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Drinking Through the Recession

For smart consumers, trading down in price doesn't have to mean trading down in quality.

Find value by looking closely at sale tags.
Find value by looking closely at sale tags.

by Mike Supple
published: 05 May 2010
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Tough economic times mean more reasons to drink but less money to make it happen. Whether drinking to fight the depression of losing a job or simply to enjoy the extra leisure time afforded by reduced hours at work, the only way to keep volume up while sticking to a reduced budget is to trade down in price - and consumers are doing just that.

Graph of U.S. wine consumption 2007 to 2009.

Americans Are Drinking More While Spending Less
Studies done by independent companies around the globe all show the same general trends: consumption of wine in the US has risen during the recession while the total retail value has decreased. Research by The Nielsen Company also shows a 2% increase in US wine consumption in 2009, and data from RNCOS suggests the trend will continue for the next three years, putting the US on target to become the largest wine consumer globally by 2012. Fortunately for smart consumers trying to make the best of a difficult economy, trading down in price doesn't have to mean trading down in quality.

Lower Price Doesn't Always Mean Lower Quality
Wineries, restaurants and retail shops all feel the squeeze during a recession. The wine was already made so it needs to be sold - and this creates a buyer's market. Restaurants get hit particularly hard because they charge more than retailers for the same bottle of wine (often 100% more), leading consumers to buy retail and drink at home. The wineries and retailers have two choices: lower prices to attract more business or keep prices steady and hope consumers will remain loyal.

Recognizing that betting on customer loyalty during a bad economy is playing with fire, most retailers go the route of cutting prices and promoting wines from wineries that are willing to adjust their prices. Consumers respond to these big sales and new promotions, and for good reason: while more money doesn't always mean a better wine, it is generally a pretty good indicator. A wine on sale from $15 to $7 is probably better than a wine that is $7 year in and year out.

Get the Biggest Bang for your Buck
As a savvy consumer with a hankering for a good drink despite the sluggish economy, where do you turn? Here are a few quick tips to help ensure you're spending your money wisely and still enjoying every last drop in the bottle.

  • Buy wines you don't recognize. If you suddenly see a bunch of new labels in your price range, check the tags - you could be looking at some great wines with big price reductions. Why spend $10 on a bottle that is always $10 when you can spend $11 on something new that usually goes for $20? These new bottles suddenly in your price range can expand your enjoyment of wine whereas wine that is always super cheap is still crappy.

  • Don't buy directly from the winery. These guys sell at full retail markup in the winery to avoid the risk of undercutting the retailers that sell their wine. Nine times out of ten, you will find the same wine on sale for a better price at any wine shop. Note: This is only true for the big names that you find in every store. The small, boutique wineries don't face the same problem of competing with many wine shops, and often the only place to find their wine is at the winery.

  • Go to more than one liquor store. Different shops have different standard markups, and different buyers get different wholesale discounts. Your favorite wine may be full price at your local haunt while it's half-off two blocks down the street.

  • Use the internet. Yes, the Internet is available on computers now. Contrary to popular belief, it is good for more than watching dumb animal videos at work and surfing...um...whatever it is you're surfing at home. It's also a great resource for discount booze. Two great wine search engines can help you find a particular bottle at the best price: WineZap and Wine-Searcher. If exploring great new deals is more your speed, there are several sites like Wine Woot, JJ Buckley and Cinderella Wine that have regular offers for wines at huge discounts - often more than 50% cheaper than anywhere else. If something from one of these places strikes your fancy, be ready to pull the trigger. As with all good things, the best wine deals sell out in hours!

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