Text Size:-+
06.09.2011

Wine: Now THAT'S a Lousy Business

burning_money.jpgAs many of you know, the wine business was hit pretty hard in the recent recession. Lots of wineries went out of business, and lots of wine sat around unsold, which meant people lost a lot of money. From the big Vegas restaurants that started refusing their allocations of Harlan Estate and Colgin, to the little producers whose mailing list customers decided they could forgo buying the next vintage, and instead pick up something at Trader Joes, lots of people were hurting.

We're still seeing (if you know where to look) the fallout of the downturn, as wineries quietly change hands, and as wine continues to pour into the new outlets that have sprung up to help producers at least break even while moving their inventory.

While I'm not in a position (nor nearly knowledgeable enough) to suggest that the industry may be turning a corner, some basic indicators are trending positive.

One of the most prominent measures, the California-based Wine Institute's calculation of domestic wine sales, showed a 7% increase in all retail wine sales in 2010.

Combined with a 26% increase in exports in the same time period, and the somewhat dubious announcement that America now consumes the most wine of any country in the world by total volume, things certainly seem to be headed in the right direction.

Last but not least, let's figure in the most recent, and potentially earth shattering announcement of all: that after nearly 13 years in business, Wine.Com made a profit last quarter for the first time ever.

Now if that doesn't blow your mind, I don't know what will. I nearly fell off my chair.

Comments (7)

CJ and PK wrote:
06.10.11 at 1:12 AM

Tell that to the Bordelais!!

AC wrote:
06.10.11 at 8:57 AM

Nielsen's reported gains as well in the channels they track: Total wine dollar sales trend in the US over the last 26 weeks ( to end of April 2011) was +4.8%. Domestic sales drove the growth gain.

D wrote:
06.10.11 at 1:43 PM

Without a doubt some positive news. A few thoughts come to mind: our industry just like others is cyclical so there are going to be downturns without a doubt and from a business perspective you have to be as prepared as you can and hope for the best. Despite your links to good news one should keep an eye on the economy still as some say we're not quite out of the clear of a double dip.

wine.com just now making money....*gets up from ground*

06.13.11 at 7:19 AM

I'm glad to see American wine consumption has become so large. I think it will continue as the children of Baby Boomers follow their parents example and enjoy and appreciate wine. The one change I would welcome is more realistic pricing on Wine Lists especially in casual dining restaurants. The on-premise accounts that do a 1/2 price Wine Wednesday feature are doing weekend like business. Distributors and their suppliers will offer "special" wine pricing if it will increase their exposure and depletion's. It is a win-win situation!!

06.14.11 at 8:56 AM

I'm a wine retailer in the Rust Belt, where unemployment was at 15% not too long ago. I had my best Holiday season ever in 2010, and year-to-date I'm 10% up over last year. I like to think this is because I'm such a darn sharp businesswoman, but it's probably because people are buying again. They're not buying high-end, mind you, but they're buying...

Tom wrote:
06.15.11 at 7:03 AM

I'm an importer and internet retailer in DC. 2011 looks to be marginally better than 2010 but not by much. And 2010 was a disaster in this area, everyone I talked to was down around 20% from 2009. The price per bottle went down in 2009 compared to 2008 but quantity was up. In 2010 people just bought less wine.

I hope the fall/holiday season will rebound a bit this year but so far there's no real indication of it.

Mark wrote:
06.15.11 at 4:59 PM

Hey Alder-How are things, it's been too long. After spending a few weeks in South America, there is certainly room for growth in the export market as well. While the entire population in many of those countries can't afford to spend $20, or better yet for California vintners $50 per bottle, there is a percentage whom can.

As for online sales-I think too many companies are still missing the mark with their offerings and on top of it, social media simply doesn't deliver customers as of yet for the average winery.

My company didn't launch until Jan 0f 2010, so I don't have anything but a negative market to compare with our current state of affairs, but it does appear 2011 should be better than 2010. Average sales are up according to most everyone I speak with, although still below the good old days numbers.

Comment on this entry

(will not be published)
(optional -- Google will not follow)
Yes
 

Type the characters you see in the picture above.

Pre-Order My Book!

small_final_covershot_dropshadow.jpg A wine book like no other. Photographs, essays, and wine recommendations. Learn more.

Follow Me On:

Twitter Facebook Pinterest Instagram Delectable Flipboard

Most Recent Entries

Vinography Unboxed: Week of July 7, 2014 Vinography Images: The Berry 2014 West Sonoma Coast Wine Festival: August 2-3, Sebastopol, CA Drew Wines, Mendocino, CA: Recent Releases Vinography Images: Pocket of Sun Vinography Unboxed: Week of June 29, 2014 Vinography Unboxed: Week of June 22, 2014 Vinography Images: Spring Pastels Blaufränkisch is Best Before Breakfast Austria: The Wine Lover's Dream Destination

Favorite Posts From the Archives

Masuizumi Junmai Daiginjo, Toyama Prefecture Wine.Com Gives Retailers (and Consumers) the Finger 1961 Hospices de Beaune Emile Chandesais, Burgundy Wine Over Time The Better Half of My Palate 1999 Királyudvar "Lapis" Tokaji Furmint, Hungary What's Allowed in Your Wine and Winemaking Why Community Tasting Notes Sites Will Fail Appreciating Wine in Context The Soul vs. The Market 1989 Fiorano Botte 48 Semillion,Italy

Archives by Month

 

Required Reading for Wine Lovers

The Oxford Companion to Wine by Jancis Robinson The Taste of Wine by Emile Peynaud Adventures on the Wine Route by Kermit Lynch Love By the Glass by Dorothy Gaiter & John Brecher Noble Rot by William Echikson The Science of Wine by Jamie Goode The Judgement of Paris by George Taber The Wine Bible by Karen MacNeil The Botanist and the Vintner by Christy Campbell The Emperor of Wine by Elin McCoy The World Atlas of Wine by Hugh Johnson The World's Greatest Wine Estates by Robert M. Parker, Jr.