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Peter Marshall of Sur Lie has some thoughts about the coming year.
For those of us who like to knock back the odd glass or bottle of wine, get ready for sticker shock. 2022 will see the price of wine increasing. To quote Dickens, it will be the best of times and the worst of times.
For drinkers with a penchant for the classics, especially Burgundy, it’s going to cost you more to get your drink on thanks to a combo of increasing demand coupled with diminished supply due to frost and hail or other weather events such as fires and floods across several parts of Western Europe.
The pain won’t stop there, as wines from less hallowed ground won’t be immune to price hikes thanks to brutal weather events in California and Australia (to name just a couple more). For members of the gen pop a little more constrained by price, and who are willing to take a journey into uncharted territory via recommendations from retail staff and somms, 2022 may see you enjoying fabulous wines for reasonable prices from unfamiliar grapes and places. For the rationale behind these Nostradamic musings, I invite you to take a peek behind the curtain.
Continued disruption in the supply chain will lead to rising prices throughout the supply chain. Wineries are seeing rising prices in their cost of goods, from glass bottles to the price of grapes. Many have held off as long as possible on raising prices but are now doing so out of necessity. Importers facing the increased cost of wines that they import, and also skyrocketing shipping costs, in turn will raise their wholesale prices. Retailers and restaurants will apply their standard pricing formulas, which means gen pop will see shelf prices and wine list prices creeping up. Look for wine prices to start to rise in Q1 and Q2.
This will affect businesses of all sizes and wines of all prices, but will hit small and mid-sized wineries and importers the hardest as they struggle with cash flow due to increasingly long and unpredictable transit times. It means they’ve got money going out, but not coming in within normal timeframes.
Large wineries and distributors will flex to increase their share of the market. This may look different than normal and could potentially be as simple as holding prices steady longer than competitors. But larger establishments will likely see increased prices too, so they can continue to run all the usual pricing activity (aka putting stuff on sale) and offer all the usual kickbacks that smaller companies can’t compete with or choose not to compete with—like falsely inflating the price of a wine so that the cost of the “support” doesn’t hit the bottom line and then convincing buyers and/or owners who don’t care about the quality of their programs or establishments to list mediocre or just plain shitty products because that reach around sure felt nice…also to all those restaurants asking for 1 in 10, if I bring in 10 friends can I eat and drink for free?
There will be increased pace of mergers and acquisitions across the supply chain, whether that’s DHL buying JF Hillebrand, big wineries buying smaller wineries or distributors merging to extend their reach. There will be an increasing move to consolidation.
READ MORE: What Is Alt Whisky?
READ MORE: What Is Alt Whisky?
Big importers and big retailers will play it safe – during COVID the wholesale prices BC Liquor Stores are looking for in their “invitations” to importers have generally gone lower and lower, making it practically impossible for small and mid-sized wineries and importers to meet the requirements.
This presents opportunities for small importers less tied to classic regions, as big companies generally won’t jump on anything until it’s been trending in the right direction for a while…unless you are doing the pioneering work of concocting cookie-flavoured wine, for example. But that is a whole other discussion for another place and time.
Small importers will keep it fresh, but will need to rely more than ever on restaurants and private retailers as BC Liquor Stores gets increasingly difficult to do business with unless you’re a big company working with big suppliers. A few new importers that are contributing to the dynamism of the wine scene here to keep your eyes on are Kava Selections, Grape by Grape Wines, The Living Vine, Untapped, Plato Ferments, Minimalism Wines, Meditaste, Substrat Wine Co. and Cigale Vin. A few more established ones always worth keeping your eye on are Boutique Wines, Sedimentary, and That’s Life Gourmet.
It will be an exciting time for folks who are willing to dine out at independent restaurants such as AnnaLena, Published, Dachi, Elephant, Delara, Chambar, Kissa Tanto, L’Abattoir, Collective Goods, Say Mercy!, Burdock and Co., and Bar Gobo (above) to name a few. For home consumption, shopping at stores like Marquis Wine Cellars, Liberty Wine Merchants, Kitsilano Wine Cellar, Legacy, Everything Wine vintage rooms, JAK’s South Granville etc. will reward the curious.
Peter Marshall is the owner of the boutique wine importer Sur Lie.