Is the Wine Industry Recession Proof?
Every year I head off to Napa for the annual Wine Industry Financial Symposium. Hoping to pick up some new pearls of wisdom and latest industry trends, I left the symposium feeling quite positive about how we're running our business. It appears we're doing everything we should during these tough recessionary times. It also appears that our type of winery, the family-owned, well-established, value-priced, quality-oriented, appellation-driven brand is perfectly poised to pick up some new business as consumers trade down.
The symposium is in its 18th year and is a combination of consumer data, financial experts, and industry surveys on the overall health of the wine industry. While a number of indicators point to the fact that wine is still a good business to be in, (better than say, automobiles or new home construction) it's tough and getting tougher each day. Big wineries, as well as small ones, are feeling the crunch.
Cautious optimism was the mood of the day.
Trading down was a major topic. A lot of discussion occurred about the future of the $100 Cab. Then again, I was in Napa, so I guess that's to be expected. (Admittedly, I felt pretty smug, since our Cabernet averages $22-$24.) Statistics show that today's consumers are desperately seeking value, but this doesn't just mean price. They're changing where they shop and what they consider necessities. (I don't know about you, but there's no question that wine is a necessity!) Value is in vogue and so is frugality. It's cool to shop at Costco. And this is true across all income levels, even the most affluent. But, Americans still love luxuries. Unlike a costly vacation or major home improvement, wine is still an affordable luxury than provides instant pleasurehallelujah!
At the end of the day everyone agreed: every major recession has one thing in common. They all end. So, while we're not out of the woods yet, it appears that the economy is getting less worse. And, wineries that are relevant to today's consumer will fare the best.
Now back to that $100 Cab. I know of scads of reasonably priced, exceptionally delicious and very pleasurable wines to drink. As a matter of fact, I have one right here in front of my nose.
And quite a few cases in the back if you want more.
This is a blog about what it's really like to be in the wine industry...so sit back, take a sip and enjoy!
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