Is There A Wine Recession Coming?

With the huge popularity gain for wine in the past five years, one could wonder if a recession in the wine industry is looming.

Much depends on factors in the grand scheme of things. The once-booming housing industry created much wealth for a lot of Americans, but a recent downturn in home sales has created a large-scale semi-panic in the mortgage and banking industry. The stock markets have been shaken by the idea that mortgage companies are virtually disappearing overnight. This has put into question the stability of the biggest banks, and what their exposure to these smaller (defunct) companies has been.

The wine industry is based much on excess wealth. Wine is seen by many, not as an essential, but as a luxury item that would be cut out of a budget if tough times arose. A recent look at distribution and retail inventory levels showed a large glut, sometimes in excess of 200 days worth of stock.

The ever-popular Pinot Noir seems to be immune to this kind of chatter, however. Spurned to new heights of acceptance by the movie Sideways, the "heartbreak grape" seems to be an indespensible red... a must for any cellar or pantry. The next couple of years will be crucial to the industry at the retail and restaurant level.