If you’ve been reading the news — and I assume you have, because you’re reading this — you’ve probably seen reports of supply chain issues disrupting the economy. Container ships are hard to come by and, thanks to pandemic-related worker shortages in ports, are difficult to unload. Labor issues, as employers struggle to bring employees back to work, hinder the ability to get products to market.
Like many sectors of the economy, wine is recovering in fits and starts. The short-term outlook for wines we will find on retail shelves (and their prices) is a mix of pandemic and Mother Nature. The skinny: Stock up now, because demand will rise as restaurants reopen, and some wines may see short supply and higher prices. The crunch is probably coming in late summer and maybe — if all goes well — easing by the holidays.
“We’re coming out of the pandemic, restaurants are opening again, and there’s pretty decent retail demand,” says Adam Sager, co-president of Winesellers Ltd., a Chicago-area importer. “The problem is supply. We can’t keep anything in stock.”
In the “before times” — two years ago — an importer would place an order from a winery in France, for example, and the winery would have the product ready to ship in two to three weeks. The wine would take about 10 days to get from port in France — Marseille and Le Havre are the primary departure points — to get to the U.S. East Coast (New York, Baltimore and Norfolk are likely destinations) or several more days to traverse the Panama Canal and arrive in Los Angeles or San Francisco. Count on another three to five days to clear customs and get to the importer’s warehouse, and from there to market. The process took about five or six weeks from the time the order was placed to the wine reaching retail shelves.
“Now it is taking three to four months,” says Guillaume Touton, the Monsieur Touton of M. Touton Selection, a New York-based importer. And the problem goes beyond France. Shipments from other European countries, South America, New Zealand and Australia are facing the same hurdles.
Today, a shipment might sit at the winery for several weeks while an importer tries to reserve space on a container ship. The importer pays for the wine when the winery says the order is ready, so this time is a cost on the importer’s ledger. And with many products in addition to wine competing for containers — shipping is harder to arrange, and prices go up.
Some importers are trying to hold prices firm despite the pressures. “Freight increases are not yet high enough to warrant price increases to consumers,” Sager says. But he, too, is feeling the supply crunch, with 40 labels out of stock in the company’s California warehouse.
The problem is especially acute on the Pacific side, Sager says, as shippers struggle to provide container space amid high demand for Chinese goods. “We have a container that was supposed to leave New Zealand in May, and it’s still sitting there waiting for a ship,” Sager told me on June 7. He’s now expecting it to arrive in the United States in late July.
The supply crunch is not just hurting the ability of importers to bring wine across the ocean. Bottles, cardboard, even printed wine labels are highly dependent on imports from China. Glass manufacturers were shut down in the early days of the pandemic, and it takes time to get those facilities and supply chains back to normal operations.
Labor issues are a factor, too. A lack of crane operators in France or delivery truck drivers in North Carolina can slow wines’ voyage to market, Touton says.
Nature is also limiting supply. New Zealand experienced an unusually cold growing season in 2021 that cut yield by about 40 percent. Severe frosts in several regions of France and northern Italy in April have decimated this year’s vintage before it even really started. Northern California and Oregon had dramatically low harvests in 2020 because of wildfires, and California is already facing drought this year. Those shortages will reverberate in months and years to come.
Right now, both Sager and Touton see the worst coming for consumers in late summer. “We anticipate a surge in demand over the summer, as restaurants reopen and we return to normal, but supply will be tight,” Sager says. Touton said he expects wines could increase in price by as much as 20 percent in the short run. So a $10 wine might cost $12 in September, and a $20 bottle could rise to $24.
Availability problems may ease in late fall as importers adjust to the supply chain woes. Both Sager and Touton say they are already placing holiday orders they typically make in September.
“We should be back to normal by early next year,” Touton says. “I hope.”
More from Wine archives: