| The general consensus at the recently concluded annual convention, 'Unified Wine and Grape Symposium' in Sacramento, California was that the wine glut plaguing the US wine industry for the last 6 years was waning, reports sacbee.com. 'We're emerging from excess', said bulk wine broker Bill Turrentine, speaking during a panel discussion on the state of the wine business.
The shrinking surplus marks a recovery from a wave of vineyard overplanting in the late 1990s, Turrentine told a full house in the 1,300-seat ballroom at the Hyatt Regency Sacramento. The overplanting was driven by the era's scarce wine supplies and high prices -- as well as the excess cash and general exuberance that accompanied the internet bubble. Since then, many vineyards have been ripped out, and consumption has risen steadily, drawing down the surplus.
For U.S. consumers, who bought a record 300 million cases of wine in 2006, the tightening supply signals a likely increase in prices, but not very steep. The last few years have seen a dramatic globalization of the U.S. wine market. Imported wines, especially lower-priced brands from Australia and Chile, now make up a record 29.4 percent of the market, and the competition is increasing. In addition, the world's leading wine producers, France and Italy, face plummeting sales at home. This has led to a grave oversupply and consequent softening of prices.
Consultant and marketing analyst Jon Fredrikson's was very bullish on wines at the Symposium. As wine becomes increasingly mainstream, and as new health benefits continue to be announced, he sees a continued growth in overall U.S. sales.
An interesting obseration was that 'As a rule, the more expensive the wine, the more popular it is'. Sales of bottles over $15 rose 27 percent last year. So-called "extreme value" wines -- those less than $3 -- are struggling. Supermarket sales in that category fell 3 percent last year, while sales at virtually all other price levels rose.
Inviting packaging and non-traditional names, which break down intimidating barriers also helped to increase sales. Screwcaps have also played a major role with screw-capped wine sales increasing nearly 25% in 2006, according to research by market analysts AC Nielsen.
( It may be interesting to note that this trend has been taking shape in India too and is expected to be followed in the coming times-editor)
For more details, visit http://www.sacbee.com |
