We all hear it these days. You work in the trade and there’s a constant refrain of consumers trading down in their wine purchases, especially at restaurants. The silver lining is that people aren’t abandoning wine altogether, they’re just spending less. Which makes sense: Wine prices were until recently ever so inflated. When things eventually settle down, look for more savvy consumers — people on the hunt for honest wines at fair prices.
Which leads me to a recent article in what’s left of the Los Angeles Times, by my friend and colleague Patrick Comiskey. Patrick’s report shows some of the challenges sommeliers and buyers face in today’s climate. The meat of the article I feel, hits at the oversupply in the distribution channels, especially at the high end:
Indeed, slower restaurant sales (nationwide, but especially in Las Vegas) coupled with a generally large vintage in 2005 and the huge proliferation of luxury brands from California and elsewhere have led to an unprecedented oversupply of high-end wine in the pipeline.
All of this has led to plenty of synergy between buyers and sellers. “Everyone got the memo,” says Eduardo Porto-Carreiro, the wine buyer at Grace. “The producers, they lower their prices and say to the distributors, ‘Here are the deals.’ The distributors go to the restaurants and say, ‘Here’s what I can do if you move this,’ and we pass it on to our customers. It’s trickle-down, but it works back up. Wineries need to move wine, distributors need cash flow. Everyone has to work together for it to make sense, and for now, it is.”
Go here to read the entire thing.
*Note: For a look at the downturn’s effect on the restaurant world from a server’s perspective, this post on the downspin of tipping is quite fascinating.