Why Wine is becoming ever so expensive… Or is it?
Markets, Markets, and more Markets:
The year 2009 proved to be a miraculous and flawless vintage for many Burgundy and Bordeaux vineyards as a perfect mixture of sunny, cloudy, and rainy days yielded perfect atmospheric conditions contributing to the overall success of these world renowned wines. These circumstances were predicted to be ever so distant for at least another sixty years. Oh, but they were wrong. Viticulture specialists, farmers and wine salesmen alike were all dumbfounded and taken by surprise when the 2010 vintage replicated and nearly outscored the “perfect” and “flawless” vintage of 2009 forcing many to double up on their espresso intake to make sure they were reading the situation correctly. As the harvest season of 2010 came to an end, many wine salesman felt the need to apologize to those whom they sold the “perfect 2009” vintage to. But, instead of taking flak for the false statement that a perfect wine would not be available for the next sixty years, the salesmen were welcomed with open pocketbooks and joyful smiles as profits began to roll with higher figures and more intrigued buyers. From 2009 to 2010 the price of Bordeaux increased by a stunning fifty percent, and nobody really knew who or what to blame this rise on except for the fact that Bordeaux had essentially “doubled down” on their high stakes blackjack hand and threw their ace and jack out on the table with excitement. Essentially, the Bordeaux industry saw the profit margin for the 2009 vintage and took a bet to increase that margin and were astonishingly welcomed with little fuss over the price hike. But, one piece was still missing from the equation; who was buying the majority of the wine? The French? The English? Certainly not the Americans. Then who? And then, one word from the far east was heard and it uttered “紅酒” (wine).
China’s Wine Renaissance:
No doubt that China had already had their hand in the cookie jar years before these two miraculous vintages surged from underneath, but no one comprehended China’s ever growing obsession for the mystical red fruit of the west. One must understand that the wealthy Chinese have an aching for western products. For example, if you have ever been to china you would have identified the absurd amount of KFC’s found on virtually every street corner and market with people as numerous as the stars lined out the doors for their mid-day snacks and lunches. It wasn’t before long when they would do the same with French wines and host some of the largest wine exchanges in the world and boast some of the largest private collections in the world as well. Now for the final piece of the puzzle; China is home to the largest nation by population but what about the wealth? Many describe China’s wealth as an iceberg with a small amount of the nation’s private wealth visible at the tip, but the overall wealth is accounted for with the remaining eighty percent sunken beneath the visible surface. So of course China has the funds and means to purchase the majority of these “price hiked” vintages. And with a happy premium buyer, the French became very happy salesmen. The Chinese’s demand and obsession for western items has been witnessed to the extent of Chinese billionaires purchasing French estates and shipping them piece by piece only to rebuild them back home in their backyards. With all of this foreign money buying up the majority of the French market, what are the middle class Americans to do?
Millennials and the vice of wine:
While all this conundrum was occurring overseas many back home in the good ‘ole USA did not wish nor did many have the means to shell out a couple thousand dollars for some French wine, thus causing the gaze of many to fall upon California. But, one group in particular was on the rise, a breed known as the millennials. These people are responsible for the “mid-market” price hikes of recent. I remember back in 2013 walking into a wine store with wishes and hopes to purchase my father a fairly good Rhone. My budget was forty dollars and thus I picked out a 2012 E. Guigal Rhône ( Guigal Côte Rôtie Brune et Blonde 2012) for $35. Over a short span of five years that bottle is now trending around the seventy dollar mark; simply astounding if you ask me. Let’s remember back to 2010, markets surged and left many without “good wine.” Now stop and think, the year 2010 was also coincidentally the year that millennials based in the United States began to turn twenty one (United States drinking age) and were left without “good wine,” thus opening the floodgates of California. No doubt that California has always been home to great surfing, food, and of course wine, but the “millennial movement” gave Napa, Sonoma, and other like regions the chance to shine brightly for the first time since the age of Mondavi. In the opinion of this writer, California has always been home to fantastic wines which are often underpriced (with a few overpriced vintage and producers) but many people (i.e. the millennials) are now coming to recognize California’s true value thus giving producers the green light for full thrusters toward an ever so growing price cap seemingly as far away as pluto but nonetheless approaching the distant destination at an alarming rate and might just shoot right past it in hopes to join the next solar system. And don’t even get me started on the finger lakes of upstate New York whose journey is just beginning.
What Next?:
So, what are we all to do now? Rising prices in the United States are now beginning to deter those who started here in the first place in hopes of finding a “wine haven” in which they could always drink “good wine” at fair prices. But, that dream is quickly coming to a close as the United States is realizing it’s own potential as well as gaining traction abroad. Perhaps the only hopeful region for millennials to find “hiked-price haven” is the finger lakes, but that in itself is a whole new can of worms. So for now, all the world can do is drink wine and cry out “À votre santé” to each other with fine wines grasped with caviar slimmed fingertips and sing into the night hoping for another “flawless” vintage… and of course, only time will tell of that wonder in another distant land.
Au Revoir
Ryan W. Sheldon
