Drinking, Selling Wine in a Recession

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What will happen to wine sales and wine drinking during a bad economy? Will economic recession cause a reduction in wine sales and wine drinking, or will the tough times cause people to turn to drinking wine — and alcohol of all of types — in ever greater amounts? Both seem plausible and in fact both appear to be happening at the same time: people are drinking more, but they are changing what they drink to accommodate their economic circumstances.

 

Drinking Less to Save Money in Tough Economic Times

If the economy is bad, shouldn't people drink less rather than more, just to save money? That seems to make sense and it's not entirely wrong. On the retail level, the volume of wine sales appears to be decreasing — people are probably buying one bottle instead of two at least some of the time.

On the other hand, people are also looking for better values so where might have been willing to spend more to get a better wine, people want to spend less to get at least as much wine in volume. We should also expect to see people drinking more at home rather than going out to restaurants where the same bottle costs them so much more.

The highest end of wine sales will probably suffer most because the people with the most money won't be as willing to spend thousands and thousands of dollars per bottle. Premium wines — very good and expensive wines that don't go for obscene amounts of money — should continue to do reasonably well and may even experience as slight upturn.

 

Drinking More During Tough Economic Times

The classic explanation for why alcohol sales rise during recessions and other economic downturns is simply that people are depressed, upset, and otherwise feeling bad so they turn to alcohol for its effects on mood. It's so common for people to turn to alcohol when suffering other types of personal problems that we should expect similar behavior when it come to economic problems — including widespread economic problems that affect all of society.

Self-medication isn't the only possible reason why people might drink more alcohol or wine during economic downturns. Tom Wark argues:

Whether in good or bad times, drinking is a leisure time pursuit. You don't do it while you are at work. Well, most people don't. As it turns out, there are far fewer people at work these days. Put another way, the total amount of leisure time Americans collectively have on their hands has increased...and they have to spend it doing something. Drinking appears to be the way to spend that time for some.

Wark certainly has a good point, though I doubt that it will qualify as full alternative explanation. I think it's more likely that this is one factor out of many, with the self-medication behavior being another. Which motivation or explanation is more significant is a question that might not be answerable, though it would be interesting to see someone try.

 

Looking for a Good Wine Deal

Wine merchants can see the tough economy as well as anyone and they want to stay in business like any other retailer. For many, this will mean offering good deals on wines in order to draw in customers and get them to buy more than they might otherwise have planned. Wine drinkers are looking for value and will probably continue to spend money on wine if they see good values.

Not all wine merchants will do this — some will continue to offer premium wines at premium prices in the expectation that the people who want this sort of wine will continue to be willing to pay the price for it. They may be right, but there are plenty of wine merchants who aren't in that sort of situation and who will have to adjust their sales practices to meet their customers' expectations.

What this means for you is that you will be able to find good deals out there if you invest the time and effort to find them. They won't appear in every wine store and you can't assume that you'll be able to just walk in to find amazing deals. If you call or drive around, perhaps to stores you don't usually frequent, you should be successful. You can also look upon this as a good excuse for trying new wines that are being sold at a discount.

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