Wine is expected to get a lot more affordable due an oversupply of California grapes
- Wine prices are projected to hit a five-year low in 2020 due to a surplus of California grapes and shrinking demand industry-wide, reports say.
- Higher-quality wine that costs less is a win for consumers, but likely means growers will have wasted supplies and shrinking incomes.
- Millenials' relative lack of wine consumption contributes to the decreased demand, but bargain prices could entice millenials to start buying more.
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Wine prices are expected to hit a five-year low this year thanks to a California grape surplus and a declining demand for wine, CNN's Allen Kim reported Monday.
The wine industry is currently suffering from a decline in demand and the additional supply could lead to waste. For consumers, this means better bang for your buck. But for producers, vineyard removals, inactive plots, and shrinking income could be on the horizon.
"The consumer will discover unprecedented wine values in 2020 and should buy up," Rob McMillan writes in "State of the Wine Industry," a yearly report cited by CNN.
The decline in demand for wine is due to a growing interest in premium spirits and craft beer, according the report, as well as generational shifts in consumption trends.
Baby boomers, a core customer base for wine, are moving into retirement and declining in number and the amount they drink, while millenials aren't embracing wine, instead turning to other alternatives or abstaining altogether as health outlooks on alcohol consumption shift.
However, the anticipated drop in wine prices, which could last up to three years, may help incentivize millennials to buy more wine, CNN reports.
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