It strikes me that an awful lot of adults fit this profile as well. For them it’s basically a ‘lifestyle’ thing as opposed to a ‘wine’ thing. Most people I know don’t understand there is a difference. Keep in mind the folks on this board are at the far end of the curve.
Now if the argument is that more millennials as a percentage want those things, and fewer are true geeks, I’d buy that. Or that they want those things but at a lower price point, that makes sense too.
The article notes that Gen X is aging and starting to spend more money on wine. Which I’d expect. But is Gen X spending more relative to their income level than Boomers? It doesn’t say. Are Millennials spending less money relative to Gen X? It doesn’t say.
Also, the article indicates that people were surprised that Millennials didn’t make up a bigger percentage of the growth in sales of “expensive wines”. Should they have? Again, relative to their income level are they buying more or less wine than previous generation? If they are just making less I’d expect they’d spend less too.
Also what’s an “expensive wine” for the purposes of the report? $25, $50,$500? Article didn’t say.
Tough to draw conclusions around whether this is something unique to Millennials or whether part of a larger trend- and we know and have discussed in this thread some of the larger trends.
We actually think about this a lot. We just built a tasting room (or should I say “have nearly completed building a tasting room and it seems to have taken an incredibly long to even get to that point”) after using some combination of turned over barrels in the not-so-attractive winery or re-purposed living room space for years. We are still going to be by appointment and most tastings will be privately conducted by someone who knows what they are talking about. If you’re a 2some you might get linked in with another smaller group sort of like if you showed up at the golf course on a busy day. We want to still bring people down through the winery and have myself or other winery staff drop in on tastings as much as possible. We are putting together a presentation of photos and video that could be viewed on an iPhone or an iPad that we provide so that there is visual information of the vineyards we are tasting folks on. The tasting room outdoor area does have some “hang” space that overlooks the vineyard but it’s not exactly what we are encouraging although regulars would certainly be welcome to use it as such. We do have a $40 tasting fee but it is almost always waived even if people don’t necessarily meet the alleged criteria for having it waived (generally if you buy some wine and aren’t a jerk we don’t bother with the fee). We do try to think of how to tailor folks’ experience and make it interesting, fun and informative beyond the wines.
That being said none of this is easy and we are unfortunately constrained by actually having to make money at the end of the day. In the wine business it isn’t impossible but it’s not particularly easy and you ultimately have to have your bread buttered where your top customers exist. We have attempted to keep this as grassroots-y a place as possible but ultimately growing and making Pinot Noir is largely going to put you in a place where having +$35 bottles of wine is really the only way to survive, keep partners at bay and the bank away from the proverbial door. I know if our plan includes being around for another 20 years (lordy) we will have to find replacements for a clientele that is easily mostly over 50. Simply presuming they the folks who are now 33 are going to be customers when they are 53 is a terrible plan. Preparing and enacting a plan for that future is hard.
good points.
Haven’t those durn millenials gotten off my lawn yet? Grr, well I’ll just wait them out. That’s sure to work.
anyway, I certainly wasn’t spending the equivalent of $40+ for a bottle of wine on any regular sort of basis until I was well into my late 40s (I did buy some 1985 Bordeaux futures when I was still living at home and before I had to start paying rent). So I’m not sure this is at all significant.
2016 Cos is going for $190 today. 11 1982 dollars ~= 29 today dollars.
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(Edit: original post used 2016 for inflation calc., now 2018.)
This is my exact situation too (except a 3.5 year old and one due in April). I can say it was a long process to get to where I am now with wine, starting at 23 when I would chug my girlfriends wine because I hated the taste. It wasn’t until the last few years that my budget has allowed to me to explore wines over $20 and build a cellar. And I am at the beginning of what’s considered a millennial so give them some time.
As others have mentioned you’d have to look at a cohort analysis over time (comparing same age consumers over time) to really make any conclusions, so who knows.
It seems to me the pricing for fine wine, over time, has roughly followed the stock market / global wealth. As a brief example, quick googling shows 1982 Lafite was sold as futures for something like $33 USD/btl. If one had invested $33 USD in the S&P 500 in Jan 1983 and reinvested dividends, they would have had ~$1440 by Jan 2019. Well, one can purchase a bottle of 1982 Chateau Lafite for maybe $2,500 today, but count storage costs of $2/yr invested in the market over time, and you probably get pretty close to that $2,500 #. That is despite an enormous surge in the interest in Chateau Lafite over the past 36 years that has caused Lafite to easily outperform other non-DRC wine brands over these period, so this outcome (appreciation of the wine slightly exceeding the stock market) is probably a near best case scenario.
Wine is facing the same issue that other assets, i.e. housing are facing. House prices have gone up given the surge in global wealth, but incomes haven’t risen at nearly the same rate, leaving housing pretty unaffordable for the category of young Americans who have not benefited from the past 30 years of asset inflation. An average 25-30 year old owning a home right now is long shot whereas if you had a good job 40 years ago it should have been expected.
I imagine fine wine is in roughly the same place. If you are old and asset rich after years of compounding wealth in the markets, you can afford today’s wine prices. If you are young and lack assets and your source of money is income, then you’re priced out of most fine wine. Result is boomers with cellars full of thousands of bottles of wine and younger people struggling to afford any fine wine [obviously exaggerating here a bit, and keep in mind that we’re talking about a small subset of the world that can afford to even be relevant in this conversation, whether in 1983 or 2019].
So wine is being ruined by people paying stupid prices for wine AND by people refusing to pay stupid prices for wine.
Really?? I paid $19.50 for the '82 Cos in 1985. Was that on futures? I don’t remember any second growths going for less than $19-$20 on the shelves, and that was a good price at the time.
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First of all, that’s a drop in liquid volume, not dollars, if you read the bank’s actual report.
Also, the dropoff in case sales in late 2018 is so steep that you have to wonder if there’s some statistical goof. This seems very improbable:
The report doesn’t include sales figures before 2013, but I’m not sure this statement in the story is correct:
Overall wine sales in the US are actually down over the last six months – the first such drop in 25 years. Even during the 2008 recession, people kept drinking more wine.
As I recall, in 2009, the dollar volume of wine sales in the US declined about 30%, though the amount of wine sold was about constant.
If you read the report, the drop in volume is entirely in wines under $9 a bottle. Sales of higher-priced wines continue to grow. So I’m not sure how much these stats matter to people like us.
When I came out of law school in 1992, and got more into wine, I distinctly recall paying $25 for 1990 La Louviere, $45 for 1989 Pichon Baron and 1990 Lynch Bages for $50. And yes, I grabbed them and loved them. Was hooked. Yea these prices have spiked quite a bit, especially for vintages like 2000, 2005, 2009 and 2010, and I guess now again for 2015/2016. But, I also grabbed many Classified Growths from more classic vintages that suit my palate, like 2014 and 2008 (2004 and 2001 solid as well), for $55 and less. Leoville Barton. Rauzan Segla. Haut Bailly. GPL. Dme de Chevalier. Gazin. Even Pichon and Lynch were not that much more, and inflation adjusted, perhaps even a better deal. I can certainly better afford Lynch Bages today than I did back in 1992. So I do not see things as so bad. I see us also having a greater range of options today. The range of inexpensive, fantastic offerings from places like Beaujolais and Loire boggle the mind. Even Rhone has some great value-plays.
For the smart Millienials, including my associates who make far more than I did back in 1992, I am not shedding tears. They will be fine.
And if they bring wine purchasing down, perhaps prices drop given lack of demand.
These inflation adjusted figures are totally misleading. Figure wine is part of a meal, and you get a lot closer to how ludicrous the pricing of wine has become. Two good sized steaks in 1984 were around $8 each. Vegetables etc added say another $2. Total $18. Cos 1982 was selling for $18, about the same cost.
Today the same meal is around $35, but the Cos 2015 would be if you shopped around $160.
The Millennial issue was one of the big topics of the Unified Wine & Grape Symposium this week in Sacramento (one of the biggest US trade conferences in the industry). Wine and Sex Off the Millennial Menu | Wine-Searcher News & Features
The article does a good job of summing up just about every conversation I had with people at the conference, except for the ones discussing whether Cannabis is a substitution for inexpensive wine.
TLDR: no one really knows exactly what to do about Millennials and wine - even those whose job it is to solve that problem.
Two things that are killing wine:
Pushed by a lazy and uneducated press and aided by bar/restaurant owners that are lazy, uneducated and greedy. The simple quick easy profits are used to buy ads that drive coverage and are then used to push more of the same crap. So it goes round in a circle. Mixologists and beer gurus abound. Pushing tacos and fanatsy pizzas. Articles are running 10-1 against wine. I just wish I was going to live long enough to see these little twits grow up. Eventually they will turn to wine. But the damage will be done.
Ok, so by your standard the Cos should be ~= $35, by inflation it should be ~= $43. Either way, I think the point is made that the cost of the wine has dramatically outrun the cost of other things (and the wages paid to the buyer).
And if this is true, the world is really in trouble.
https://www.wine-searcher.com/m/2019/01/wine-and-sex-off-the-millennial-menu
Reading that Gray piece in tandem with the other does make me suspect he’s getting paid by the clicks.
In which I translate:
“I graduated at a time and place that allowed me to buy fantastic vintages of good-to-great wines for prices that were affordable to me. Life was good!”
Yea these prices have spiked quite a bit, especially for vintages like 2000, 2005, 2009 and 2010, and I guess now again for 2015/2016.
“Sure, those coming after me are getting screwed by comparison.”
But, I also grabbed many Classified Growths from more classic vintages that suit my palate, like 2014 and 2008 (2004 and 2001 solid as well), for $55 and less. Leoville Barton. Rauzan Segla. Haut Bailly. GPL. Dme de Chevalier. Gazin. Even Pichon and Lynch were not that much more, and inflation adjusted, perhaps even a better deal.
“But, I happen to have personal tastes that mean the broader trends in the market don’t negatively impact me.”
I can certainly better afford Lynch Bages today than I did back in 1992. So I do not see things as so bad. I see us also having a greater range of options today. The range of inexpensive, fantastic offerings from places like Beaujolais and Loire boggle the mind. Even Rhone has some great value-plays.
“Anyway, I don’t personally feel any of the pain discussed herein, so I’m not too sure what the big deal is. Besides, they can always eat some other flavor of cake.”
For the smart Millienials, including my associates who make far more than I did back in 1992, I am not shedding tears. They will be fine.
And if they bring wine purchasing down, perhaps prices drop given lack of demand.
“My own anecdotal observations support my position. And, if I’m wrong, Millennial misfortune could even benefit me.”
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