“Best Wine Retail Values in 20 Years”: Wine Prices Projected to Hit 5-Year Lows

2020 might be the best time in years for consumers to buy wine. The industry’s supply demand mismatch is getting further exacerbated, causing industry experts to predict wine prices will fall their lowest level in 5-years in 2020. This should create an attractive buying market for consumers as higher quality wines become cheaper.

Worsening industry demand trends over the last few years have led to a greater supply demand imbalance. Napa vineyards are currently experiencing an oversupply of grapes due to an increase in vines planted years ago and better harvesting technology.

The demand side of the market, however, has not kept up. Wine consumption dropped for the first time in 25 years in 2019 as spirits and hard seltzer continue to grow, according to source IWSR. Sales from the “ready-to-drink” category (e.g., hard seltzer) grew a mind-boggling 50% last year, primarily driven by millennials, which negatively impacted wine (and beer) consumption. This declining consumption has primarily been driven by poor performance of “cheap” wine (<$9.99 a bottle) and a slowing growth rate in “premium” wine (>$10). This trend is projected to continue for the next few years suggesting little relief is in sight:

These trends have led Rob McMillan, author of Silicon Valley Bank’s annual “State of the Wine Industry Report”, to predict in his latest report that 2020 will represent “the best wine retail value in 20 years.” If you were ever waiting for an excuse to buy more wine, now is the time.

Sources:

“State of the US Wine Industry 2020”. Rob McMillan, Silicon Valley Bank

“The Price of Wine is Dropping Fast.” Cnn.com (February 17, 2020). https://www.cnn.com/2020/02/16/business/grape-surplus-cheap-wine-trnd/index.html

“American’s Wine Consumption Dropped for the First Time in 25 Years.” Cnn.com (January 15, 2020). https://www.cnn.com/2020/01/14/business/alcohol-consumption-iwsr-report/index.html