The Wine “Reset” Hasn’t Been Long Enough or Hard Enough

Despite reports that numerous wineries have sold or are on the market, and a recent Wine Spectator analysis indicated that 190 Wine Spectator wine award-winning restaurants have closed in the last two years, the economic struggles within the wine business haven’t been deep enough to create the kind of everlasting change that is necessary for healthy, long-term domestic growth.

And, despite the fact that a “double-dip” recession looms like gathering storm clouds on the horizon, 2010 feels like we have escaped the nuclear winter business climate of 2009, and a return to “normalcy” has cautiously crept back into our lives.

Yet, it is exactly this “return to normalcy” that is the problem. 

Obviously, for the wine business, the “old normal” was not healthy in the first place.  There are too many wineries growing on expensive land with a high degree of financial leverage selling wine at too high of prices with too few distribution options.  When coupled with the “lifestyle” marketing that the wine business is addicted to, it makes you wonder if a harder slog is necessary to jolt the wine business into a new set of rules that run parallel with the U.S.’s ascent to the top of the heap in worldwide consumption and sales.

Simply, a wine lifestyle could be the centerpiece of genteel living and not the province of snobs, recasting the notion of the “good life” as something obtainable for all … wine as a vessel for something bigger and more profound than conspicuous consumption …

However, as evidenced by wines over $20 leading dollar volume sales growth, as reported by Wine Industry Insight from Nielsen data, I’m fearful that the wine business will continue in its current form, taking the last half of ’08 and all of ’09 as an aberration instead of seeing that a golden opportunity is within its grasp if only the fortitude existed to wean itself off the luxury and lifestyle positioning that has substituted for imaginative engagement with customers.

And, dollar volume growth in the luxury segment is not the only indicator, either.  Elsewhere, I have noted that Visa Signature now has wine benefits associated with its credit card.  Crushpad has set-up Napa Valley concierge-like services for its customers at other wineries, and Destination Cellars has bolstered its management team for its very high-end, membership only wine club, amongst other clues that the wine business is still planning to be in the luxury business as a rule.

Perhaps I have been running a fool’s errand in thinking that this economic crisis would be good in the end – giving the wine business a chance to collect and recast itself after a 25-year run that pinned it into being the nearly impenetrable drink of the affluent. 

Maybe I was naïve in thinking that wine could be a salve in a return to a simpler way of life and a means to reclaim our souls, a level-setting part of life that celebrates conviviality, the joy of family, friends and a good meal shared with those we are closet to, a spirit-nurturing tonic that enlivens relationships, but forsakes the importance of a wealthy lifestyle to go alongside it.

As writer Kurt Andersen said in his influential book Reset on the long-term impact of post-recession consciousness, “The new economic culture should be about proportion and function, efficiency and accessibility.”

Yet, I fear that a short-term recovery in the economy will bear no fruit in bringing clarity of purpose to the role that wine can play in our lives – there will be no reset on proportion and accessibility.  I fear that a recovery in the near-term will continue to engender luxury lifestyle as the marketing vehicle for selling something that should be viewed in an entirely different light. 

The Pacific Rim’s embrace of wine can act as the folly of a lesson learned already in the states – wine is a beverage in which there is a luxury segment, but for which luxury does not define the public perception of its place in our life.

Perhaps the last bit of idealistic zeal that I possess after realizing that the American dream can come crashing down in a near instant is that the mistakes of old won’t be repeated in the future.

Wine?  Are you listening?