What Prosecco tells us about the future of wine
Prosecco, as you know, has been on a roll lately, but when you read headlines like this:
“PROSECCO OVERTAKING CHAMPAGNE AS SPARKLING WINE OF CHOICE”, you know that something far more important than the ephemeral popularity of a particular wine is happening. Why is Prosecco so hot?
Two things:
- Millennials coming of age
- The Great Recession
Concerning Millennials, they “aren’t earning as much money as their parents did when they were young,” a situation that’s even worse for Millennial women. Saddled with student debt, they’re unable to afford homes, and in general are feeling financial pressures in a way their parents (my generation) never did (at least, until the Great Recession struck). So when it comes to discretionary spending, Millennials are spending downward.
Speaking of that Great Recession, it impacted all of us. Trillions of dollars went down the drain. “The wealth of most Americans down 55% since recession,” CBS MoneyWatch headlined in 2013. We’ve made some of that back since then, but Americans of all ages still are feeling the pinch, which is why U.S. economic growth has been so sluggish.
Under the circumstance, you have to consider two things concerning sparkling wine: quality and price. Simply put, Champagne is expensive, Prosecco isn’t. The average price of a bottle of French Champagne on a restaurant wine list is $117. I couldn’t find anything online concerning the average price of Prosecco, but on Snooth, they list many Proseccos, mostly below $20 a bottle, so even if you double that for a restaurant wine list, it’s only about $40.
And qualitatively, as we all know, a good Prosecco is as satisfying as Champagne. So why would anyone choose to buy Champagne, except for image and perceptions?
For me, the issue here isn’t about Prosecco per se, it’s about the average American looking for less expensive wines than perhaps her parents used to. I was up in Napa Valley yesterday, and we were chatting about expensive wine, and how and if these pricy bottles of Napa Cab will continue to exist into the future. Someone asked me my opinion, and I replied that I’ve been wrong in my prognostications so many times in the past that I’ve basically given up on the prediction game. But still, a part of me just can’t see folks who are, say, in their twenties today spending $50 or $60 per bottle retail as they hit middle age, or spending $100-plus for a bottle in a restaurant. I just think some things in America have fundamentally changed: the Great Recession, as I said, but something else: We’ve become a more frugal country, less apt to consume conspicuously. The outrages of the super-rich have changed our sense of right and wrong; our moral compass has swung back to what it was at this country’s beginnings: living simply.
At the height of the Great Recession, there was much talk of “The New Frugality,” as for instance here and here; everyone agreed it was a reality, and the only question was whether it would continue once the Great Recession lifted. Well, the Great Recession now has lifted (the country actually hasn’t been in recession for years), but, as Forbes noted just last year, “an enduring ‘New Frugality’…has Americans of prime working age, mainly 25 to 55, spending less, working less, and buying cheaper.” That, it seems to me, is likely to mark this nation for many years to come. It’s why people are preferring Prosecco to Champagne, and why we’re likely to see a similar switch in other wine types, if it hasn’t already happened.
“And qualitatively, as we all know, a good Prosecco is as satisfying as Champagne. So why would anyone choose to buy Champagne, except for image and perceptions?”
You certainly hit the nail on the head. While I’m not a fan of Prosecco (nor generally of Cava), there are sparkling wines worth drinking from so many regions in France, at such reasonable prices. I used to feel that when it came to French sparklers there was Champagne, and then there was everything else, ranging from poor to mediocre. But the quality of non-Champagne French sparklers has improved so much. I recently spent some time in the Savoie and Jura regions, and was amazed at the quality of their sparkling wines, including some in the Savoie I had never heard of.
Price matters. It is as simple as that–although if one overlooks the advances in quality in wine all over the world, then not only does price matter but so does satisfaction.
Still, the same thing that is happening with Prosecco and lesser-known French bubblies, is happening with Bordeaux and Burgundy. The world is being priced out of those wines. It is not so long ago that wines like that were affordable–perhaps not on an everyday basis, but affordable nonetheless. I still have the last bottle of Roederer Cristal that I bought at Liquor Barn some three decades ago for under $30. Today that wine is typically well north of $200. Same for Bordeaux. I bought futures in the early ’80s of First Growth for under $50. Today, those wines are ten times as much.
Ultimately, price matters, and just as my generation woke up to wine with Blue Nun and Lancers, after graduating from Hearty Burgundy, so too, in my view, will the young generations gradually move up scale. But they will find it a lot harder to buy First Growth and tete de cuvee Champagne because those wines are out of reach for a large percentage of the wine-drinking boomers as well.
Really?
“And qualitatively, as we all know, a good Prosecco is as satisfying as Champagne.”
Some people must be drinking the wrong Champagnes.
“Americans’ Net Worth Reaches High of $84.9 Trillion”
http://www.wsj.com/articles/americans-net-worth-hits-high-of-84-9-trillion-1434038401
Prosecco retail pricing “bracket” from Wine Searcher:
http://www.wine-searcher.com/regions-prosecco
When oil was trading for $100-plus a barrel, the cost of shipping a nearly 3 pound glass bottle of wine around the world became a significant expense.
Those transportation costs became a motivating factor in the French and the Spanish making sparkling wine in California, closer to their North American customers.
(Same reason by the Japanese and German auto manufacturers opened production plants in the U.S. and Mexico: to be closer to their customers.)
There was a time when Krug and Salon Champagne were affordable.
Today, they are priced like Veblen/Giffen goods:
http://articles.latimes.com/print/2007/dec/30/image/ig-price30
The new frugality is the “new normal” . . .
From The Wall Street Journal “Main News” Section
(April 6, 2009, Page A2):
“Frugality Forged in Today’s Recession Has Potential to Outlast It”
[Link: http://www.wsj.com/articles/SB123897160787290857
[See accompanying exhibit]
By Kelly Evans
“The [Economic] Outlook” Column
As an “old” millennial (33), who has admittedly had the good fortune to be exposed to a lot of Champagne and other sparkling wines in a past career wholesaling wine, I find that the Prosecco trend is yet another example of Americans, who are just discovering wine, gravitating towards things that are sweeter. While there are decent interpretations of truly dry Prosecco, the vast majority that are available in U.S. are off-dry (aka semi-sweet). The positive side to this is that it gets more people enjoying sparkling wine in more capacities (as opposed to just reserving for celebrations), but the negative side is that most of it is excessively-carbonated plonk. Hopefully, more and more Prosecco drinkers will come into the tent and try cremants, sparkling Vouvray’s, Franciacorta’s, etc. that are often a lot more compelling for not that much more of an investment.
Note to all – this is BS and it is high time we put an end to this ignorance! “Prosecco trend is yet another example of Americans, who are just discovering wine, gravitating towards things that are sweeter.”
– French and Italians drank, and preferred SWEET wines, including sparkling wines and especially Champagne. Sec, as legally defined in Champagne, was considered DRY – at 17 to 32 g/L!! The French mocked the English for drinking drier Champagnes.
Were the French, Italians, Spanish and Germans ‘just discovering wines’ when it was an indispensable (and SWEET) part of their culture, which it is not today. We really need more rigor in the industry about the blatant misinformation and clichés that get thrown around.
Pardon my tirade.
How much of domestic Prosecco purchasing is simply to craft cocktails at home such as Mimosas?
The base effervescent wine can be ANYthing.
Prosecco simply happens to me affordable, starting under 10 bucks.
As for Champagne’s style, in the 19th century it was historically sweet.
“History of Champagne”
Link: https://en.wikipedia.org/wiki/History_of_Champagne
Excerpt: “From sweet to brut”
“Throughout most of the 19th century Champagne was made sweet. The taste was pleasing to most wine drinkers and the added sugar helped winemakers to cover up flaws in the wine or poor quality from less desirable grapes. Champagne houses would use the dosage to tailor the sweetness to whatever style was in fashion in a particular market. The Russians preferred the sweetest level with as much as 250–330 grams of sugar added. Scandinavia was next at around 200 grams followed by France at 165 grams, Germany with slightly more, and the United States preferring between 110–165 grams. The English preferred the driest style at 22–66 grams of sugar. [4] Gradually tastes developed to favor less sweetness and higher overall quality in the Champagne. The first slightly dry Champagne to emerged was labeled demi-sec or ‘half dry’. The success of those wines prompted the introduction of sec or dry wines. Other producers made wines with even less sugar and began to call these wines extra dry. In 1846, the Champagne house Perrier-Jouët introduced a wine that was made without any added sugar. This style was initially ill received with critics calling this wine too severe, or brute-like. But over the next generation, this ‘brut’ style with significantly less sugar than wines labeled extra dry became the fashion for Champagne and today is the modern style that the majority of Champagne is made in. [7]”
[Footnote # 4: H. Johnson “Vintage: The Story of Wine” pp 330–341 Simon and Schuster 1989 ISBN 0-671-68702-6
Footnote # 7: K. MacNeil “The Wine Bible” pp 164–165 Workman Publishing 2001 ISBN 1-56305-434-5]
The anecdote is told that the French were abhorrent about British demands for less sweet Champagne. But commerce willed out, the French lowered the dosage, and willingly sold it to their national neighbor across the Channel (while purportedly muttering under their collective breath about the “brutish” British and their unsophisticated palate).
I love Rod’s comment. Too bad he’s no longer wholesaling wine.