A number of salient points to highlight here as a result of this plummet in demand for grapes.
1. Wine makers are clearing their inventories.
Due to the economic recession, there has been a plummet in the demand for these grape wines and thus, retailers have no choice but to stop ordering and making wine. They have to clear off the wine on their shelves before they start to pile up to an insurmountable amount. With regard to that, they will have to stay away from imports for now.
As a result of this, the people at the vineyards have no choice but to keep the grapes for themselves and they must make their own wine with those premium grapes or else they will rot away very quickly.
Big vineyards like the Beckstoffer Vineyards have turned to the making of their own bulk wine and boutique wine. Once they have finished making it, they immediately sell it to the retailers at low price and earn a small profit from them while they wait for the recession effect to wear off.
2. Consumers benefit
As a result of this move by many vineyards, consumers can expect to get their premium wine as early as the holiday season in 2009, for instance, during the Christmas season. They are available at low prices from 20 bucks onwards. It's really a steal for premium wines today but the vineyards have no choice as this is the only way to deal with the grapes. It is an imperative move, really.
In my opinion, I believe that it is a pretty shrewd move to manufacture your own wine. Afterall, grapes are perishable fruits and under the humid weather condition now, it is not advisable to store them for a long period or the quality of the grapes will drop badly.
Then again, I believe that there is an alternative as to how the vineyards owner can actually deal with these grapes.
They can possibly continue selling these grapes to the retailers, but this time round, at a lower price for a fixed number of years. Let's look at it this way, the economy is bound to recover in the coming years and the demand for grapes will definitely return. By drafting a contract with these retailers, you can continue to get a steady income and it is fixed for the rest of the years. The downside to this is that you will have to lower the price at which you sell these grapes to them.
However, if you can secure a good deal, and have a steady demand for your grapes, there is really no harm in doing the deal. Afterall, there is no gurantee that the demand for the grapes will return even after the recession is over. The demand for them is really determined by the speed at which the retailers clear their inventories. You really can't afford to make your own wine and sell them all your life can you? Hence, I believe that the vineyard owners can possibly strategise for the long term and plan out exactly how they can sell these grapes at an optimal price that will allow them to make a consistent amount of profits.
Credits -flavourofwines, -alzheimersadvocacy
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