It doesn't seem unlikely that the American economy will see another 1.5 million jobs lost between November and February.
Ten percent unemployment by late 2009 isn't a fantasy.
Credit is about as easy to come by as a California-made Albarino.
I'm betting that 2009 will be the first time since 1992 that total gallons of wine consumed in America will decrease from the year before. And it won't be a small drop in consumption, either.
So, what's a new, tastingroom-less producer of 500 cases of $60 California Cabernet Sauvignon to do? Seems to me there is a choice to be made by these folks: Sit on your inventory and wait and hope Americans develop an attraction for older Cabernet. Or, lower your price. Typically, it is believe that it's much easier to lower your price on a wine than to bring it back up to what it was before you lowered it.
I've been in the wine industry for almost 20 years. I've never seen worse prospects than I see today for the American wine market. Ironically, I'm guessing that's going to put me, Wark Communications, and others of my ilk in demand.
Face it, if you're selling wine at $25 or above and if you don't do enough volume to produce a mass marketing budget, you better be prepared to get nimble and strategic. You better get ready to target your marketing dollars. You better be prepared to identify market opportunities and market segments and grab them. You better be prepared to tell a much more compelling story to buyers than the next guy. Because...it's going to get very, very ugly.
The value of wine brands and wine properties in the U.S. is dropping as I type this. And the drop isn't near the bottom. We'll see lots of very well regarded wine brands change hands next year...if we are lucky. If we are not lucky, we'll just see them fade away into bankruptcy.
The point is this: If you work in the wine business as a producer, retailer, distributor or if you provide the producers and marketers with accessories, equipment or services, you better get your house in order if you want to stay in this business.
