As I gain more and more experience in the wine industry, I can't help but wonder how the high-end wines are suffering in this economic climate. Are things really getting better? Are customers back to purchasing those $35 bottles instead of $15 bottles? My guess, they are not. What does that mean for the future of fine wines and the wine industry as a whole?
As a consumer and individual watching how I spend my money, I continue to look for great value in the wines I drink. Both excellent imported and local wines can be found for $10 or $15. As this recession continues, I do not foresee a change in my drinking habits. Will this trend continue and how do wineries with product priced higher than $35 adapt?
I wonder if "cult" wines or ultra premium wineries will start to redefine their image and product lines. I would assume the majority will try and maintain the top-tier reputation they have, while others, may try to shift their brand image. Will the wine industry mold to cater to mass produced, mediocre wines? Will quality be compromised or will wineries try to make the same quality and sell for less?
If the later was to happen, how will that effect the industry years down the road? Will consumers be accustomed to purchasing high quality wines for less? Becoming unwilling to pay more for a product they have been paying less for. Some economists might argue supply and demand, as money begins to flow back into the economy and consumer's pockets, the amount of customers willing to pay more for the same product will also increase. But I would argue back that as more and more people start to drink wine especially during this time, the average consumer has realized you can get high quality for less. So, to accommodate this current trend, how do wineries adapt, do they purchase different grapes, start growing their own, heavily discount wines, produce less or even take a heavy financial hit now in hope of a strong economic turnaround?
This post really ask more questions then it answers. Only time will tell. Until then I will continue to drink some great value wines in the $10-$15 range. How about you?