Looking into a Crystal Ball
Every year, pundits proclaim on the future of wine. Now it's my turn.
I’ve seen the future of wine buying in America. There will be more imported wine and less domestic wine (especially inexpensive California wine). Consumers will be willing to spend a little more on a bottle. Or at least wine producers hope so.
I gazed into this crystal ball courtesy of Rob McMillan, executive vice president and founder of the wine division at Silicon Valley Bank, lender to the California wine industry. Every year, he conjures the future and cracks a few jokes in his wine industry report. This year, the report reminds us that wine is an agricultural product, not just a consumer basket of brands, store shelves and marketing.
Keys to our changing purchasing patterns are the weather and the lack of many new vineyards in California. Small harvests there have led to a shortage of grapes and wine. The discounted inventories that built up in the deepest years of the recession have already gone into our glasses.
In April, Dave Whitmer, the Napa County agriculture commissioner, reported that in 2011, grape yields were down 10.5% from 2010. Statewide, every variety except Syrah and Merlot has been affected. Domestically, the bright spots are Oregon and Washington, where new acreage is available and not as expensive as in California.
“The consumer now has to decide whether they like a better quality wine, or they like a cheaper price,” says McMillan. “That’s going to feel like whiplash to the consumer.”
Another likely result is that the shortfall in domestic production will be made up by imported wine. McMillan believes that European countries, with their weakening Euro, are well positioned to fill the gap and the glass. He cites France, Italy, Spain and Portugal as the countries most likely to benefit.
Personally, I’m very happy with this scenario. Wines from these countries obviously have a place at my table. I remind you in nearly every issue of Wine Enthusiast that many European imports are food friendly and represent great value.
I can also tell you that while California producers (I’m talking about those brands labeled with the broad California designation) can manipulate their blends, it’s harder for most European producers to do the same.
An Alsace Pinot Blanc can only be from Alsace and Pinot Blanc. Selling at $14 a bottle, its quality can only change with the vintage, not by adding cheaper wine from some other place. This sort of fraud in the early 1900s is why there is such a strict appellation system in Europe.
The USDA’s 2011 annual GAIN report for wine in the European Union was released a month before McMillan’s report. The U.S. is already the leading export market for the 27 E.U. countries and is on a record-breaking upward trend. Nearly one in four bottles exported from the E.U. goes to the U.S.
As sales shift to even more imported wines, they are likely to further entrench the U.S. as the largest wine market in the world. A 7%–11% increase in wine sales is forecast for 2012, according to a report by Silicon Valley Bank.
Based on all these predictions, here is my crystal ball.
If American consumers’ tastes are anything like my own, we’ll enjoy Provence rosés while watching the Summer Olympics held in London, along with a glass or two of those crazily, deliciously refreshing Austrian Grüners and Alsace Muscats. With barbecue: a hearty Portuguese red, Spanish Tempranillo or Grenache in any form.
As the days shorten, so the reds become more serious. Italy will be represented, of course, but also Pinot Noir from Burgundy and, for value, beefy reds from Languedoc and the unsung value of inexpensive Bordeaux.
Running like a leitmotif will be sparkling wine. Whether Champagne or Crémant from Burgundy, the Loire or Alsace, Italian Prosecco or Cava from Spain, there is, to paraphrase Madame Bollinger, no time when a few bubbles aren’t welcome.
What I do believe is that we need to be willing to come out of our comfort zone of wine drinking. Brands can be useful bedrocks when there is the slightest doubt. But they should never be the only possibility. And, with its wide range of wines, Europe is the place for new experiences.
So, as Europe’s currency creaks and we balance vacations, elections and simple reality, my final prediction is that my choices—or at least some of them—will be your choices. That’s the future, 2012.