Wine Economy to Improve This Year

(Wines&Vines) - The stage is set for the U.S. wine industry to enjoy a better year in 2014 than it did in the slow-growth year of 2013, according to a panel of industry analysts who addressed the Western Hemisphere’s largest audience of winemakers and grapegrowers Wednesday at the Unified Wine & Grape Symposium.

In a session titled “State of the Industry,” they concluded that a healthy supply of U.S. wine is now in balance with steadily growing demand from American consumers. The phrase “it’s complicated” punctuated their remarks, however, as they sized up the status of global supply and demand. The complications include drought in California, competition from imports and competition from craft beer and cocktails.

The remarks came on the first morning of the 20-year-old, three-day conference and trade show that reported total registration of 13,000 participants and 650 exhibitors.

The great global wine panic
Wine economist Mike Veseth drew parallels between Orson Welles’ “War of the Worlds” broadcast and an October 2013 report warning of imminent wine shortage. As with the Orwellian radio stunt of 1938, the report published by the Australian research arm of Morgan Stanley quickly set in motion a public frenzy, with international news outlets printing headlines decrying “Global Wine Shortage Looms” (Fox News), “Is China Causing a Global Wine Shortage?” (CNBC) and “Has Our Worldwide Barrel Run Dry?” (International Business Times).

In the weeks following the report, businesses theorized about how to monetize the rumored wine shortage.

“The people in the fine wine auction business said, ‘Well, if the world is truly running out of wine, maybe you should buy Bordeaux futures.’ Everyone tried to sell their own businesses. Some people tried to sell wine as an investment,” said Veseth, emeritus professor at the University of Puget Sound and editor of the blog The Wine Economist. “Some people (such as those in Australia, New Zealand and Idaho) said, ‘Come to us if you’re running out of wine.”