Grape news! Price of wine to fall to its lowest level in five years due to Californian vineyard surplus
- A surplus of California grapes, combined with decreased demand, is expected to cause prices to drop to their lowest level in five years
- The decrease in demand is being attributed to a preference for liquor and ready-to-drink cocktails
- In 2016 vineyards in Northern California began using more efficient harvesting methods, leading to more grapes
A surplus of California grapes is giving wine lovers another reason to celebrate.
That’s because experts are predicting the overabundance of grapes, combined with decreased demand, will cause wines prices to plummet to their lowest level in five years.
Even better for wine lovers, the decreased prices are expected to last into the near future.
A surplus of California grapes, combined with decreased demand, is expected to cause wine prices to drop to their lowest level in five years
Experts say one reason for the decline in demand is more Americans appear to be turning their appetites to liquor and ready-to-drink cocktails.
Experts say one reason for the decline in demand is more Americans appear to be turning their appetites to liquor and ready-to-drink cocktails.
Additionally, millennials have yet to acquire the same taste for wine as previous generations.
What’s leading to the surplus?
In 2016 vineyards in Northern California began using more efficient harvesting methods to plant thousands of acres of new vines.
While having more grapes may sound like a good thing, it hasn’t worked out that way since demand is down.
In 2016 vineyards in Northern California began using more efficient harvesting methods to plant thousands of acres of new vines
According to Jeff Bitter, president of Allied Grape Growers, the surplus may make it to the secondary market, where they’ll be used for brandy or grape concentrate.
However, that market doesn’t usually translate into sustainable returns for growers.
Bitter told CNN, ‘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.’
To rectify the situation, California growers are going to have to cut back on producing acres of vines.
Even then one expert predicts it will take two to three years for prices to stabilize.