The cost of a bottle of wine could begin to drop as California realizes an oversupply of wine grapes.
A new report from the Silicon Valley Bank Wine Division finds a combination of California's grape surplus and declining consumer demand will drive down the price of even high quality bottles of wine.
The prices forecast for wine this year are the lowest since 2015, according to the report.
This is the first time in recent memory that the oversupply is due to a decline in consumer demand instead of over planting, the report states.
The rainfall in early 2019 jump started growth of grape vines planted in California and producers report having one of the best growing seasons in recent years.
But the report claims growers are missing the mark on what a new, younger generation of consumers is craving.
As the baby boomer generation ages and ceases to consume wine, the millennial generation is found to choose spirits, craft beer, or sobriety.
While this may be bad news for growers, the oversupply can benefit both winemakers and their customers.
"Certainly we saw last fall that there was excess fruit out there and so there were growers that had excess fruit and that means they were offering fruit at a discounted price," Stephen Ross, the owner and winemaker at Stephen Ross Wine Cellars in San Luis Obispo, said. "Some of us were able to take advantage of that, pick up good fruit at a good price."
Ross said he was able to buy top tier fruit for a discount of about 60 or 70 percent off.
That means he can offer his customers a different price as well.
"It's kind of a good thing, bad thing," Ross said." It's a good thing for the wineries to be able to take advantage of the excess fruit and maybe it's not so good for the growers when things have back up on their side."
Wine prices aren't expected to rebound until well after 2020.
