Wine consumers could be paying higher prices as the world-wide glut of wine and wine grapes shows signs of ending.
Reports from several major wine-trade websites are saying a series of low harvests worldwide along with a global rise in wine consumption point toward the possibility of a global wine shortage, something unthinkable a few years ago when the world seemed awash in wine.
Shanken News Daily reported California has suffered two consecutive small harvests, which means wine makers are competing for less fruit, which in turn drives up grape prices and bulk wine prices. “If you’re buying wine on the bulk market, or you’re a négociant, your costs are going to go up,” said Adam Lee of Siduri and Novy Family wines, in an interview from the Shanken report.
Similar shortages are reported elsewhere, according to TheDrinksBusiness.com. France’s Languedoc saw grape prices rise to a 10-year high and Spain’s Rioja saw its 2011 yields drop more than 20 percent, resulting in “a serious depletion of stocks matched by price rises.”
The DrinksBusiness website recently said the California wine industry “is entering an extended period of structural supply shortage.” In that same story, Matt Turrentine, of Turrentine Wine Brokerage in Novato, Calif., said California vineyard plantings have not been keeping pace with growing demand, resulting in a doubling of bulk prices in the past 12 months. Wines and Vines reported a similar story.
This report is contradicts the state of California’s grape supply in 2010, when grape growers were knee-deep in grapes and no one to buy them. Back then, according to Wines & Vines, , grape growers were bemoaning the shortage of buyers in a time of plenty.
“What happened to the grape and wine buyers?” asked Nat DioBuduo of Allied Grape Growers in Fresno. “I don’t know where you guys disappeared to. We want you guys back.”
The recent challenge has been compounded by the global recession, during which wine producers sold off existing inventories rather than invest in new plantings or increased production.
A similar move happened here in Colorado after freezes in December 2010 and spring 2011, wiped out the grape crop and forced winemakers to use existing inventory to keep their shelves full. Many winemakers saw their grape supplies curtailed or shut off as there simply weren’t enough Colorado grapes to go around, forcing some producers to go elsewhere for grapes.
Colorado hasn’t the luxury of many new areas suitable for grapes, so winemakers depending on home-grown grapes must wait for vineyards to recover before production can rise to meet demand.
Nationally, it took wine prices a couple of vintages to catch up with the recession, as wine drinkers moved away from wines costing $20 and up and turned to less-expensive brands. Restaurants and stores were unable to move premium-priced wines, and winemakers, their cellars filling up with the unsold higher-priced wines, turned instead to marketing less-expensive bottlings built around the more-affordable bulk wines.
There was plenty to choose from since the ocean of wine included some very good juice, not just from California, but from around the world. And consumers soon got accustomed to driving the prices down and being able to find much better wines in the $10–$15 range.
However, according to Shanken Daily News, with the recession softening, Americans are starting to reach for more expensive wines, which catches wineries unable to meet demands. And the small harvests means there aren’t enough grapes to allow production to ramp up enough to satisfy that demand, the Shanken report says.
Worldwide, wine demand is seen as a bull market. According to VinExpo, the international wine marketing group, the Asian wine market is expected to grow by 5 percent in the next four years, compared to a 1 percent global average. That growth is led by China’s rapidly growing economy. That immense country of more than 1.3 billion people is expected to see a 54 percent increase (to just more than 1 billion bottles annually) in wine consumption in that time.
All this means wine producers may have to deal with seeing consumers with money to spend but without the product to spend it on.
With Vinitaly slated to begin this weekend, here’s some good news for the Italian wine industry: a report today at TheDrinksBusiness.com says the Italians have grabbed 22 percent of the global wine marker, largely thanks to a 17 percent increase last year in Prosecco shipments to the U.S.
The story quoted Giovanni Mantovani, director general of Veronafiere – which organizes Vinitaly – as saying the cause for the growth can be found in “a growth of professionalism” among all Italian wine producers.
For many of us long-time Italy watchers, the phrasing comes off as a bit of an enigma. Does that mean Italian wine makers weren’t “professional” (supply your own meaning here) prior to whenever Mantovani is referring? Or that the wines didn’t reflect that professionalism?
Maybe it means Italian wine makers can be more professional by mimicking California-style wines, unfortunately something we’re seeing more and more, and forget the more-traditional styles that made Italian wines desirable in the first place.
If that’s the case, I would prefer they stay in the amateur class, with wines that tell a story of the people and land of Italy.
Or maybe il buon signore Mantovani merely is saying Italy finally is catching up with the rest of the modern wine world in terms of marketing, of getting awareness of their product out to a media-inundated world, with wine choices from every corner of the globe.
For that, we can in great part thank the many winemakers, grape growers and producers who make the long trek from Italy to the U.S., carrying their hopes and their wines to an increasingly receptive audience.
And a bit of thanks, too, to the many writers who continuously keep Italian wines in front of the fickle American public. Writers such as Alfonzso Cevola, Susannah Gold, Jeremy Parzen and Tom Hyland, among many others, too many to list, who keep this side of the Atlantic aware of the challenges of maintaining anything close to that “growth of professionalism” in a wine country often beset with economic and political conditions able to strangle even the strongest dreams.
A recent post by my friend Susannah Gold on how the wines of Lombardy are often overlooked reminded me of how we sometimes discover “new” wines, even when the wines aren’t really new.
Such is the case with me with Inzolia, an ancient grape from Sicily (also grown in Tuscany where it’s known as Ansonica) but one I remember tasting only once, two years ago during a quick pass through the Sicily pavilion at VinItaly.
I’m not even sure of the winery, since I’ve lost that part of my notebook, but I suspect it was d’Alessandro Azienda Agricola, a fairly new winery (founded 2006) near Agrigento on the southern coast of Sicily. In any case, it was d’Alessandro’s Inzolia I most recently tasted and now I wonder how I forgot about it.
Late winter isn’t usually conducive to drinking white wine but this winter has been surprisingly mild, with little snow and already we have temperatures reaching into the mid-60s. It’s mild enough for pulling the cork on d’Allessandro’s 2009 Inzolia IGT ($15).
My tasting notes recall a bit of citrus, almonds and white peach, which are extensive notes for me. The hint of minerality and crisp acidity makes this a delicious food wine, and given Agrigento’s position on a cliff above the Mediterranean Sea, it’s suitable the winemaker says Inzolia pairs perfectly with fish and sea food.
Also, the low alcohol (12 percent) makes it something you can enjoy mid-day without needing a recuperative nap afterwards. I also tasted d’Alessandro’s delightful medium-bodied Nero d’Avola, with hints of plum, blackberry and licorice. Also of note, d’Alessandro was the recipient of Gambero Rosso’s 2011 Best Label Award.