It is a great time for wine coinsurers, but not for the wineries or distributors.
“Over the past 20 year wine production has increased exponentially, but consumption has not kept up,” explained Gene Todaro, owner of Marcello’s Wine Market in Baton Rouge.
This has created an excess of wine on the market. Todaro said the industry was “already headed for a glut, but the recession has made it worse.”
He explained that many of the wineries are folding. They have based selling their wine and producing a profit on a certain price. Now the wineries are not able to sell their wine at the prices they wish to sell it. They must sell it for less. Then the distributors come in to play because they have “warehouses full of wine they agreed to buy on old sales projections,” said Todaro.
All of this combined creates a backlog of wine and a good buying market for consumers. The consumers are able to get the deals on wine because the wineries and distributors must get rid of their excess supply.
“The theory that people drink more in a recession holds true. But people are buying less expensive wine or switching to spirits,” said Todaro. He explained that people come in [to his store] looking for deals. Even though people in search of the deals often find them, there has actually been a 30 percent drop in sales. “If the consumer is thinking there’s going to be a deal they’ll hold off for the deal,” Todaro elaborated.
There are plenty of deals that can be found right now around Baton Rouge. For example, bottles that were once selling for $30 are now selling for $10, according to Josh Allen, a sales representative at Marcello’s. This is because Louisiana retailers and wine bars have available and are stocking more mid-to-high grade wines than ever. Other states have experienced a harder hit from the recession causing less of a demand for these wines, even at good prices.
In addition, many wine shops have specials, like three bottles for $10 or savings for buying by the case, to encourage consumers to purchase more. Wine bars are often hold tastings free or set price for all-you-can-drink. Half-off bottle nights are also a regular occurrence at local wine.
Kyle Price, a local wine enthusiast, said he takes full advantage of all of the deals and specials on wine in the area, but still sticks with what he knows and likes. “People will judge wine by its price, but I don’t think that’s the best way to determine what is good,” commented Price, “However, if it’s a wine I’ve tried and know I like I will pay more.”
Todaro explained that he believes the wine market will eventually settle out. “It will correct itself once capacity is brought to a halt in about five years when enough wineries are out of business.”
Price explained in an airy tone, “You can be a wine lover or a wine snob. I just prefer to be a wine lover and drink whatever I can!”
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