It was 1996 and grape plantings statewide were increasing a lot slower than the long-term market needed. A shortage of grapes — and thus wine — was evidently on the horizon, a fact most wine people saw looming.
There were several causes:
— Consumer sales were rising. Chardonnay still represented one bottle of every four sold in this country, but Baby Boomers, the largest buying group, showed little interest in grapes outside the commonplace.
— Merlot sales were brisk after the late-1991 “60 Minutes” report The French Paradox spoke of red wine’s heart benefits.
— Cabernet Sauvignon prices were still fair and the “new” category of fine red wine, Meritage, a Cabernet offshoot, had created more interest in the upper-echelon Cab market.
— Zinfandel lovers adored their favorite variety regardless of the styles in which they were made.
— Many so-called Fighting Varietals, a competitive lower-priced niche, were still selling for $10 for three bottles.
By late 1996, it all began to change. It was clear that demand was rising rapidly and U.S. companies began scrambling to get grapes from almost anywhere they were growing.
Chardonnay was still so in-demand that it was being planted in hot areas (such as Bakersfield). The wine shortage prompted many large U.S. wine companies to seek out lower-priced varietal wines for their lower-priced brands from overseas suppliers.
By 1997, the country was awash in wines from Chile, Argentina, Spain, Australia, Brazil, the south of France, Italy, and even places like Moldova, some of it shipped here in bulk, in sea-going containers, to be bottled here.
Some of it even went into multi-liter, bag-in-box packaging.
(South Africa began to export wine here after apartheid ended in 1994. Nelson Mandela was freed in early 1990 after decades in prison.)
The huge importation of cheaper wines had two major consequences here. One was short-term: how would the U.S. wine industry deal with the inevitable surplus of such wines when U.S. farmers did what they always do in austere times: they over-corrected by planting a lot more vineyards than eventually would be needed?
Second, Americans soon realized they liked some of the imported value wines they had discovered. Some continued to be regular buyers of imports and didn’t return to U.S.-made versions.
Wines from South America and Australia in particular benefited from the good-value reputations they had developed here as a result of the U.S. shortage of wine.
The changes we’ve seen here since the 1996-2004 imbalance are, in my view, cataclysmic. Some of the consequences of that shortage are still with us in various forms.
Today’s “adult beverage” market, driven largely by millennial buyers with their eclectic interests in many different types of beverages, has roiled the market in unpredictable ways. Wine is still popular with U.S. consumers, but it’s being challenged by many other beverages.
The wine market itself has fragmented in terms of variety. More consumers now are interested in wines like Barbera, Pinot Gris, Grüner Veltliner, Primitivo, dry Riesling, rosé, Tannat plus cold-climate reds, New Zealand Sauvignon Blancs, and a dozen more.
Overall, however, case sales of all wines have declined slightly recently because consumers now have so many other choices, not all of them containing alcohol.
There is now consumer interest in some exotic craft beers (sours, flavored); flavored and alcohol-free cocktails; specialty coffee drinks; “hard” beverages such as lemonade and ciders; specially aged brandies; exotic tequilas; sherry-cask aged whiskies.
All this competition from segments unrelated to wine has made the wine marketplace an obstacle course that has created major headaches for wine marketers. Wholesale companies formerly worked on substantial markups. Today, all profit margins have shrunk, benefiting savvy consumers – if they do their homework.
Many wines that regularly have sold for $30 to $40 in the last few years now are being seen at $23-$25, and deep discounters (called “bombers”) are selling these same wines for less than $20.
Internet sales and other direct-to-consumer strategies now compete for dollars once found solely inside the three-tier wine distribution system. Profits in all sectors of the industry are down and vintages are backing up in warehouses to the detriment of wineries’ images.
Meanwhile, consumers are benefiting from slightly better wines than in the last two decades! This is a direct result of the wine glut.
Right now, pink wines from last year’s harvest (2019) would normally be hitting store shelves now. But I did a quick survey of California wine shops last week and found that just three or four 2019 rosé have been released thus far.
One Southern California retailer, who asked to remain anonymous, said he had yet to sell all of his 2017 dry rosés (!) and he was dropping his prices on those wines to get rid of them. He had no 2019s yet.
The real benefit to consumers is that many wines are not being sold into the marketplace as quickly as in recent years, and this is a great advantage for consumers. The reason is simply that over the last decade or two, far too many wines have been rushed to market without the time they needed to integrate their aromas and flavors.
Many were still awkward and were released far earlier than was optimum.
Wine is a living product. Soon after fermentations end, most projects can be called wine, but in most cases, much of it is little more than alcoholic grape juice. Holding it at the winery until prior vintages sell helps many wines develop.
Most such held-back wines take on secondary, or even tertiary, characteristics that benefit consumers in more complexity, depth, and personality. Even rosé wines that are typically consumed very young are better for a little extra time before being shipped to market.
The wine glut is now forecast to be with us for at least two more years, so many wines won’t be shipped until they are in much better condition to be evaluated.
Moreover, in times of grape shortages, many wineries make use of Grade B fruit. Today, with such a huge surplus of grapes and wine, winemakers can be choosy and eschew mediocre options. They can use better-quality fruit for all wines.
It’s true that many dark red wines are already being shipped to market from the 2017 vintage. This isn’t even 2½ from the vintage. That’s far too soon for the wines to be properly evaluated. Decades ago, Napa Valley Cabernet producers would wait four full years (or more) before releasing their “regular” Cabs, and would wait nearly five for their reserves.
Today, if you shop around, you’ll still be able to buy many red wines from the excellent 2016, 2015, and even 2014 vintages. All will be in better shape than those same wines showed years ago as infants.
Wine of the Week: 2018 Sonoma-Cutrer Rosé of Pinot Noir, Russian River Valley ($25): This striking pink wine has the classic strawberry/watermelon aroma of the grape variety, and it’s a bit like a traditional French vin gris, but with hints of a fine blanc de noirs, with faint brioche notes. The wine is dry, but its mid-palate is slightly richer than “bone dry,” so there is a very light succulence in the mid-palate. And the finish is dry. The 2019 is just out, but this year-earlier version has the benefit of a bit more red-wine personality. It is often seen discounted to about $20.
Dan Berger lives in Sonoma County, where he publishes “Vintage Experiences,” a subscription-only wine newsletter. Write to him at firstname.lastname@example.org. He is also co-host of California Wine Country with Steve Jaxon on KSRO Radio, 1350 AM.
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