- US wine prices to offer ‘unprecedented retail value’ in 2020, says Silicon Valley Bank
- Pinot Noir grape prices dropped by 13% in 2019 in California, says brokerage group Ciatti
- But premium wine sales are still expected to rise
Prices for some US wines may fall this year, largely because fewer bottles are being sold and this has led to an oversupply of grapes, said Silicon Valley Bank in its annual ‘state of the wine industry’ report.
That could mean more deals for consumers, although the premium end of the market – above $10-a-bottle – was still expected to grow by three to seven percent in value in 2020, said the bank’s report.
‘The wine supply chain is stuffed,’ said Rob McMillan, founder and executive vice-president of the wine division at Silicon Valley Bank (SVB).
‘This oversupply, coupled with eroding consumer demand, can only lead to discounting of finished wine, bulk wine and grapes,’ McMillan said.
‘US wine consumers will discover unprecedented retail value in 2020 and should buy up.’
SVB said the oversupply, mainly affecting California and Washington, was not due to speculative planting but rather a result of wineries failing to engage new consumers.
Millennials, aged between 23 and 38 years, have not embraced wine quickly enough to cover for retiring baby boomers.
‘We’ve never made better wine,’ said SVB in its report. But it added, ‘we are increasingly missing the mark on consumer expectations’.
Wine consumption in the US fell in 2019 for the first time in 25 years, according to global drinks research group IWSR.
Prices for Pinot Noir grapes in California dropped by nearly 13% in 2019, said wine and grape brokerage group Ciatti.
‘This marks two years in a row where the overall Pinot Noir price has dropped,’ it said.
That was despite the 2019 Pinot Noir crop in California shrinking by 16% versus 2018, said Ciatti, which added that California’s overall wine harvest in 2019 was the second smallest since 2011.
Prices for California Cabernet Sauvignon grapes stayed level with 2018, but Chardonnay prices fell by 7.4%, Ciatti said.