If you are curious about the context in which vinomofo trades then the recent market insights from Wine Australia are interesting: report here
The main takeaways are:
The main takeaways are:
- wine production in 2022/23 dropped by a lot consistent with accounts that farmers left grapes on the vine because it was not cost effective to harvest them and producers pulled back because the market is a hard one to sell into;
- the level of consumption was similar to previous year but the value of the wine sold went down about 6%. This could be because people moved down a bracket in price but I reckon reflected that sellers discounted to get buyers. Remember this is happening at a time of high inflation - most things are going up at least 5 to 10% including the input costs for farmers and wine maker, but they can't increase their prices because of ...
- the wine glut continues especially with red wines. There is the equivalent of about 3 billion bottles of excess wine in storage, basically about 150 bottle per adult in Australia. The glut went down a bit because of big decrease in production this last year but not by enough to make any material dent in it;
- the transition from red to whites continues at a glacial pace.
- red wines will have aspirational retail pricing and then realistic sale pricing. White wines will do better in the market just simply because less of a glut and change in taste
- only a few brands/ labels can be price setters and even then that may be for a period. Once a good review fades with time, you don't want to get caught with too much stock;
- wineries will focus on their wine clubs. Their have been some amazing deals from some wineries and these will keep on as they seek more sales in a saturated market
- I've noticed later that a few long standing wineries have worryingly started to disgorge their historic collections of wine (much like a starving person losing fat deposits). Expect to see more aged wines as wineries look desperately for cash and seek to make space for the burgeoning more recent wine overhangs;
- cool regions will be ok and hot regions will suffer as the latter's grapes are seen as lesser and therefore cheaper so that the margin between costs and sale evaporates or turns negative;
- vinomofo will continue to exploit the distress of the market and we will continue to get bargains in red wines (not so much white wines);
- we will see more practices like wine stored in bulk stainless steel for long periods to delay the cost of bottling and then being bottled and marketed as the vintage but with a lack of ageing characteristics - we are already seeing this with some vinomofo sales. Similarly, established brands may use their name as a means to move stock from lesser known brands. Imagine the deals been done on bulk tanks at the moment especially if there are distressed wineries about. If you can buy good bulk wine for next to nothing and then put it out under an established brand as a "special" (for example, on vinomofo) then there is a killing to be made. It's already happening but expect more of it.
) and a Circe Pinot Noir 2016 from Gippsland. If anyone knows where to get more bottles of this beauty at under $20, please let me know!
