Friday, February 29, 2008

Wipeout

One would think that the Italians, and most of the European winemakers, would be first in line for the shoot-yourself-in-the-foot booth. The weak dollar, inflation, high cost of living and ultimately price increases, followed by an expected slow-down in sales. And then California goes long boarding and tries to ride the high wave. Yeah. OK. Now what?

These days, wineries in California are changing their dance partners with a fury once seen on the deck of the Titanic. A 48% increase in sales isn’t good enough? Let’s find another conduit for marketing our products. Lost in the aisles of hundreds of other Chardonnays? Blame someone else. Slow down in sales? It couldn’t be that old fashioned label that your Aunt Tilley designed, now, could it?

Like the weather patterns that derive off the West Coast, sometimes the storm passes to the middle lands and even further. Maybe the sub-prime miasma is to blame. And the Italians are laughing about it and dancing in the streets, in their new Prada slip-ons

The trend seems to be, or rather, the cycle we are in right now, indicates that Italians aren’t slowing down like many of the naysayers are bellowing. Yet.

February 2008 is looking to be a good month for Italian wine sales in the midsection of the United States. January was strong, and this month, as it is wrapping up, is lumbering to a finish that outpaces the same month last year (SMLY).

Not so with respect to California wine sales.

A couple of things here.

The market is crowded; there is still a lot of juice floating around looking for a final resting place. There are a few other Two-Buck imitators that have made it to the interior. And yes, at the bottom rung, it is treated like a commodity because it is in a highly competitive part of the market. This isn’t Super-Yacht territory. If folks were used to buying three bottles of wine a week for $15.99, they are now buying two bottles now for $12.99 and making do. The supply builds up into tsunami-sized waves and gets scattered across the land, often heavily discounted.

So why isn’t this happening to Italian wines? Short answer: I don’t know. Perhaps it is because the Italian wines have diversified their penetration in the market. It seems they are everywhere these days, large retailers, small independents, mama and papa restaurants and big box chains. Spread out.

This might not be for long, but right now we are riding the wave in the cycle. And so far, we haven’t been thrown from the board.






1 comment:

Marco said...

Good news for now. California is shooting itself up its Mezzogiorno for not making a $10-$12 bottle of wine that can compete with Italy, Spain, southern France, South Africa, Australia.

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