Monthly Archives: January 2026

Who’s Gaining Ground in the U.S. Wine Market? Georgia, Naturally

January 27, 2026 By in emerging wine regions, wine, wine history 2 Comments

The opening scene of season eight episode one of the insanely popular Netflix series “Somebody Feed Phil” finds our hero, Phil Rosenthal, breaking a sweat in a Georgian vineyard, trying (and failing) to keep up with the women who are working around him.

Although much of the action takes place away from the vineyards in Tbilisi, the Georgian capital, wine is never far below the surface and it often takes center stage. No surprise. Georgia’s traditional amber qvevri wines symbolize the qualities of Georgian people and culture, rooted in tradition, drawing on deep reserves of resilience and determination. Somebody Feed Phil is really a show about family (don’t you agree?) and wine is integral to Georgia’s family life.

You might be surprised to find Georgian wine on Netflix. If so, you would probably be even more surprised to learn that many of the show’s viewers probably reacted by saying, Georgian wine? I’ve tried that. And I like it.

Georgia, Naturally

Georgian wine is on the rise here in the U.S. market, albeit starting from a relatively small base. Wines of Georgia reports that Georgian exports to the U.S. have increased at a 15.5 percent compound annual growth rate from 2021 to 2024. That’s impressive growth under any circumstances, but especially noteworthy given the overall decline in the U.S. market. What’s behind this phenomenon?

Part of the answer is that Wines of Georgia and its partners are working very hard to tell the story of Georgia, with its 8000 years of wine history. The current campaign, “Georgia, Naturally” draws inspiration from Georgia’s reputation for natural wines (made in the traditional qvervi clay vessels). It does not hurt that images of Georgia highlight the qualities that make it a popular nature and adventure tourism destination.

Wines of Georgia is investing heavily in education programs in the U.S., working to bring Georgian wines and their stories to dozens of events across the country. That’s why I think that many Netflix viewers won’t be discovering Georgian wines for the first time.

Hurdles and Headwinds

Distribution is a major hurdle for imported wines and that is perhaps especially true for small-production wines from unexpected places made with unfamiliar grape varieties. Some Georgian producers have apparently addressed this dilemma by forging partnerships with Total Wine & More through its Winery Direct program.

Our local Total Wine store lists 41 different Georgian wines (most are Winery Direct products) in its inventory. Isn’t that amazing? There is a particular aisle in our local store that features wines from off-the-beaten-path areas and Sue jokes that it has become the Georgia aisle in recent months. Being on the wine wall doesn’t guarantee success, but it is hard to sell what isn’t there.

Sue and I visited Georgia a few years ago for a United Nations wine tourism conference. We arrived full of questions and with a few doubts, but we came away persuaded (you can read about our adventures here). We were impressed with many of the qvevri wines because of the tension we sensed in each glass. They really tasted alive.

But we also learned that there is much more to Georgian wines than we expected, both in terms of style and the many (hundreds!) of indigenous  grape varieties that, like Georgia itself, have survived through the centuries. Resilience is an important Georgian quality.

Bubbles, Amber, Red

Sue and I recently hosted a Georgia-inspired dinner for friends who have a particular love for and appreciation of these wines. We tasted three wines. We started with a Mtsvane Estate Pét-Nat from Kakheti, a bright sparkling white wine. This is the second Georgian sparkling wine we’ve sampled (both from Mtsvane Estate) and both were delicious.

Next came the 2023 Vazisubani Estate 3 Qvevri, a blend of the indigenous Rkatsiteli, Mtsvane, and Kisi grape varieties. Fermented and aged in qvevri, this “white” wine is really amber from the extended skin contact and a bit of a trickster. The color suggests strong flavors but the wine is quite subtle in the glass.

The hit of the evening was the 2021 Vazisubani Estate Saperavi Qvevri. Saperavi is the Georgian grape that is probably best known here in the U.S. market (thanks in part to Finger Lakes pioneer Dr. Konstantin Frank, who introduced the  Saperavi grape to the U.S. many years ago). This wine was the perfect complement to our meal and, because Vazisubani Estate is part of Total Wine’s Winery Direct program, it is widely available. (Our particular local store, however, was “sold out” when we last checked.)

Saperavi is a good place to start, but the amber qvevri wines might be where you want to finish because these seem to be the wines that Georgians drink most of all (as you can see in this video trailer for a film called “Our Blood is Wine.“)

 

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But wait. There’s even more!

Georgia was the focus of season six, episode three of  the popular video series “V is for Vino.”  You can view the episode here or on the V is for Vino YouTube channel.

Dark Clouds and Silver Linings

January 20, 2026 By in Unified Wine & Grape Symposium, wine, wine history, wine markets Leave a comment

I have been busy getting ready for next week’s “State of the Industry” session at the Unified Wine & Grape Symposium in Sacramento. The theme of the Unified in 2026 is “Reframe the Narrative.”  There was a lot of bad news about the wine business in 2025. Where are we headed in 2026 and beyond? How can we get out of this rut?

This is my 15th consecutive year on this panel and I thought it would be interesting to look back at my first presentation, which was in 2012. It took some fiddling to find the files, but here are the slides I presented back then along with my unedited and very rough presentation notes.

If you take a few minutes to read through this material, you’ll notice that while the wine business environment was very different back in 2012 in terms of the headlines, many of the detailed concerns were similar to today. Margins were tight then, for example, and tight now, too, but for very different reasons.

Economics is called the dismal science, so I suppose that dark clouds and silver linings are always on the cards. The more things change the more they stay the same in that regard. I think my final point (Boulding’s Law) has held up pretty well, don’t you? Here’s my 2012 report.

The State of the Wine Industry 2012: A Global Perspective

I study globalization and wine so I am here today to start off this session with a global perspective on the state of the industry.

Wine has always been a global industry, or as global as trade barriers and transportation costs allowed.

It is not an accident that when David Ricardo wrote his economics textbook almost 300 years ago, the example he used to illustrate international trade was the wine trade.

It has always been important to have a global perspective on wine but now more than ever. The wine world has become a tight little world where international and global effects cannot be ignored.

Today’s session will have a good deal of good news — a lot more than in some recent years. As an economist, however, it is my job to channel Alan Greenspan back when he warned about the dangers of “irrational exuberance.”

Silver linings do not always come wrapped in dark clouds, but sometimes they do. And it is important to understand them and to think strategically about them.

A Dangerous Phase

One silver lining is growth. The US economy should continue to grow in 2012, although perhaps more slowly than in 2011. And the wine market should continue to recover.

But the dark cloud that surrounds this is the global economy, which has entered a “Dangerous Phase” according to the International Monetary Fund. The global economy will grow this year but more slowly than before and with the largest single economic area — the European Union — likely falling into recession.

GLOBAL GROWTH SQUEEZE

And so economic leaders will be desperately looking for growth … and where will they find it? Consumers do not seem able to carry the load, especially with the housing crisis still unresolved.

Business investment is also inadequate due to poor future expectations and tight credit market conditions.

Government is handcuffed by its own debt and politically gridlocked as well.

So this leaves exports and we can expect nations to push for every competitive advantage for their products to try to grab the growth they need.

EXCHANGE RATES

This explains why exchange rates will be especially volatile in 2012. The US has successfully run a secret “weak dollar” policy for the past few years and now other countries are following suit. Competitive depreciations or currency wars are likely as more countries try to use exchange rates to grasp the growth they desperately require.

WILD CARDS

There are many wild cards that could turn dark clouds into silver linings or vice versa. The most troubling wild cards are the US and the European Union. Will US growth stall? And how will the election affect economic policy?

The questions are even more serious for Europe. How deep will the recession be and will Germany be part of it? And, of course, will the Euro survive in its present form? Big questions.

A Tight Squeeze for Wine

This combination of silver linings and dark clouds will create a Tight Squeeze for the wine industry. Let me explain how these pieces fit together.

A TIGHT SQUEEZE FOR WINE

These global economic factors in combination with the particular dynamic of the wine industry produce the conditions for what I am calling a Tight Squeeze for wine.

INCREASING COMPETITION

Competition is increasing all along the supply chain. There is more competition for wine grapes and bulk wine and more competition as well for those markets and market segments high decent margins.

THE BIG SQUEEZE

Wine maker margins will feel A Big Squeeze.

You will hear a lot today about the competition for wine grapes and bulk wine. Short market conditions are pushing up prices in many key market segments.

Wine producers naturally want to pass along higher costs to consumers but this is problematic in many market segments. Slow economic growth combined with buyers who see discounted prices as the new normal means that some producers will be squeezed out of some markets because of shrinking or even negative margins.

The squeeze will put increased emphasis on lower cost alternative sources of grapes and bulk wines and on those brands and market segments where margins can be maintained or perhaps even increased.

CURRENCY SHIFTS

The exchange rate shifts I talked about a minute ago will impact the Big Squeeze in several ways, creating both silver linings in the form of lower import costs and also dark clouds due to greater import competition.

The dollar is likely to continue to increase in value, but exchange rates are the most difficult thing to predict in economics and it is impossible to tell for sure how individual currency values will be affected. There will be silver linings for some, I’m sure, and clouds for others.

WILD CARDS: CHINA

There are many wild cards in the Big Squeeze scenario, but the biggest is certainly China. Economic growth will slow this year in China, but how much? The worst case scenario would be for Europe’s recession to be deeper than expected and the US recovery to stall. In this case China’s growth could fall dramatically.

How would this affect wine? Well, the direct effects would be rather small I think – slower growth in an otherwise rapidly growing market.

But the indirect effects would be significant. If China’s industrial production slows so would its raw material purchases, which would hit the Chilean Peso, Australian dollar and perhaps the South African rand particularly hard.

What’s the Best Way to Prepare for the Future?

And finally I suggest for your consideration Boulding’s Law, named for Kenneth Boulding, the great economist. Boulding once conducted a study of the history of the future — he looked back in history to see what people thought would happen in the future and then he fast forwarded to find out if they were right.

His conclusion. When the future finally came around, people were generally surprised — even when it was exactly what they expected.

Hence Boulding’s Law: the best way to prepare for the future is to prepare to be surprised!

The Deion Sanders Theory of Wine Markets

January 13, 2026 By in Supply and Demand, wine, wine markets 10 Comments

Cyclical or structural? That was one of the most-asked questions in the wine business when everyone gathered for the Unified Wine & Grape Symposium in Sacramento last year.

Was the decline in sales due to a structural change? There were a lot of structural shift theories including generational change (bye-bye, boomers), heightened health awareness, affordability (a hot term right now), and more.

Other analysts, however, viewed the problem more in cyclical terms. The wine industry experiences periodic booms and busts. And consumers go through life-cycles, drinking less wine when young, more as they mature, and then less again when they start to “age out” of the market. Maybe we are just caught in the down-cycle and things will turn up if we give them time.

The Deion Sanders Theory: Both

A year later the answer looks clear to me. Structural or cyclical? The answer, which I am stealing from a 1995 Pizza Hut television commercial starring Deion Sanders and Dallas Cowboys owner Jerry Jones, is simple: Both. [Click on Deion’s image above to see the video.]

This looks to be the most serious global wine industry crisis in at least a generation, so maybe it is no surprise that it isn’t the result of a single force, but the “perfect storm” phenomenon. Certainly all of the structural shift concerns are at work and warrant attention and I’m not sure we have fully figured them out yet.

But this year attention has turned to the cycle problem in part because we can see it happening right in front of our eyes. But can we do anything about it? The problem is that the existence of large inventories has discouraged wineries from buying grapes and making wine. Vines are being grubbed up in California and around the world in response to the production decline.  Inventory cycles may even result in a shortage of wine grapes in a few years, which will be a strange sight after the recent surplus. A shortage? Read on.

Econ 101 and All That

The role of inventories in the phenomenon of business cycles was part of the syllabus when I first studied macroeconomics. The logic went like this:  Suppose there is an exogenous shock that reduced overall demand (see structural shift above). This leaves businesses holding unplanned excess inventories. They respond by reducing new orders (which deepens the decrease in demand) until stocks are depleted.

One characteristic of decentralized markets, and the factor that tends to make cycles repeat themselves, is the phenomenon of overshooting. When firms draw down inventories, they tend to wait too long to stop, creating a shortage. And when they build up inventories again they overshoot on the up side, too. This isn’t a strategy. It’s just what happens when you have to guess where the bottom and the top of the cycle are. And that’s a serious concern now, that today’s surplus could turn into a shortage in a few years.

Stocks and Flows

Right now we have large inventories in many parts of the wine market. Some wine producers have so much unsold inventory from previous vintages that they made very little (and sometimes none at all) in 2025. They won’t fully return to the grape markets until those surplus stocks either sell out or “age out.”

And, to be honest, some wine consumers have accumulated pretty big inventories, too, and don’t really need to buy a lot of wine in the short run. Wine production (which economists call a flow variable) won’t start to rise until inventories (a stock variable) have fallen for consumers, retailers, distributors, and producers. When that will happen is hard to predict, but it is the biggest question confronting the industry today.

The impact of high inventories and relatively low sales is a wine problem, but not just a wine problem. Jim Beam, the famous Bourbon producer, recently announced that it was pausing production for a year (a year!) to allow time for excess  inventories to decline to a sustainable level. And apparently there is a glut of Scotch whisky, too.

What Would Deion Do?

What will the market look like when stocks and flows are back in equilibrium? Not like it did before. That’s because of the structural shifts that have taken place. The U.S. wine market will be smaller and different, but it will still be there.

So what should we do? Focus on the structural elements as many did last year? Or try to guess how the cycle will play out and develop strategies accordingly? I don’t know what you are going to do, but I think I can guess how Deion would answer that question.

Both.

2026: The Year to Change the Narrative about Wine

January 6, 2026 By in wine, wine markets 3 Comments

Welcome to 2026. It promises to be a year filled with both celebration and anxiety. Anxiety is understandable given the many unpredictable political and economic forces at work both here in the United States and around the world.

2026 is a bit like this illustration from the Economist newspaper’s annual review, The World Ahead 2026. The ball’s in play and anything could happen: war, peace, boom, bust, success, failure. It’s (almost) enough to drive you to drink something stronger than wine.

A Year to Celebrate?

Anxiety is easy to understand. But what about the celebrations? Well, several important anniversaries will be celebrated in 2026, some with more enthusiasm than others. Economists like me, for example, will celebrate the 250th anniversary of the publication of Adam Smith’s book An Inquiry Into the Nature and Causes of the Wealth of Nations. Smith’s Invisible Hand has inspired many to embrace the power of markets and provoked others to oppose them, but its influence is difficult to deny.

2026 is also the 250th anniversary of the signing of the Declaration of Independence in Philadelphia, an act that gave birth to both the United States of America and to a set of ideas with global implications.

1776 was quite a year. Wealth of Nations and the Declaration of Independence fundamentally reframed how we saw the world.  We are still feeling the aftershocks of those events today.

Reframing the Narrative of American Wine

2026 is the 50th anniversary of an event that sent shocks through the world of wine: the 1976 Judgment of Paris, which has been documented in George M. Taber’s famous 2005 book and popularized in a fictionalized 2008 film called Bottle Shock.

Taber, a Paris-based reporter for Time magazine, got wind of an unusual event. A panel of French wine experts was going to compare flights of California red and white wines with roughly similar French wines. The judging would be blind and the result was sure to be a triumph for the French. But if even one California wine did pretty well, there might be a story in it. So California-born Taber got the editorial OK to check it out.

The result, as you probably know, was indeed newsworthy (Taber got the scoop because he was the only journalist there). The top red wine and the top white wine were both from California. What a scandal!

If you analyze the data of the judging closely, as economists like me are prone to do (see “Wine by the Numbers”), the victory of Team California over Team France is not completely clear. But this much is very clear. The Judgment of Paris changed the narrative about California versus France and New World versus Old World.

Fresh Thinking Spreads

The biggest change was in how Americans thought about their own wines. How could the French be wrong about wine? Maybe the critics who had been promoting California wines (with limited success) were right? Interest in California wine, already on the rise, was magnified and accelerated.

The French were also impressed. Maybe not the average French wine drinker, but certainly some people at the top of the industry. Investment by French winemakers in California vineyards and winemaking facilities, already on the rise (Domaine Chandon was founded in 1974), was magnified and accelerated.

As Taber explains in Judgment of Paris, new thinking spread to wine regions all around the world. If California wines are actually very good, maybe we can learn something from them to make our wines world-class, too. The rise of quality winemaking, already under way in many regions, was also magnified and accelerated.

Time to Reframe the Question Today?

It is never easy to change the way people think about the world, but the situation today is more difficult in some ways than ever before. When Taber wrote his Judgment of Paris story (and when Morley Safer made his TV report on the French Paradox) mass communications were much simpler. There were a few magazines that millions of people read every week (Time and Newsweek) and a few TV programs that pulled in viewers every week (60 Minutes).  Do you think a magazine article or television program would have the same effect today?

The news cycle was slower in the past, too. An idea might be talked about and turned over in discussion for days or weeks (or more). Ideas today are chewed up and spit out pretty fast. I’m not saying that it is impossible to make a lasting impact, but it is an upstream swim all the way.

It may be hard to change the narrative about wine, but that’s not a reason to give up on the idea. “Reframing the Narrative” is the theme of the 2026 Unified Wine & Grape Symposium, North America’s largest wine industry meeting. I hope everyone who comes to Sacramento at the end of the month is ready to pitch in.