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By Elsa Butler

Sales of inexpensive wines thrive despite bad economy

According to a recent Nielson ratings report, the wine industry is experiencing distinct changes in consumer buying habits.

“The guys who were drinking $50 to $80 bottles of wine are now drinking $30 to $50 bottles. People who were drinking $15 to $20 wines are now drinking $10 to $15 bottles,” said Phillip Hurst, CEO of Truett Hurst Dry Creek Valley in Sonoma, CA.

There are many ways consumer habits are changing, but the reason for the change is consistent. People are watching their budgets carefully and spend much more frugally, but they still want to enjoy the small luxury of a glass of wine.

“It used to be that I would ask what’s a good Bordeaux or what’s a good California Sauvignon blanc. Now I say, tell me what’s good for under $10,” said Tara McDowell, a PhD candidate and part-time art curator.

“The people working in the wine store completely understand where I’m coming from. It’s not nearly as embarrassing to say, ‘what’s your cheapest bottle’ as it would have been a year ago,” said McDowell.

Wineries, retailers and restaurants are struggling to adapt their business models to new consumer tastes and budgets, some more successfully than others.

“The wine producers who have all that inventory with those costs already built in and those margin expectations have to make a tough decision—are they going to discount their brands or are they going to try to weather the storm,” said Hurst.

While consumer behavior may change, the market is not disappearing.