Sales of Napa Valley red wines come to a 'screeching halt'
April 15, 2009
By Jeff Cox
The economic downturn has brought sales of ultra premium Napa Valley reds 'to a screeching halt,' according to Dan Isenhart, wine buyer at Amazing Grapes Wine Store in Los Angeles.
But whilst the high end reds have seen a dramatic fall in sales, the mid-range wines are experiencing a boost as a result of the recession.
'Every retailer I've spoken with says sales in 2009 so far are down 25%.
Sales of those $50 to $100 bottles of wine, especially the Napa Valley blue chips, have slowed tremendously,' says Ben Pearson, wine buyer for the Bottle Barn, a major retailer in Santa Rosa, California.
'Our foot traffic is still strong, but folks are unquestionably trading down. The $5 to $10 price category is really hot right now.' He also said he is seeing lots of closeouts and reduced prices.
Sales started dropping last November and have continued downward in 2009, resulting in the first yearly drop in total retail value of wine shipments from California in 15 years, according to the Wine Institute, the trade organization for California wine.
While sales revenue is down, the total gallons of California wine shipped in 2008 actually increased by 15 million gallons.
Sales of Argentinian wines, especially, are showing remarkable strength in the teeth of the recession - up 29% in value and 13% in volume in 2008 - while France, Italy, and Spain lost market share, the investment firm of DPEC Partners reports.
That result is undoubtedly due to the excellent quality to price ratio the Argentinian wine have shown, as well as the fact that the euro's strength against the dollar last year drove prices for European wines higher. But that is now turning around as the dollar strengthens against the euro.
Have your say... To post your comment on this story, email us at news@decanter.com, making sure the relevant headline is in the subject field
I'm sure there is a slowdown, but I wouldn't necessarily consider a wine retailer in Sonoma County an unbiased authority on the disappearance of premium Napa Valley wine. . .!!
Monty Sander
I am a Wine Retailer in Fresno California. We are seeing the same trend that the store in Sonoma is. While our foot traffic has not dropped off, the purchasing of wine priced above $20 has. We are now selling more wine priced between $9 and $16 dollars than we ever have. We are also getting more close outs that allow us to put out higher quality wines within that price category.
Chuck Van Fleet, Vino 100, Fresno, CA, USA
I think the headline is misleading. Yes, super-expensive wines have dropped in sales (though I wouldn't call 25 percent a “screaming stop”), but other wines aren't necessarily hit so hard. Remember that most Napa valley wines aren't that expensive; probably the highest volume cost $25 to $50.
Make it: Sales of HIGH END Napa Valley red wines come to a 'screeching halt'. And you'd be more accurate.
Paul Franson, Napa, CA, USA
And with Bordeaux prices coming down, this will put further pressure on Napa Cabs as well.
Tone Kelly
These wines aren't worth the money to begin with. Consumers overpay for them, only enabling their greedy producers. Speaking of greed, too often restaurant wine prices are even more scandalous. Recently I paid about $10 each in a NYC resto for a Qba German Riesling that was over the hill and a barnyardy Cotes du Rhone (I didn't think either wine was bad enough to send back). By buying them (& patronizing this resto in the 1st place) I suppose I too am guilty of enabling this rapacious pricing. In hindsight I should've stuck to Plan A & shelled out the excessive $20 for bottle corkage. I'd at least have had good wine.
Abby Nash
Comments from wine retailers and restaurant managers in Calgary, Canada would suggest that ultra-premium wine sales have dropped more dramatically than 25%. One large retailer told me in early February that he couldn't recall selling a $100+ bottle since Christmas. An excellent restaurant, the Belvedere, is currently offering 30% off wines on Wednesday evenings. Good for consumers, but I think there will be casualties in the wholesale or retail business.
Kent Milani
Register on decanter.com absolutely free for news alerts delivered direct to your email inbox, and our fortnightly newsletter with advance notice of what’s coming up in Decanter magazine, offers, competitions and more.
PLUS registration is a one-stop shop for the Decanter magazine Archive and Decanter Fine Wine Tracker.
I'm sure there is a slowdown, but I wouldn't necessarily consider a wine retailer in Sonoma County an unbiased authority on the disappearance of premium Napa Valley wine. . .!!
