Get ready wine lovers: A recent glut in the production of California wine will lead to more quality wines in new labels hitting the shelves at reduced prices.
According to a March 9 report by the Bloomberg news service, California grape growers put in thousands of acres of new vines in 2016 expecting that demand for California juice would keep up. That anticipated demand never materialized, and a record harvest in 2018 resulted in a huge oversupply of wine.
One way wineries can sell off the oversupply is to create new labels at reduced prices. This allows producers to keep prices for so-called “legacy” brands like Robert Mondavi, at their usual levels, while selling off quality wines for cheap.
“They make sure that the wineries' core products are taken care of. But in years where there’s excess juice, they go into private labels, they go into new label development,” said Happy Harry’s Bottle Shops CEO Dustin Mitzel. “They just find more outlets for that juice to be used.”
Overproduction accounts for some of the glut in wine, but another factor is reduced demand, according to Steve Olson, manager of Falls Liquor in Thief River Falls.
“Wine sales definitely slowed down last year; that we know,” Olson said. “(It’s) partially due to a lot of the new hard sparkling waters, like Truly and White Claw. That affected it a little bit, too.”
Representatives from Hugo's, which also has a large liquor store in Grand Forks, did not return a call seeking comment.
According to Mitzel at Happy Harry's, the price of wine generally increases over the years, making now an attractive time to go bargain-shopping for new labels.
“That $10 cabernet that you bought maybe 20 years ago, maybe it’s $20 today,” he said. “Well this is affording us avenues to find really good cabernets that come down in that $12, $13 or $14 range.”
Olson said distributors have been telling him much the same thing, and added that some of these new labels won’t last forever.
“All of a sudden they come up with a new wine and put it under a new label,” said Olson. “And maybe they put a different price on it and sell it, and then when it’s gone, that wine disappears.”
Wine aficionados shouldn’t worry about those new labels disappearing too soon, though – the Bloomberg report stated there is plenty of wine to go around. The supply of cabernet, for example, stood at 9 million gallons in January, nearly 2 million gallons more than last year.
The situation is such that producers in California will actually pull vines this year. The Bloomberg report notes California has an oversupply of vines to the tune of 30,000 acres, nearly 5% of the state’s total wine grape acreage.
To be sure, the glut makes now a good time to go shopping.
“It’s a win-win for consumers,” Mitzel said. “For us as a retailer, it just affords us a lot of different avenues to find fun and cool things for our customers to enjoy.”