There is some good news for wine lovers. The prices are expected to decrease.
The reason behind this is that the millennials are not embracing the taste of wine. The youth is opting for cocktails and liquor, therefore the demand for wine has seen a steep decrease and as a result, the prices might drop.
According to a report, the price of wines will see the lowest drop in five years. The drop is expected to last for over 3 years.
Rob McMillan, the writer of the annual State of Wine Industry report and the founder of Silicon Valley Bank’s Wine Division said that the consumers will have the ‘best wine retail values in 20 years.’
This kind of a drop in the demand for wine has been noticed for the first time in 25 years. With the millennials opting for other beverages, the demand and supply of wine are not finding common ground.
McMillan feels that the biggest consumers of wine should be millennials but they have not yet embraced it. He, however, feels that the price drop will help millennials shift towards wine. In the report, he said, “We aren’t engaging with the millennial consumer, and boomers who have driven wine sales for the last 30 years won’t live forever.”
He added, “Today, the wine supply chain is stuffed. This oversupply, coupled with eroding consumer demand, can only lead to discounting of finished wine, bulk wine, and grapes. US wine consumers will discover unprecedented retail value in 2020 and should buy up.”ADVERTISEMENT
This decrease in demand has also led to a surplus of grapes. The vineyards in Northern California started using an efficient harvesting method to grow more grapes in 2016 and as a result, they have a surplus of grapes but no demand.
President of the Allied Grape Growers, Jeff Bitter told CNN, “The main cause of oversupply today is the culmination of a few years of slowing wine shipment growth, with an ample 2018 wine grape crop as an exclamation point. Until 2015, wine shipments had grown, almost predictively, for two decades. The slowdown in growth has caught the industry by surprise. Since it takes up to five years to bring wine to market from the initial planning stages of planting a vineyard, it makes hitting future demand very complicated. In this case, we overshot demand.”