Throughout my 12 year career in the wine business, I have seen many trends come and go.  Never before have I seen the economy play such an important role in the market place.  Back in late 1990’s early 2000’s when our economy was booming, the high end wine industry was in its peak.  I had a very difficult time getting my hands on some of the big names such as Silver Oak, Caymus, Plumbjack, Shafer, etc.  I was told that these wines where in such high demand and they were allocated out to restaurants and wine shops throughout the state.   If I was lucky, I would get a case or so of some of these wines and I would sell them as quick as I got my hands on them. It was nothing to have someone buy these wines at prices ranging from $80 to $150 per bottle. These wineries would sell out of their estate grapes every year and would have to buy grapes from other growers who they trusted to cultivate quality juice. New wineries where popping up everywhere. It seemed like established wineries would continue to raise their prices every year for no reason other than to see where the ceiling was. I continued to shake my head in disbelief when another 15 percent price increase was announced, but loyal patrons still bought these wines.

Today, things have changed. There are probably just as many wineries going out of business as there are new wineries being established. There is hardly a mention of allocated wines anymore. Yes, there are still some wines that are very hard to get, but only because they make very tiny amounts. Yes, wine lovers still pay $100+ for high end fine wine. There are just not as many of them out there that choose to pay this much for quality wines. Wineries have to adjust their whole business model to adapt to the state of the economy. Those that adjust properly will survive those who do not will go out of business.

The high end wine market has been hit the hardest. I have seen the wines ranging from $70 and up mostly effected. I feel there are a lot of contributing factors to this new trend.  First, there has never been more great wine available to consumers than there is today.  The competition is fierce and as new countries start to produce great wine at reasonable prices, others have to adjust their own price structure. Consumers are much more informed than in years past with the advent of the Internet and all the information they desire at their finger tips, it only takes a few second to Google the information they are looking for. And the most obvious reason for the fall out in the high end wine market is the unstable global economy.  

One way some California wineries are attempting to combat this trend, is by starting a new label. This has been one of the fastest moving trends to date and I have seen a number of high end wineries successfully take advantage of this strategy. The Napa Valley winery Bennet Lane (who sells their high end Cabernet for $55 per bottle and their reserve cabernet for $95 per bottle) has started a new label called Turn 4 Cabernet that sells for half the price! Duckhorn winery (also located in Napa Valley) who sells their Estate Cabernet for close to $100 per bottle, has established a new line of wines called Decoy that sell for a quarter of that price. Another leader in this new trend is James Stewart, son of Michael Stewart, owner of Stewart Cellars in Napa Valley. James was just on the cover of Entrepreneur Magazine and is being touted as the trend setter in the “second label” wine industry. His new label Slingshot sells for half the price of their Napa Valley Cabernet.  

Will this trend continue? Yes, I think a lot of the high end wineries will have to continue to be creative in getting their juice into the consumer’s hands. Is this good for consumers?  Absolutely! Just as it is a buyer’s market in the real-estate market, now is the time to take advantage of the wine market and stock you cellar with some great wines at attractive prices.

Cheers!

If you want to meet James Stewart and try his wines, The Oconee Cellar will host a wine dinner on May 14.  If you’re interested, please call (706) 453-0420 for details.

— Matt Garofalo is the owner of The Oconee Cellar Wine & Spirits located next to Publix on Hwy 44.