Supply and Demand, Bulk Pricing

1. Vintage Size (Supply)

• Big harvest = more bulk wine on the market → lower prices.

• Short harvest (frost, drought, heatwaves, disease, hail) = less supply → higher prices.

• Weather events in one region (e.g., wildfires in California, drought in Spain) ripple globally.

2. Demand from Bottlers & Retailers

• If large retailers, supermarkets, or value wine brands need more volume, demand spikes and pushes prices up.

• If consumers trade up (e.g., to premium wines) or trade down (e.g., to boxed/value wine in a recession), that shifts demand for different styles and price tiers.

3. Carryover Stock

• If last year left a wine surplus sitting in tanks, that depresses prices.

• If wineries are short on inventory going into a new harvest, buyers will pay more to secure volume.

4. Currency & Trade

• Since bulk wine is traded globally (Spain, Italy, Chile, Australia, South Africa are major exporters), exchange rates and shipping costs matter.

• Example: A strong U.S. dollar makes imports cheaper for American bottlers.

5. Quality & Certification

• Wine from premium appellations (e.g., Napa, Bordeaux AOC) or with organic/sustainable certifications commands higher prices.

• Generic international varietals (Cabernet Sauvignon, Merlot, Chardonnay) are priced more like commodities.

6. Global Competition

• If Chile or Spain has a bumper crop, they flood the market with cheap wine, dragging global prices down.

• Conversely, if multiple major producers (e.g., Europe + South America) have small harvests in the same year, prices jump.

7. Macro Factors

• Inflation (energy, glass, labor) can push wineries to raise prices.

• Consumer trends (low/no alcohol, rosé, Prosecco) can increase demand for specific styles.

• Geopolitics (tariffs, trade disputes) sometimes distort prices.

  

  Fermentation Tanks