Wine in 2011

The wine market tends to follow the broader economy, and there’s finally some good news: Things are starting to improve.

Wine sales in the U.S. have actually been growing over the past few years, believe it or not, but the conventional wisdom has been that most consumers have traded down; the bulk of the increase has occurred in the under-$12 price range. At the top end, the booming auction market has pushed collectibles into the stratosphere. For a while, our wine world tended to resemble a South American dictatorship, with wealth concentrated at the top 2% of the population and everyone else struggling to survive.

As experts assess sales data for 2010, it’s evident that the market is turning around. Sales of wine in the $20 range have increased nearly 25%, which is a very good sign. The slowest segment is still the “dead zone’ between $50-100, which will probably not recover soon.

What’s likely to occur in the year ahead?

Severe discounting of expensive wine will continue, as a multitude of California boutique wineries try to stay afloat. Many of them won’t. As the recent startups exit the stage, it will increase the tsunami of quality juice available on the open market. Look for more and more private labels, as restaurants, hotels, cruise lines and big-box retailers move in to take advantage of this situation. In the U.K., private labels now constitute 40% of wine sales.

Alternative closures will become more popular, and I don’t mean screwcaps. Increasingly, better wines are being offered in Tetra Pak and bag-in-box formats. If you think about it objectively, bag-in-box is the perfect storage and delivery system—the wine usually can’t oxidize, and the last glass is generally as fresh as the first.

If you buy wine at auction, you’re likely to revel in continuing bargains for Vintage Port and Sauternes. These dessert wines are the first to suffer and the last to recover during an economic turndown. There are likely to be ongoing price breaks for California Cabernet, Australian Shiraz and Italian Super Tuscans.

While high-end Bordeaux and Burgundy are likely to remain the quaff of the rich, the average French producer will be forced to take some steps to change their label. Look for more bottles that inform Americans what grape variety the wine is made from, rather than what region it comes from.

Will our love affair with Pinot Noir continue? Very likely, as the film “Vertical” (the sequel to “Sideways”) goes into production.



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