations’ PR teams help wineries develop messages to support Washington wine sales against a backdrop of the recession’s long tail and consumers who are tentative about spending that extra buck.
Kitsap County waterfront: The next wine-grape Riviera
I loved Blake Gray’s quick report on his chat with Dr. Gregory Jones, a professor at Southern Oregon University who is regarded as the world’s leading wine climatologist.
And if you like West Coast pinot noir, start looking for property in Kitsap or Skagit counties.
The upshot: If you like Napa Cabs, start filling the cellar now. And if you like West Coast pinot noir, start looking for property in Kitsap or Skagit counties. Because everything’s going to change in the next several decades if global warming projections are accurate.
Jones says Napa will become a mecca for cheap table grapes and the Puget Sound region will have cool-climate micro-regions, similar to what the pinot pioneers found in Oregon’s Willamette Valley in the 1960s.
If anyone’s looking for a pinot vineyard on Bainbridge Island, just let me know.