Price Becoming "No. 1 Weapon" in U.S. Wine Market

(Wine-Searcher) - Here’s the good news for consumers: as the number and range of outlets selling wine proliferates, prices are not likely to rise any time soon. In fact, wineries may end up cutting prices in a bid to win shelf space, meaning a lower bill for shoppers at the checkout.

The bad news – maybe – is that producers could also lower their prices to compete with each other, with fears that the end result will be lesser-quality wines in the long term.

Those were among the forecasts from experts assessing the wine industry at the Unified Wine & Grape Symposium in Sacramento, California – North America's largest wine trade show – on Wednesday.

Naturally, the biggest buzz among the 13,000 people attending was over a rainstorm landing on the parched region after more than 50 days without rain.

The drought was on a lot of minds, and one speaker, Nat DiBuduo, president of the Allied Grape Growers, even suggested that the State of the Industry panel should do a rain dance.

“What are today’s issues?” he asked. “It’s water. It’s water. It’s water.”

DiBuduo predicted lower yields in 2014 because vineyard managers will cut back vines and canopies to deal with the water shortage. But, he said, after two big harvests in the state, the industry here is in balance.

“There is no shortage of wine,” declared DiBuduo.

There is also, apparently, no shortage of retailers selling wine. That suggestion came from both Jon Fredrikson, president of the consulting firm Gomberg, Fredrikson & Associates, and Francesca Schuler, chief marketing officer of BevMo California.

“Everyone who can sell wine is out there selling wine,” Schuler said. “Who would’ve thought Bed, Bath & Beyond would get into the wine business?”

Schuler cautioned that the competition among big-box stores, supermarkets and outlets selling bedspreads and bathmats might not be entirely positive.