Don’t look now, but it appears as if consumers are beginning to poke their heads out of the “bear” cave with thoughts of resuming life.  What they’re finding is a life that has become radically different.  Gone are the days of excess…..frugality is in.  Gone are the days of home equity functioning as an ATM.  Gone are the days when debt didn’t matter.  Today, all of this matters!   In the big picture, we as Americans, are challenged with the largest loss of wealth in 75-80 years!   Both common sense and history says that you just don’t simply rebound as if the event were a blip on the radar screen and it’s back to the good ole days.  While we avoided depression II, we have since learned that it came perilessly close.  In fact, it could be argued that if we did not have a Fed Chairman who was a true study of the Great Depression, we may have descended into that abyss (no political sermon here, just my opinion).  It took us a good twenty years and a war to recover economically from the Great Depression with many of our parents still shuddering from the impact decades beyond.  We are still in the embryonic stages of settling into an unknown economic  equilibrium that once established, may well last for the next decade or even two.  I would not at all be surprised to look back a decade from now to see that our economic growth was meager and job growth anemic….and we haven’t even broached the reality of debt repayment.  Why this economics 1A class?  Simple, we need jobs to generate income with which, in turn, we purchase commodities.  If there are less dollars available to us, we tend to purchase less or seek out less expensive alternatives or perhaps both.  I guess there is the alternative of adding more debt but I don’t think I have to go there.   As the local economy struggles to regain some footing, it’s heartening to see that consumer traffic is returning to restaurants and wine shops.  Several of the restauranteurs have shared with me in confidence that business has not only stabilized, but improved over last year in some circles.  Wine tastings and wine dinners seem to be well attended and traffic at many of the local vintner tasting rooms seems brisk as well.   But there can be no doubt that consumers are far more tentative and value conscious in their choices than at any time in the recent past.   The “big gorilla in the living room” question now is where do we, as wine and food enthusiasts, go from here?  What will the “next generation” of leisure wine consumers look like?

It seems, all but scripted, that the next generation and perhaps the one following, will be selecting their wines from the ”value” category.  Only the very fortunate will be able to entertain the higher end wines and that category is likely be redefined downward.  Even a more select group will have the privilege of competing at auction.  While new sources of money from countries such as China has  returned to the high end wine market stabilizing prices, I don’t believe the country can support the wine market on it own.   In addition, China recently hiked interest rates to tame its economy.

With job growth still contracting and unimaginable debt to repay, high end wines will be the last thought on the minds of the next generation.  I would argue that their discretionary income will continue to flow toward communication network and other tech devices whether it be iphones, ipods, blackberrys, X Box,m or Kindles.   Somehow, I just can’t imagine a twenty or thirty year old sacrificing the latest device for a high end bottle of Bordeaux.  For the consumer, however, this is not all bad.   The abrupt inventory excesses of grapes and wine accumulating domestically and abroad has translated into a value bonanza for wine enthusiasts.  The 2009 California 2009 grape harvest was one of most abundant in history, signaling continued downward pricing pressure on the mid and high end wines.  For the first time in a few decades, the wine is chasing the consumer instead of the other way around, a phenomenon that is likely to stick around for some time.  In a rather telling statement, one French agency concluded recently that with such worldwide weakness, the country must do more to cater to its own citizens as well as target exports.  They go on to describe the future wine consumer as casual and unfaithful (my read: they’ll search out the best value at any cost).   So for those of us who were fortunate enough to put aside a few gems many years ago, they will become a reminder of past excesses.  For the next generation, it’s ipods, ipads and oh yes, a glass of quality and value wine from their favorite restaurant or nearby wine shop.