The benefits of stability

The world of wine is impacted by economic factors specific to the industry, what I refer to as the "wineconomy," and is also influenced by the general economic forces that affect each of us. After the last few years of turmoil in the overall economy and tough years in the grape growing and winemaking business, the industry from the growers all the way through the consumers could benefit from some increased stability.

The specific concerns within the wine industry will partially be addressed at least domestically by the much improved 2012 vintage. Along with some industry house cleaning with some wineries closing down, it appears that supply and demand for wine grapes as well as finished product in the bottle should be well balanced. While there is still a lot of wine out there on the market in general it should be good for consumers.

If we also are lucky enough to find stability in the winery/distributor relationships all should shape up nicely. Each year around this time there is a shuffle that takes place as distributors drop wineries they represent and wineries do away with distributors they have previously sold to. This can and frequently does create dislocation at the consumer level causing us to lose track of some of our favorite producers.

While some of these changes are inevitable and ultimately lead to overall health in the wine industry others are based on short term reasoning with long term consequences. Scale is all important when it comes to proper pairing of wineries and distributors. A small winery with a very large distributor will result in the winery left lacking for attention in the distributor's book; a large producer with a small distributor will result in the winery dominating the distributor's behavior causing illogical behavior towards their other customers.

So far this year end we are seeing less of this shuffling of partners which is a good sign for our ability to get our favorite bottles. Fewer wineries are stuck with excess product resulting in less changing of distributors to move large amounts of wine quickly, and distributors appear to be more content with the brands they represent.

The impact of the overall economy on consumer demand for wine appears more certain as well with one exception, the impact of liquor and wine privatization from prop 1183 in Washington state continues to cloud the view for the local wine business. Due to our close proximity to Washington the dislocation created by the passage of 1183 as distributors dropped wine brands to add hard liquor affected us here in North Idaho. The inefficiency is gradually waning for us; however there is great risk to the wine business if a similar law were enacted here. We continue to feel strongly that caution is in order before any similar law is contemplated here in Idaho.

When the economy first went deep into recession 4-5 years ago, it caused demand for wine at the consumer level to drop, and simultaneously resulted in the average bottle price to drop as all of us looked to drink less expensive wine. At the wholesale level distributors reacted by dropping many non or underperforming brands and in some cases dialing back their buying from entire appellations. The most obvious example was how quickly the market pulled back from South African wines. This part of the globe produces some great juice, however it was new to consumers and the wines were priced fairly aggressively. When we first opened the shop we had the opportunity to taste quite a few wines from South Africa but within a year many were no longer available. This is only one example of many that showed how customers were no longer able to find some of their favorites as the brands were dropped as wholesalers reacted to the drastically slowing economy to preserve capital.

We expect that if current trends continue and the economy continues to stabilize and even return to normalized growth, supply too should stabilize and wine choices should broaden. A broader array of wines to choose from is great news for us as wine consumers!

Access for wine drinkers to their most prized selections is the most important driver of a healthy wine industry. The increased stability of the overall economy as well as the "wineconomy" will improve the depth and breadth of selections at the consumer level. After the last couple of years all of these trends are welcome, and as access continues to improve if you are not able to find some of your favorites just ask your favorite wine professional to track down the bottle for you. We may all be pleasantly surprised with the return of our favorite bottles.

If there is a topic you would like to read about or questions on wine you can email George@thedinnerpartyshop.com or make suggestions by contacting the Healthy Community section at the Coeur d'Alene Press.

George Balling is co-owner with his wife Mary Lancaster of the dinner party - a wine and table top decor shop in Coeur d'Alene by Costco. George is also the managing judge of The North Idaho Wine Rodeo and writes frequently for the online version of Coeur d'Alene Magazine at www.cdamagazine.com. You can learn more about the dinner party at www.thedinnerpartyshop.com. You can get all of these articles as well as other great wine tips by friending us on Facebook http://www.facebook.com/#!/dinnerpartyshop.