N.C. wine prices shift lower, but sales stay steady

The North Carolina wine industry seems to be immune to the country’s flaccid economy.
While some people may be less willing to buy expensive wine, dedicated wine drinkers haven’t stopped drinking wine – and the number of them is on the rise.

The industry is expanding every year, said Margo Metzger, the executive director of the Raleigh Wine and Grape Council. In the summer of 2004, there were 34 wineries in North Carolina, she said. Today there are 82, all of which are open to the public.

“It’s definitely a growth industry,” she said.

While the wine industry continues to expand despite economic hardships, the industry also continues to succeed in part because of an increase in the number of tourists who are visiting wineries and vineyards each day. People are discovering that a visit to a local winery or vineyard makes for a cheaper thrill then traveling far from home, said several winery and vineyard owners.

“People are looking for a social outing, but they don’t want to travel far,” said Ron Taylor, owner of the Lu Mil Vineyard in Elizabethtown.

Taylor reported that his sales rose 7 percent in January. He said people don’t have as much expendable income and want to travel to a place that can be reached in a single day.

That statement is consistent with a report from the N.C. Economic Development Guide, which said the Biltmore Estate in Asheville now hosts 1 million visitors annually, making it the most visited winery in the country.

But it’s more than that, according to Dana Keeler of Silver Coast Winery in Ocean Isle Beach.

“Wine has become a part of everyday life in America,” he said. “Everybody’s tightening their belts a little, but they still want a glass of wine every night with dinner.”

According to the London-based International Wine and Spirit record, if trends continue the United States will be the largest consumer of wine by 2012.

However, Keeler also said his winery has dropped 20 percent in sales revenue, even though the volume of wine sold has remained the same.

“This reflects a shift from higher-end, more expensive products, to your moderate-priced everyday products,” he said.

Several people who know the wine industry agree.

“People are taking a step down in terms of the price of wine,” said Metzger.

And that is a challenge for North Carolina, where domestic wines tend to be more expensive because they are not mass produced, she said.

Despite an increase in the costs of production and the downturn in the amount of profit his winery is turning, Keeler will not raise his prices, he said. Because of the market shift to value products, it would be “unwise,” he said.

“People don’t have the money to spend,” said Dave Hursey, owner of Lumina Winery on Gordon Road in Wilmington, when asked whether his prices would rise, “but I want people to keep coming to see me.”

Hursey said in January he sold 179 liters of wine, down from the 194 liters during the same time in 2008. One hundred liters of wine is approximately 130 bottles.

Despite the downturn, Hursey said, business is still strong.

In 2008, Jonathan Fussell of the Duplin Winery in Rose Hill, posted on his blog that the price of Duplin wine would increase 6.5 percent in January 2009.

But later he decided against the price increase and said, “This year I think we are struggling too much as a group to raise the price of wine.”

Metzger agreed, saying, “They don’t want to alienate their customers at a time when they need a break.”

North Carolina produces about 1 million cases of wine each year, Metzger said, and with more wineries entering the fray, this amount is likely to increase. As more wine is produced in the state, the price will actually drop, she said.

Metzger also said an increase in the price of European wine may have pushed people to start buying locally.

“People want local-grown and natural products,” said Taylor, whose Lu Mil Vineyard has expanded so much that he has recently been able to invest in new capital, such as new buildings to make jams and jellies. “There are still opportunities, but you got to be flexible and patient.”