Catastrophe And Opportunity Are Two Sides Of The Same Coin
The topic of the pandemic's impact on the wine industry hasn't garnered much attention on these pages, but back in March and April I prognosticated to family, friends and neighbors that the end of summer would begin to provide some unique opportunities for wine buyers.
This morning an email hit my inbox offering a single vineyard Russian River Valley pinot noir for $20. The wine, from a respected producer in what is perhaps California's most revered region for pinot, normally retails for $50+. How is this possible? Covid. That email is but one piece of evidence that my prediction is now coming true. In a post about buying wine online back in April, the following paragraph touched on the underlying reasons:
Grocery store wine sales are up more than 30%, which means that large producers (who are able to get placement at large grocers) and the distributors which represent them are enjoying sales increases. But this comes at the expense of non-grocery retailers, producers, and the distributors which represent them - adding insult to the trade war tariffs that were already debilitating imports. Though the big guys will fare just fine, there will be many casualties in the wine industry, most of them small-medium sized.
Equally important: restaurants. They are nowhere close to being back to where they were pre-pandemic when they had accounted for approximately 30% of wine sales. The other thing about restaurant wine (or what the industry refers to as "on premise"): to prevent comparison shopping and cultivate a more unique experience, restaurants generally prefer to stack their lists with wines you won't find at the grocery store - or even your local wine shop. This means a strong tilt towards smaller producers, many of which are suffering the consequences.
When distributors don't have a market to move new product to, they order less (or not at all), leaving the producers with excess inventory and a need for fast cash. Some of these folks turn to flash sale operations (like WTSO or Last Bottle,) while others prefer to preserve brand equity and sell their wine in bulk to someone who will slap a different label on it like Cameron Hughes and his new venture, covered here last month.
The proliferation of these offers does not mean we are awash in nothing but stupid-good deals. Some of what I've seen hit my radar is overpriced or just deeply-discounted cat pee, so buyers still need to be aware. But there's a reason why there are four cases of wine on their way to my doorstep right now. There are some screaming deals to be had if you are patient, know where to look, and can separate the signal from the noise.