The California Wine business is currently experiencing “challenging times”. Central Valley growers in the San Joaquin Valley which represents 60% of California total grape crush are faced with excess supply on the low-end segment, lack of water, and more competition from overseas producers.
Cheaper wines from New Zealand, Australia, Chile and Argentina have created a world-wide glut. Napa Valley which produces 4% of statewide wine production but due to its premium prices represents 21% of California total crush value, saw its 2015 tonnage fall by 29% from 2014 due to unfavorable weather. The strong US dollar has impacted exports reducing them from prior years.
All news is not bad. A huge new growth area has commenced in “Wines By the Glass”. Up to 80% of restaurant/bar/hotel wine is sold by the glass. Up until recently, the wines served known as House Wines were of poor quality, picked for their “price points” not their taste. Sophisticated diners knew they were getting bad wines and did not appreciate their poor quality despite their cheap prices, thus the introduction marketing of Wines By the Glass.
In 2016 wine tasting rooms are opening everywhere. Better wines by the glass are served with “finger foods” i.e. charcuterie and cheese plates, mediterranean platters and other delectable appetizers. People now eat, drink and then drink more. Why, because the new wines are worth drinking.
The recently opened multi-million dollar Wally’s Wine Bar (offshoot of the legendary West LA wine shop) has wines by the glass up to $95 per glass. Other places offer price conscious consumers wines from $5 per glass and up. So a great range of varietals, choices and prices. The high-end wineries who have limited production prefer to sell by the bottle, so in response to 2 years of CA wine challenges are curtailing their wine activities by the glass. Emma Swain, CEO of St. Supery Estate Vineyards and Winery in Rutherford, CA, confirmed recently that in response to “two short years of production” they have not increased. Instead, St. Supery changed some of the ways they do business, including selling wine by-the-glass because of their shortage of wine.
So the race is on. California’s thousands of wineries can now get “into the game” by offering wines to be sold at a range of prices by the glass in restaurant, resorts, spas, hotels, gyms, cafes and anywhere people “like to drink their wine and enjoy their day/night”.
In San Francisco, California a start-up delivery company Vinebox (owned by Matt Dukes and Rachel Vodofsky) recently started selling wines by the glass thru a monthly subscription service. For $35 per month, its members receive a box of 3 individual vials the equivalent of 3 glasses of wine each month. The packaging comes with tasting notes and recommendations for pairing the wines with foods. Full size bottles are available for purchase on the company website.
Vinebox began in Jan 2015 to promote “good tasting wines” from all over the world with their stated goal: “We wanted to come up with a way to make really great wines more accessible and affordable without sacrificing quality.”
Others should be willing to learn from Vinebox, since the American consumers have many choices so why drink wines that do not taste good, look good, or feel good later? Instead, they prefer to drink good wines by the glass which has been proven by the recent nascent demand for wine tasting outlets. The race is on…..