+1. Looks like some retailers are in a parallel universe unaffected by current events.
Alan we have only had one wine shop in MN offer anything that would get me to go outside to purchase and that was WineStreet Spirits in North Oaks. All the other major shops just send me an email and tell me they are open. For me to go to a wine shop right now you better have one heck of a deal.
We are buying as the deals are good right now and I do have some room. Also want to keep all the wineries in business though my wife seems to have set this as a singular project.
All of our wine shops and liquor stores in NM are closed by the governor’s orders. Only place to buy anything right now is the supermarkets.
All of our wine shops and liquor stores in NM are closed by the governor’s orders. Only place to buy anything right now is the supermarkets.
I am sure your cellar will make it through the next month! In MN everyone has drive up delivery. ![[cheers.gif]](/uploads/db3686/original/2X/0/0ff9bfcdb0964982cd3240b6159868fbdf215b1a.gif "cheers"){kind=small}
Definitely more deals from distributors which I anticipate will continue as spring releases don’t get snapped up for restaurants. I know some local wineries that have high tasting room sales are moving more wine into the chain at discount. But I’ve not seen significant additional discounts for our local club lists, only free shipping.
If you know the right people, boxes just show up at very good pricing. As a result my purchasing is currently tilted to local vs mailing lists.
Just as a rough ballpark estimate, what percentage of wineries actually own themselves outright, versus what percentage owe a large note to the bank?
Someone in the trade told me last week that just the opposite is the case, and just the opposite happened in the financial crisis. Consumers are not feeling flush.
I think of the wine industry as a bunch of relatively independent markets. We mix them up all the time, but they really are different. And they will all react differently to this crisis.
Established High end Napa and California ‘Direct to List’ sellers. Starting here since this is what started the post. For the established producers with deep bases of direct customers, they will mostly be fine. They might have to do a bit of discounting, but their customers will want to help them pull through. I’d add the top 50 ‘sells to a devoted list’ California/Napa/Oregon wineries to this group. This group is not going to do a big price re-set, but look for deals. I’d even bet that if you were dying to buy from this group, you could get a mixed case at a deal right now with a private inquiry.
New high end Napa (and other high budget new world projects). These guys are going to be in big trouble. They simply can’t reduce prices long term because as new entrants they have high fixed costs that are locked in. Their customers like the product, but if they have to decide between a new player and a long term favorite, the money will go to the established brand. There will be close outs, sure, but they will be ‘going out of business’ type close outs.
Ultra-premium wines (eg. High end Bordeaux, Champagne, Barolo, Burgundy, a few other things). These will come down in price, maybe even attractively as a percent, but will still be expensive. Still, there will be fun deals here. They will get more interesting as the year progresses.
Mid-tier fine wine. The bread and butter of this board, this is the $40-$100 good stuff that we hunt for, from all over the world. I think (again, for Wine Berserkers) this will be the place with the best, most frequent, and most attractive deals. Especially for wine that is made in relatively large quantity, like Some Chiantis, Brunellos, or Bordeaux.
Fancy super market wine. The $20+ stuff that is a splurge for non wine nuts. This segment will be crushed as middle class consumers trade down for cheaper wine or beer or spirits. There will be great deals but for us, who cares? This is not what we look for.
Inexpensive super market wine. This market will come down a lot as well as consumers look for bargains. Again not relevant for us.
I saw Hesperian was offering their wine at something like 65% off (250 down to 75 or something like that), so maybe it’s kind of already happening? Never heard of them and didnt feel like stretching on a region I don’t know.
Again, as above, how likely is it that these people own their operations outright versus being highly leveraged?
I’m curious as to the standard business model for new [or even middle-aged] U.S. wineries [in terms of pay-as-you-go versus heavily-in-debt].
I assume the old timers, like Mondavi & Gallo, eventually paid off whatever debt they might have been saddled with originally.
Interesting thoughts on this thread, but what we all need to realize is this- none of us have any clue what is gong to transpire over the next 3-6-12-24++ months. I’m sure we all know this of course, but still, so many unknown unknowns…
To use a baseball analogy- we are most likely bottom of the first/top of the second inning on all that’s going to unfold. Let’s just hope this doesn’t go extra innings…
I’m seeing free shipping offers lately such as Ceritas today and Dehlinger a few weeks ago. I’m guessing most wineries that people on this site buy from will do ok, but others that rely on retail and restaurants will suffer. People like us seem to have more time on their hands to scout auction sites and our favorite stores looking for gems
I think this is the key though - while consumers aren’t feeling flush, this particular financial recession has, so far, affected lower income workers primarily for various reasons. Most financial firms haven’t been that hit, and those are the primary customers at the end of the day. With the Fed stepping in very aggressively, many people in finance aren’t feeling the same kind of existential dread as they did in 08 (which I remember very well). So while many funds are down, they’re down manageable levels (i.e., not bankruptcy), especially as the Fed steps in more and more. In short, I think this will be a trickle up recession as the horrific numbers from the “real” economy filter up through corporate returns.
At first, I was surprised that the emails I get haven’t had much of a price reduction, and then I remembered I’m in Manhattan, and wouldn’t expect them to, likely for this reason.
Would be curious where you have found the best deals
mostly private offers.
Michael is right, you’ll see some discreet offers til end of summer, if this drags on into Fall and Winter then you may see some price regression.
The real unknown is restaurants, without them the outlets for 97% of wines dries up, and if they buckle in, limit buying to their needs with limited options to keep cash flow for a potential winter Covid19 rebound, then there will be a lot of wine sitting in warehouses with wine coming in from everywhere this Fall and Winter. Plus I dont think diners are just going to run out and buy a $80 steak and $200 bottle of wine to celebrate, they will be more conservative with their $ til this thing is well behind us…lots of Happy Hour deals and diners.
You’ll also see a lift in wines like Cameron Hughes when it comes to Napa so wineries don’t hit reset on their PTC AMD just discreetly move some juice thru the system.
Just a data point, my local grocery store has started putting clearance stickers on a dozen or so wines (75% off). No gems, the kind of wines a grocery store would sell, but still 40$ wines going for 10-12$. Haven’t seen them do that before, at least not with such a steep discount.
This is exactly what I predicted in my fourth point above. Expect to see a lot of this.
From my perspective the upstream effect of this kind of discounting is hard to understand. The producers of these (premium super market wines) are almost entirely large scale corporations making mass produced factory wine. Are these folks deep pocketed enough to survive a few terrible quarters? What happens if they go away? How sensitive is the premium non-user market wine world (I.e. what Wine Berserkers buy) to this super market world. I have no clue.
According to Nielsen analytics (Google it) ‘on premise’ wine consumption, also known as restaurants and bars, is about 20% by volume of wine consumption.
Now let’s look at what happens for the rest of this year. My guess is that restaurants have already cut buying to basically nothing. I wouldn’t be surprised to see restaurant purchases down 80-90% for The SiP period. That’s huge! But what segment of the wine market is this. Another massive guess, but probably 80-90% of on premise wine is very similar to super market wine. It’s made and distributed by huge corporations, or in the case of wine from outside the US, large wine cooperatives. The upstream impact of this flow stopping impacts grape farmers and big companies. Some of the wineries we love get distribution into restaurants, but it’s a small part of their business, essentially overflow for excess. So some of the wineries we love will be hurt because their ‘I’ve got some extra to move’ market has disappeared. They never love this market because they have to sell at lower margin but sometimes you need the cash, or the warehouse is full.
The other side of this is that the big restaurant focused distributors now have excess to move. What do they do? They call the big retailers and super market chains and offload at a discount. Supply goes up up up and prices continue to fall.
Corollary: If there’s a wine you want to buy a case of, and a local store has it, call them and make a low ball offer. You might get a pleasant surprise.
Question: Is this ethical? It’s the opposite of price gouging. Is it ever unethical to demand atypically low price?
It’s something I’ve been thinking about for my local wineries that are offering deals to move inventory. I kinda don’t want their crazy deal if I can afford to pay a higher price.