I just finished reading in the St. Helena Star the article “More Wine Unsold During the Economic Slump.” There were two points in the article that really stood out for me. Long-time winemaker and owner Mike Grgich stated that his sales are down 30 percent this year in California and 50 percent for out-of-state sales. Most wine owners don’t like to admit how bad things are. Whenever I have asked about wine sales, I get the usual runaround: “It’s slow but we are holding our own because of our loyal customers.” I’m sure Mike Grgich has lots of loyal customers but not all of them are working right now. The second and most telling point of the article is some of the advice out there to the Napa wineries to hold prices, and forget the discounts. Napa has an image to uphold. Hello to Napa, things have changed. This is a different recession and a totally different global wine community.
California is at a 12.5 percent unemployment rate, the highest since 1940, something Napa wineries have never experienced. Another stat that is important and seldom considered is the number of workers whose hours have but cut. They don’t show up in the unemployment stats, but these workers are surely cutting costs and looking for bargains.
California and Napa Valley wineries have another factor that might be bigger than the recession, the competition from Argentina, Chile, and Spain with their quality wines at reasonable prices. Just take a look at the current issue of the Wine Spectator with articles about wines from Spain and Argentina. The number of wines from these countries rated between 88 to 90 points and under $20 is astonishing. No, these are not Cabernets, but when people are out of work or working less, many will settle for a $15 wine that gives a lot of bang for the buck. Why would one out of work buy a bottle of 90-point Napa Valley wine at $45 when they can buy three bottles of 90-point wine for $45?
(W.S. 90 points – 2006 Juan Gil from Spain $11.50 at my local warehouse store).
I know this is very tough on the smaller wineries that need to sell their wines at a certain price just to break even. But what choices do they really have if there are not enough buyers of wines for over $20 bottles of wine.
Now, getting back to the title of this post, Black Friday in Wine Country. This is a way to save that Napa Valley image and sell some wine. On the Friday after Thanksgiving many people travel to the wine country. It is the last hurrah for the wine travel season. Tasting rooms are not going to see foot traffic like this until Valentine’s Day. I say open up the warehouse and have a giant Black Friday sale just like Nordstrom’s and Bloomingdales do. People will carry out cases of wine and will just think this is part of the Black Friday concept. Then, of course, wineries can always extend the sale on the Websites through the holiday season.
To all of you out there who are living in Northern California or just visiting, set out on Friday with your turkey sandwiches and have a picnic in wine country. Forget the stress and tension of the shopping malls and find solitude and beauty in wine country. Just maybe, some of the very smart wineries will offer you some unbelievable sale prices.
Please comment if you are a winery and will have a Black Friday sale or have any information on big wine sales in wine country. Happy Thanksgiving to all!