The Wine Industry May Be Immune to Inflation

Wine prices have barely increased in the past year despite a 6.3% rise in consumer prices, as noted by Jon Moramarco, a managing partner and wine industry analyst at bw166. But that’s only good news for consumers and quite worrying for wine producers, who actually can’t raise prices to match the world’s current financial situation.

Per Wine-Searcher, wine prices are up only 1.8 percent from August of 2021 to this year (beer is 4.8 percent, which is still less than other consumer goods … meanwhile, whiskey seems to more inflation-proof than wine). “Inflation is not affecting beverage alcohol like other consumer products,” says Moramarco.

The reason? Wineries can’t raise prices without losing customers, at least for the cheaper (think $20 or less) bottles at grocery stores. Moramarco’s report suggests that whenever a winery raises prices on an inexpensive bottle by as little as 25 cents, it loses sales volume on that item that can’t overcome the price increase. So even though the producers are dealing with higher prices on their end, they can’t pass along those extra costs without further putting a dent in their wallets. Customers at restaurants seem willing to go to a cheaper bottle if prices increase, as well — which is why wine prices at eateries haven’t increased as much as food prices (an uptick of 5.7 percent vs. 8.9 for food).

The other news from this state of the wine industry analysis was mixed: Wine sales overall will probably be down this year due to a “huge drop in wine-based cocktails and vermouth” but sparkling wine sales in the U.S. should grow by 4.2 percent. Not that the industry has a lot to celebrate.