Mezzanine The Fine Wine Specialist Brand Manager, Matt Keoghan, discusses how inflation is affecting the wine world.
INFLATION! One word that will no doubt take the place of “unprecedented” as the most used word of 2022…
It’s a word that has people cringing as we all get used to the current climate and higher cost of living (another phrase which will be up there) around the world. Unfortunately, the beverage industry has not been left untouched by it. It has been somewhat of a perfect storm with the fallout from COVID, the conflict in Eastern Europe and the current shortages in staffing across all industries. A combination that has made it very difficult for pricing products that are only harvested once per annum.
Hit hardest are the grape growers, especially those in regions that were a little too China centric prior to the embargo of Australian goods, albeit everything other than those particulars they really need ie ores, meat, wool and cereals... Grape growers in the Barossa are tipped to be averaging $800-$900 a tonne for premium fruit that used to be in high demand and going for $2,200 - $2,500 a tonne. Growers have been trying to plant future proofed varietals on the premise that bigger wine companies would unlock access to the more premium and favourable varieties by purchasing the experimental varieties. Now these growers will be hung out to dry as there is no leverage to sell package deals like the aforementioned. There will be many skeletal vines this winter with the remnants still hanging from the vine from fruit that could not find a home.
Soaring import costs, drops in supply and some obvious stockpiling of the likes of Chablis and Burgundy from buyers and consumers alike have made for severe undersupply of certain regions across the board. As a result, we will see a big push for more locally sourced wines of similar ilk. We are already seeing a large demand for high prized pinot noir producers from New Zealand because of this as the next cab off the rank, especially for top on premise outfits.
What does this mean for the consumer? We know that like all forms of cost of living, as wine is life, we are going to see this hit the consumer eventually, if not already. We are already seeing the thirst for imports that remain by the consumer especially in retail, but also the filtering through all cuvees of imports. We will see consumers wise up with value imports and start drawing more on domestic producers with great reputations.
The future in all facets is looking tough, but it is in these times that we need to support our industry as best we can, and hope that in hard times there are silver linings found, and the silver lining may be in the cloud of Australian wine being consumed more on Australian shores, and support given to those that need it most here.