California grape glut creates cheaper wine prices
Wine prices are expected to fall to the lowest prices in five years
Wine aficionados get ready to raise your glasses.
Thanks to a surplus of California grapes and declining demand, wine bills are getting cheaper and are expected to fall to the lowest price in five years, according to a new state of the wine industry report by Silicon Valley Bank.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Even though wine consumption in the U.S. declined for the first time in 25 years, according to a report from industry group IWSR, some in the wine industry believe lasting change can be good.
WINE PRICES SLATED TO DWINDLE OVER EXCESS GRAPE SUPPLY, EXPERTS SAY
Andrew Murray Vineyards Owner, Andrew Murray, told FOX Business’ Robert Gray that lower wine prices aren’t leaving a bitter taste in his mouth.
“When wine becomes more affordable it becomes more competitive with all of its competitors which is spirits… [and] hard seltzer now marijuana which is legal in California,” he said. “So wine being more affordable, I think that’s a great thing.”
Murray and other winemakers believe they can maybe entice more millennials, especially at lower price points.
WHY MILLENNIALS ARE DRINKING LESS BEER AND SIPPING MORE WINE, SPIRITS
To offset the losses as their profit margins get pressed, winemakers in some of the private label brands are selling their vino on the secondary markets or in bulk.
And estates, like Murray Vineyards, are picking fewer grapes, which means consumers are getting better quality grapes at the same price point.
CLICK HERE TO READ MORE ON FOX BUSINESS
FOX Business' Robert Gray contributed to this report.