Today’s wine market is very volatile, so much so that there seems to be some confusion among those who report on market trends about whether or not sales are up or down for wines priced $20 and above. In my January 26 column on Syrah’s poor sales performance in the U.S. market, I mentioned the general weak state of wine sales, including Syrah, especially for those wines priced $20 or more.
So, on January 27, I was surprised to read in my local newspaper that sales were strong for wines in the $20-plus range. The article in the Santa Rosa The Press Democrat, a New York Times Co. newspaper
that reports on the California wine industry, with a particular focus on Sonoma County, reported that statistics released during the recent annual Unified Wine & Grape Symposium in Sacramento, showed “High-end wine sales dropped 6 percent starting in late 2008 for bottles costing $20 or more.” This was common knowledge to anyone tracking wines sales during that period. Not as well known was this piece of information generated by Nielsen Co. and reported during the symposium: “The fastest growing wine segment last year (2010) was high-end wine costing $20 or more, which grew by about 11 percent.”
While writing my January column, I heard this “$20 a bottle” figure from a number of winery representatives and wine merchants only a scant 10 days before the PD article was published. So, a month later, has anything changed?
Michael Traverso of Traverso’s Gourmet Foods, Wines & Liqueurs in Santa Rosa told me in January that “Any Syrah north of $20 to $25 is a tough sell.” I had asked him specifically about Syrah but Traverso included most wines. Since January, Traverso says “it has gotten better, although sales are still fragile in that price category.” He stressed that sales performance in the $20 and up price point depends on category, using Russian River Pinot Noirs as an example. “People seem to be willing to spend a little more now for some wines like high-end Pinot Noir.” But he added that for other wines like Zinfandel and Chardonnay above $20, customers seem not to be willing to trade up.
Santa Rosa is in Sonoma County wine country, so you would expect sales of local wines to be more vigorous. What about imports? Wine consultant Tim McDonald, who represents Oatley Wines from Australia 
has an interesting take on the $20 and above sales question. He says that during the reporting period covered in the Nielsen Co. sales tracking, “There was a lot of discounting in the $20 and above category, with most of the data gathered from grocery stores and supermarkets.” McDonald says he is seeing a lot of increased interest in the $15 to $25 bracket, citing Oatley Wines as the number one import brand at $15 and above in Florida, with sales rising in other major markets across the country.
Another example of how quickly things change in the wine industry, and how reports vary and often cite information that favors a specific region or industry organization, was a front page article in the February 11 The Press Democrat: “2010 (Sonoma Co.) crush cost grape growers $88 million.” According to the Sonoma County Winegrape Commission, the 2010 Sonoma County harvest was down 11% from 2009. Some areas were hit harder like Zinfandel which was off 31% in yield across the county. However, in another published report, the California Department of Food and Agriculture claimed in their Preliminary Grape Crush Report that “The 2010 wine grape harvest was much larger than previous estimates indicated.” The Grape Crush Report stated that the harvest 2010 was the third largest in California history, but made no mention of lighter 2010 grape harvest in Sonoma County.
A few days before both reports were released, Ciatti Company, a wine and grape brokerage posed these questions. “The Premium segment ($20 and more) of the Wine Industry has been hit the hardest over the last three years, so could a shorter crop bring some of the long inventories into balance in the Premium segment?” And Ciatti asked: “Consumers trading down have put pressure on bottle pricing, so could 
crop size have an effect on what Consumers will pay?” Ciatti noted that California wide Chardonnay was down 10% in 2010, Merlot, down 4.3%, Pinot Noir, off 5.9%, Sauvignon Blanc down a whopping 14.1% and Zinfandel, down 11.5%.
So it would seem, if reports from northern California are any indication, that since the holidays, things are looking up for sales of wine $20 and above. But the caution flag is still up, especially after the release of the 2010 grape crop report. Despite the impressive numbers claimed by Nielsen & Co., a more realistic picture of wine sales performance might be available from the people selling the wine and not those crunching the numbers.
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