WOODINVILLE, Wash. -- Washington is awash in wine. So, at a wine Mecca like Seattle's Metropolitan Grill, you can understand how a shortage of vino is a bit tough to swallow.
“I can't understand how a shortage of wine grapes could be for real,” said Nancy French, as she sat with a glass of cabernet during lunch.
It’s hard to believe, but apparently true. Industry analysts say global wine production peaked in 2004 and has been steadily declining ever since. A new report from Morgan Stanley shows there was an undersupply of some 300,000 cases last year. That’s the worst in nearly half a century.
Europe makes most of the world’s wine. Supply there is drying up due to several reasons, including poor crops in recent years. Demand, however is growing exponentially in the U.S. and especially Asia.
The lack of production elsewhere is opening the door for Washington wineries to enter thirsty markets like China, which will soon suck down a billion bottles a year. Woodinville's Chateau Ste. Michelle is the biggest winery in Washington and is hard pressed to meet the demand.
“We’re making it as fast as we can grow the grapes,” said CEO Ted Baseler. “Right now we have about 50,000 acres in the state. I can foresee that we could have as much as 150,000 or more.”
Back at the Metropolitan Grill, the wine cellar is more like a gold mine. Demand for fine wine is so high in Asia, tourists regularly ask to buy bottles in bulk to bring back home and sell on the black market.
“If it's one bottle, it's one thing, but when it's three or four -- and these are $600 or $800 bottles of wine -- that red flags it,” said manager Tom Kneeland. “We have to tell them no. We keep it for our customers to enjoy with their steaks.”
With the buyers trending toward better, more expensive wines, many vineyards are making fewer “bulk wines” and focusing more on expensive varieties. That means the so-called "global shortage" will be felt most by folks drinking low end wines though higher prices and fewer choices.