Wednesday, September 30, 2009

Grape and Wine Glut!

Check out this article on msnbc. As one might expect in a recession, there is a widening excess of grapes and wine.

It is made worse by the rapid influx of newbies to the business. Here in Oregon, we've seen hundreds of Californians sell their homes in the Golden State for a small fortune, and then they use the cash by moving to Oregon and opening a vineyard/winery. Others, like me, plant small vineyards and dream of planting commercial vines. This is fine, so long as the demand can meet the supply. But Oregon Pinots have always been priced high (some say, too high), and there are more and more wines elsewhere in the US and the world (even Pinots, say, from New Zealand or CA) that provide similarly high quality for less cost. The Willamette Valley's continued success will depend on the stability of the luxury market demand. It's nice when you serve the rich, so long as they keep buying. So long as they keep rich.
We may see an increase in winery failures. We are already seeing reductions in grape sale prices, and land prices.

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