Consumers are expected to opt for less expensive import wines in the coming years to avoid paying more for domestic wines, whose prices are expected to increase because of grape shortages, according to Wines & Vines.
Silicon Valley Bank’s "Annual State of the Wine Industry Report," released Tuesday, forecasts the decreasing value of the euro relative to the dollar to bring prices of imported wines down, giving consumers cheaper alternatives to domestic wines, according to the article.
Despite the anticipated shift from domestic wines to imported wines, Rob McMillan, founder of Silicon Valley Bank’s wine division, told Wines & Vines that he expects the domestic wine industry to grow 7 percent to 11 percent, a slight decrease from 2011. About 35 percent of the wineries surveyed said they would raise prices "minimally," while 30 percent do not plan to change their prices.
From Wines & Vines:
"Tony Correia, an agricultural property valuation expert, and Paul Mabray, chief strategy officer with VinTank, joined McMillan as speakers during the webinar.
Correia said grape prices and land costs would continue to increase. He noted there’s already some tension between growers looking for the best price in a short market and wineries who are still unable to raise their bottle prices to pre-recession levels.
Based on Silicon Valley Bank’s research, wineries of all sizes are planning to buy more grapes and pay more as well. Correia said Napa Valley cabernet sauvignon continues to lead with an average cost of nearly $5,000 per ton and high-end grapes going for $8,000 or more to the ‘quite frankly absurd’ price of $50,000 per ton."
— Wayne Stainrook, Snooth