California Wine Consumption Slumps: With Competition Growing, What’s Next In Pricing?

Standing in her wine tasting room she declared, “We’ll never have a 50% off case sale.” Nine months later this California winery co-owner is hocking 50% off mixed cases of their wine. Many other wineries are doing the same. One Paso winery sells 50% off mixed cases of wine 56 days yearly.

Napa’s Stags’ Leap was offering 40% off bottles, 50% off cases. (As of 8-25 they are offering 30% off bottles.) Ditto Sterling Vineyards (and they both included free shipping.) Sculptera Winery in Paso, same thing. As of 9-25 Foley Wines is offering 40% bottles.

Why is this? As a lover of wine, what does this mean to me?

It means you are probably enjoying more spirits, dabbling with cannabis, consuming less alcohol to lose weight or your doctor told you to temper your drinking. You’re savoring less wine. It also means younger people (think Gen Y & X) are consuming less wine. Boomers are purchasing less wine and there’s competition between winemakers. That’s how price wars start.

Good opportunities await. Since winemakers are selling fewer bottles you’re seeing some great wine on sale.

High inventory puts pricing pressure on wines we want to savor. We’re seeing better offers even with the economy in reasonable condition. Should a recession rear its ugly head we’re likely to see even more unsold wine price drops to liquidate cases stacking up in warehouses.

Here are winemaker’s challenges selling their wares, reported recently by Rob McMillan in the First Citizen Bank (formerly Silicon Valley Bank) yearly State of the Industry.

1-Wine tasting room visits declining

2-Retail wine bottle inventory growing and overflowing retail sales channels

3-Spirit sales eclipsing wine sales for the first time in 45 years

4-2022 total US wine consumption down 11 million cases from 2021 peak

4-A Gallup survey of 19-30 year-olds indicates cannabis use increased up to 28% while alcohol use declined 68%

5-Another Gallup study indicates 40% of adults believe cannabis is not harmful while only 16% believe alcohol is not harmful.

This is a winemaker’s nightmare. It’s a wine lover’s dream.

Will we see the cost of tasting room visits decrease? Will we see decreases in the cost of a bottle of wine? Will wine club perks retreat to cut costs or will they increase to keep you onboard?

Depending on your favorite winemaker’s position and philosophy, you’ll probably see it all in some manner.

This means better bottles of wine for your collection at lower cost. When you see 10% discounts remember there is more downward price pressure than you perceive. Be patient. We’re looking for 30%-50% level discounts.

This process started recently as wine consumption peaked in 2021. According to McMillan’s reporting California and Washington State’s current wine grape acreage exceeds demand. There are many winemakers reconsidering their pricing strategies.

There’s a reckoning in process here with too much grape & wine available and too little demand. Things are changing.

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Some notes on our wine ranking system.

Bill & Erin Hodge write about California Wine, the estates & winemakers producing them and educational information about Vino. Living in California Wine Country provides a front row seat to the places you want to visit the most here in the Golden State.

– -✰  means -What’s next on your list of wines
-✰  means -Not liking it too much
✰ means  -We’ll drink this wine, especially if it’s hosted!
✰+ means -You’ve got our attention and we might buy this wine.
✰+ + means -We’re hooked and we’re going to buy this wine.
When you see -✰/✰+  with a slash, it means we disagree.