Doom-mongering about declining wine consumption has reached fever pitch in the press. Is there nothing more than hard seltzers and mocktails to look forward to?
I've always thought the Geoegians gave done a great job at marketing because they use the small, boutique wines and qvevri wines speak for the country and that then gives the middle level and bigger producers a little more stay in the market since most people aren't going to be spending what the small producer wines cost. But also I think young people just care about source, environment, justice etc. Gallo isn't producing all that cheap wine with workers who are paid a living wage.
When Kendall Jackson Chardonnay is on the wine list at a cheap diner in the USA for over 20$/glass, no wonder people are turning away.
I personally would love to see this as a the metric
"What about a metric that looks at the number of families who support themselves wholly or partly from wine production? "
for success in the industry. That is true success.
The only rebuttle I'm sure the big guys would give is that they hire lots of employees for their industry. And that might be true, but the small guys are buying boxes, corks, glass and other materials as well. They too employ many by extension.
A brilliant analysis. Especially insightful is the list of things small wineries actually do worry about: supply chain, succession, climate change. I've been saying for years that growth of the bigs is toxic to the industry, because it means there is always a small but passionate cadre of newbie ignorami who don't yet "get it," But are merely seeking a pleasant buzz and can't see anything special about wine as compared to, say, hard seltzer. When rookies stop entering in, it means the avarage consumer has been around long enough to despise chocolate Cabernet and hot buttered Chardonnay and begin to explore new experiences and authentic wine producers with fascinating stories. I find we're headed in a great direction.
Thanks for your well-reasoned refutation of what has become a misleading memetic refrain!
$20 - $29 retail is almost certainly a sweet spot for fine wine generally, not just natural wine. Its upper bound represents a popular cut-off for what consumers (at least in the U.S. where I observe firsthand) are comfortable paying, while its lower bound reflects the reality of costs-of-production outside of that which takes place on an enormous scale and governed by patterns of manufacturing and mass-production. Too be sure, there are a lot of distinctively delicious wines retailing for under $20 – I give thanks for their existence while consuming them at least one or two days each week, not to mention their being my go-to when there more than six or eight guests to serve. But one has to search to find that sort of value. The combined cost of materials (glass, closures, etc.), taxes and shipping alone amount in most places amounts to three or four dollars per bottle, which, if distributors’ and retailers’ mark-ups have to be factored in, takes one almost half the way toward an eventual shelf price of $20 before even considering what it costs to produce the stuff in the bottle. High quality under $20 retail is frequently predicated on regions and types of wine that are struggling to be profitable, or on bottlings that are designed to be only marginally profitable in themselves but that make sense in terms of a wine estates full portfolio. And if even halfway responsible let alone organic or sustainable viticulture is factored in, staying under $20 is that much more of a challenge.
You’ll find the “youthful cohort” in less hip places like Cincinnati – where I live – too.
But you’ll also find a wealth of tap rooms and specialty spirit bars, and I think it might be fair to conclude that along with an encouraging flourishing of wine bars as come increased competition by other sorts of beverage for the thoughtful and interested drinker’s business.
I’m also concerned that what will have been the gateway for many consumers to enter the world of fine wine – namely the grocery store – is losing influence and that the quality of wine typically on offer in these establishments has declined so significantly under the very pressures of growth and squeezed profits that you cite, that the gulf between commercial grocery store wines and anything that you or I would want to drink cannot be imaginatively bridged. Put another way, I fear that potential future wine lovers, after sampling what is on offer when they visit the grocery store, will conclude that wine is a waste of their money – and on the basis of the wines they’ve sampled, that conclusion will be entirely justified.
I´d love to know what you think the basic economics of your small winery might be. What would the costs of a basic winery be and hence you can then say something about volume and price to achieve that.
I've always thought the Geoegians gave done a great job at marketing because they use the small, boutique wines and qvevri wines speak for the country and that then gives the middle level and bigger producers a little more stay in the market since most people aren't going to be spending what the small producer wines cost. But also I think young people just care about source, environment, justice etc. Gallo isn't producing all that cheap wine with workers who are paid a living wage.
When Kendall Jackson Chardonnay is on the wine list at a cheap diner in the USA for over 20$/glass, no wonder people are turning away.
I personally would love to see this as a the metric
"What about a metric that looks at the number of families who support themselves wholly or partly from wine production? "
for success in the industry. That is true success.
The only rebuttle I'm sure the big guys would give is that they hire lots of employees for their industry. And that might be true, but the small guys are buying boxes, corks, glass and other materials as well. They too employ many by extension.
A brilliant analysis. Especially insightful is the list of things small wineries actually do worry about: supply chain, succession, climate change. I've been saying for years that growth of the bigs is toxic to the industry, because it means there is always a small but passionate cadre of newbie ignorami who don't yet "get it," But are merely seeking a pleasant buzz and can't see anything special about wine as compared to, say, hard seltzer. When rookies stop entering in, it means the avarage consumer has been around long enough to despise chocolate Cabernet and hot buttered Chardonnay and begin to explore new experiences and authentic wine producers with fascinating stories. I find we're headed in a great direction.
Thanks for your well-reasoned refutation of what has become a misleading memetic refrain!
$20 - $29 retail is almost certainly a sweet spot for fine wine generally, not just natural wine. Its upper bound represents a popular cut-off for what consumers (at least in the U.S. where I observe firsthand) are comfortable paying, while its lower bound reflects the reality of costs-of-production outside of that which takes place on an enormous scale and governed by patterns of manufacturing and mass-production. Too be sure, there are a lot of distinctively delicious wines retailing for under $20 – I give thanks for their existence while consuming them at least one or two days each week, not to mention their being my go-to when there more than six or eight guests to serve. But one has to search to find that sort of value. The combined cost of materials (glass, closures, etc.), taxes and shipping alone amount in most places amounts to three or four dollars per bottle, which, if distributors’ and retailers’ mark-ups have to be factored in, takes one almost half the way toward an eventual shelf price of $20 before even considering what it costs to produce the stuff in the bottle. High quality under $20 retail is frequently predicated on regions and types of wine that are struggling to be profitable, or on bottlings that are designed to be only marginally profitable in themselves but that make sense in terms of a wine estates full portfolio. And if even halfway responsible let alone organic or sustainable viticulture is factored in, staying under $20 is that much more of a challenge.
You’ll find the “youthful cohort” in less hip places like Cincinnati – where I live – too.
But you’ll also find a wealth of tap rooms and specialty spirit bars, and I think it might be fair to conclude that along with an encouraging flourishing of wine bars as come increased competition by other sorts of beverage for the thoughtful and interested drinker’s business.
I’m also concerned that what will have been the gateway for many consumers to enter the world of fine wine – namely the grocery store – is losing influence and that the quality of wine typically on offer in these establishments has declined so significantly under the very pressures of growth and squeezed profits that you cite, that the gulf between commercial grocery store wines and anything that you or I would want to drink cannot be imaginatively bridged. Put another way, I fear that potential future wine lovers, after sampling what is on offer when they visit the grocery store, will conclude that wine is a waste of their money – and on the basis of the wines they’ve sampled, that conclusion will be entirely justified.
I´d love to know what you think the basic economics of your small winery might be. What would the costs of a basic winery be and hence you can then say something about volume and price to achieve that.