From the increase in mortgage loan defaults to the roller coaster of a stock market, all the grim economic news might make you want to hit the bottle.
But with a weakening American dollar, one Euro is now equivalent to $1.57, so finding solace at the bottom of a glass of imported wine at Chicago restaurants and retailers might be a costlier endeavor.
The weaker dollar is expected to force European producers, many of whom had previously absorbed back price increases in the hopes that exchange rates would stabilize, to raise prices on their wines this year.
“A lot of European suppliers priced their wines in dollars to ensure stability, but that only solved problems over the short term,” says Seth Allen, owner of Chicago importer and distributor Vin Divino. “Over the long term, with the kind of fluctuation we’ve been seeing, it’s not sustainable. The dollars just don’t go as far as they used to.”
Alpana Singh, director of wine and spirits for Lettuce Entertain You Enterprises, expects prices from vendors to go up between 10 percent and 30 percent “depending on the importer and how they structure their deal.”
“We’re relying on our purveyors to negotiate as much as possible so that we can still protect the customer,” Singh says.
Michael Thompson, general manager for Signature Wines, a division of distributor Southern Wine and Spirits, which sells luxury European wines to retailers like Whole Foods and to restaurants such as Charlie Trotter’s, says in the 18 years he’s been in business, he’s never seen the exchange rate rise this rapidly.
As a hedge, Thompson says Southern has been buying up extra containers of wine before big price increases to ease the pain.
Josh Kaplan, general manager for mk restaurant, says distributors are raising prices on wines from the same vintage, something he hasn’t seen in the past.
“I just had a Pouilly Fume that we’ve been selling come in at 80 dollars higher per case [than earlier this year]. That’s painful,” Kaplan says.
Thus far, though, increases have, for the most part, been gradual or focused on specific categories.
Brian Duncan, wine director for Bin 36 and A Mano, has seen some hikes, “but not these huge jumps.”
“The difficult category is Champagne,” Duncan says. “I had a flight where we didn’t offer French Champagne. I had a note on the menu saying we won’t be able to offer it until prices return back to some kind of sanity.”
But despite the price pressures on retailers, distributors and restaurateurs, most see real doom and gloom as far off. “Don’t do the Chicken Little. There’s plenty of value out there,” says Charles Stanfield, the Champagne specialist for Binny’s. “Champagne, because of its fixed situation, has never been the most price stable, but I can show you plenty of great Champagnes under $30.”
Many see this as an opportunity to get creative and offer more value to the customer by introducing less familiar wine regions and varietals.
“Don’t be surprised if you find wines from Greece or the southwest of Spain or the Languedoc-Roussillon on menus,” Singh says. “We put Malbec on our list because we couldn’t find Cabernets that were a good value for the price point. Now it’s Petterino’s No. 2 selling red wine by the glass.”
Lance Marshall, manager of the Halsted location of Lush Wine and Spirits, has been introducing customers to “new stuff like big red blends of Grenache or Tempranillo or Carmenere from South America.”
Todd Hess, partner of H2Vino, a local distributor that sells to Binny’s, Sam’s, and restaurants such as Nacional 27, sums it up best: “A year ago, people were confident we could ride this thing out, but now people aren’t so sure. They’re watching their dollars more carefully, but also making more sensible and creative choices with their wine.”