Recession: it’s not the end of the world
To hear it the other day from Asimov, at The Pour, California’s wine industry is on its last legs. On Tuesday he blogged that “the effect of the recession on their businesses [is] brutal” and “anxiety is gushing forth.” Today (yesterday, as you read this) he declares that California growers, producers, distributors, retailers, brokers, equipment dealers and consultants are “anxiety-ridden,” as they see bottles and bottles of expensive wine that have “lost their glamour.”
I know times are tough, but I don’t think California wine is in a state of collapse. As I’ve noted in the past, history tends to repeat itself, and you have to look no further than Bordeaux to understand how that venerable old wine region has sustained itself through centuries of repeated wars, economic collapses and even revolutionary changes in France’s government. Most wines did not go away, they simply adjusted their prices in bad times and jacked them up again when boom times returned. A surprisingly low number of chateaux actually went out of existence; just look at the 1855 Classification, which contains most of the names we know today.
Every wine region is in a state of turmoil now, and California is clearly no exception. But let’s not lose sight of the silver lining around the clouds. Producers of lower-priced wines are doing fine, and by that I mean everybody from Fred Franzia and Gallo (at their value levels) to some mom-and-pop operations. We haven’t seen any massive bankruptcies or sales; certainly it’s no worse, so far, than in the early 1990s, when similar gloomy predictions were being made. Winemaker passion hasn’t waned, nor have the improvements that have been invested in vineyards and wineries over the past years, made possible by the Golden Age of profitability that marked most of the Clinton and Bush years. Wineries will get through this difficult period — most of them, anyway — just as you and I will, by ratcheting down expenses, renegotiating loan agreements, and the like. It’s a terrible recession, but it’s not the end of the world.
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I’ll be gone all next week. Going to New York for Wine Enthusiast’s annual summer editorial meeting, when we plan out the next year’s issue, and also put our heads together trying to figure out how to make the magazine better and more satisfying for readers. I’ll try to blog from the road but it’s not easy, as we’re kept pretty busy all day in meetings and with dinners (and lots of good wine) at night.
Have a great week!