Another amazing vintage came to Bordeaux, Burgundy, and Napa Valley in 2005. It was pretty close to perfect. As was 2009. All the while, a new phenomenon arose on the other side of the planet: the Asian awakening to wine, led by China. It hit the industry like a Mack truck.
Prior to 2000, the only people in Asia who drank wine from grapes (as opposed to rice wine) were the socioeconomic elites, and mostly in Japan. But around 2003, fine wine came into vogue with young professionals and business executives. Red holds a very important symbolic meaning in Chinese culture as the color of power, good luck, and wealth. People in Asia have begun to regard wine as the embodiment of these three traits.
As a result, wine has become extremely popular in the Far East in a short amount of time—so much so that, in 2015, China emerged as the sixth largest consumer of red wine in the world behind the United States, France, Italy, Germany, and the UK. Consequently, the demand for and value of rare French wine shot upward, which was good news for investors, but not-so-good news for aficionados.
In particular, the price of Burgundy wine rose exponentially, owing in part to the fact that it’s produced from such a delimited geographical area and by such traditionally minded winemakers. There’s a very limited amount of quality vineyards in Burgundy, and the cost of production is extremely high. On top of that, there’s no way for Burgundy producers to boost volume without bringing in grapes from another region, which would violate government standards and reduce their Premier or Grand Cru wines to the Vin de Pays category, which is a nice way of saying “table wine.”
Other outside factors affected the price of wine in the 2000s. For instance, oil prices rose, affecting manufacturing, packaging, shipping, farming, harvesting, and storage, inflating prices. So did the cost of grapes—the most expensive element in winemaking. Fortunately, the premium French wine market has stabilized in the past few years—the result of a cooling of Asian economies and dropping energy prices, to name a couple of factors. It’s quite possible, though, given the fickle nature of the Asian market, that California wines could suddenly become trendy in that part of the world—given how approachable and fruit-forward some of them can be. In contrast to many European wines, several California wines don’t require ten years or more to settle before reaching an optimum drinking window. This could turn the tables a bit in the years to come.
Another interesting phenomenon is the events surrounding the timing of the stock market crash in Hong Kong, a catalyst in the economic slowdown of the bustling Chinese economy. In 2015, Chinese consumers drank 7.24 million fewer gallons of wine than in the previous year. This phenomenon appeared after 5–8% year-over-year growth that suddenly halted due to the Shanghai stock market crash and an anti-corruption crackdown from Chinese dignitaries accepting fine wines as gifts. These “gifts” had immediate liquidity at local pawnshops and auction houses. For Americans, it would be inconceivable that these factors alone could cause a massive market trend to come to a grinding halt, but it did happen. Spirits – Scotch and American Whiskey in particular - a sharp incline, quite possibly replacing fine wine as the drink of choice.