The so-called greatest wine buying opportunity in decades

Wine — By KF Louis on April 16, 2010 at 2:26 pm

I mostly despise recessions. We get too grumpy as a whole.

But isn’t the recession supposed to be over?  Not if you talk to wine pushers.  Adler’s recent post in Vinography provides the most dire viewpoint yet about the current wine inventory problem, especially among smaller and leveraged producers.  While the State of the Wine Industry Report (2010-11) more moderate, Adler’s piece boils down to this:  California (and the wine world at large) is in for an epic crash.  Lots of smaller, leveraged new wineries won’t survive.  Meanwhile, there is too much inventory from big players in the warehouses that won’t be sold before a nasty chain reaction occurs.

No matter how widespread this crash will become, I do believe that the next 12-18 months will be the best buying opportunity in years.  Inventory gluts benefit the buyer with cash.

Case in point:  I just received an email offering 2005 Mondavi Private Reserve Cabernet at $61 a bottle, down from$100-ish original MSRP.   While I don’t think many of us are going to hit that, it’s a harbinger.  It tells us that one of the top-branded American wineries cannot sell its reserve wine, and is not willing to wait out the recession.   And distributors don’t want to pile up the Mondavi in their warehouses either — right now, even premium inventory is a ticking time bomb, and is likely to be worth less than yesterday for some time to come.  And that’s why there’s an explosion of wine deal sites like Gary Vaynerchuk’s Cinderella Wine or Vindelux.

Another case in point:  A month ago, I found one of my favorite top-end Cotes du Rhones for 50% off the 2005 and 2006 vintages.  The retailer told me the reason is due to the recession being in full force.  And  meanwhile, the near-perfect 2007 Southern Rhone vintage is coming to market, and they assume that customers will simply skip 05 and 06. (Lucky me!  I like these more than 07 so far.)

So, how should you ‘play’ this recession as a wine buyer?  You do have a strategy, don’t you?

If not, don’t worry.  That’s what wine geeks like me are for.  I’ll be writing on this topic often in the coming months, giving you my basic strategy and highlighting the wine regions that are putting up the best deals.

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