Month: December 2022

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What Can You Expect from Wine in 2023?

Economists are uncertain if 2023 will deliver a full recession to the U.S. economy or simply a slowdown, thanks to stubborn inflation, rising interest rates and the continued impact of the war in Ukraine and the pandemic. A lot of household net worth has been wiped out in the past 12 months, between the stock market and sinking home prices, not to mention anyone who invested in cryptocurrency.

For the wine industry, economic pain has already hit. Several industry sources report slowing sales in the final quarter of 2022, and many industry analysts expect the first six months of 2023 to be worse.

“Economists are factoring in strong odds of a recession,” says Stephen Rannekleiv, Rabobank’s global strategist for the beverages sector. “A slowdown seems more and more likely. Some consumers are already pulling back on spending.”

The last time the economy looked this grim (aside from the early pandemic days) was just over a decade ago, during the global financial crisis. But economic downturns are like snowflakes—no two are the same. So what can wine consumers expect from this one?

Patagonia Recession or Busch Light?

U.S. wine consumption has declined an estimated 1 percent in 2022, according to IMPACT Databank, a sister publication of Wine Spectator. California wineries report that tasting room visits are down. Even rare wine sales are slowing—the Liv-Ex 100, a London-based index of the top collectible wines, declined for the first time in 18 months in July, then again in October and November.

An economic slowdown will hurt wine consumers in different ways because those consumers buy different wines. “The divergence between lower price and higher price has never been wider,” says Rob McMillan, executive vice president for Silicon Valley Bank and head of its wine division. “We really have two different wine industries now.”

“This shows some signs of being a Patagonia vest recession,” says Rannekleiv. “Tech workers are getting laid off right now. At the same time, sales of Busch Light are growing as blue collar workers earn higher pay but are also paying more for everything due to inflation.” Lower income households are grappling more with inflation, as rising prices surge faster than rising wages.

But the premium wine sector, which means wines priced at $15 a bottle and up, depends on higher income consumers. While there have been layoffs in tech and a few other sectors, employment is still pretty strong and wages are solid.

But, as Rannekliev points out, higher income consumers tend to spend based less on their wages and more on their net worth. For most moderate and high income households, that means their investments and their homes. The S&P500 is close to finishing its worst year since 2008, down more than 15 percent. The sharp rise in interest rates has led to falling home prices.

The biggest factors keeping the economy moving right now are low unemployment and all the money people saved during the recession. Consumers are spending a lot of that cash now as they deal with inflation, and economists estimate it will dry up about six months into 2023. All of that means cutting back on luxury items, even everyday luxuries like a decent bottle of wine.

The Good News? Wine Prices Are Not Rising

A year ago, many importers and retailers were warning that wine prices would rise dramatically in 2022, just like most other consumer goods. But, for the most part, that hasn’t happened.

That isn’t because winemakers are enjoying lower costs. Just about everything in wine production has gotten more expensive, thanks to supply chain issues. Paper for labels has gotten pricier. A fire at a glass factory in Argentina left many producers scrambling for bottles. Fuel costs have been higher, particularly diesel, which is crucial for transporting wine around the country and the globe.

But most premium wine producers haven’t raised prices by much, if at all. The reason? Wine sales have been sluggish for much of the year, especially compared to spirits sales, and wineries didn’t want to risk raising prices and turning off consumers. “There have been price increases, but not enough to cover inflation,” says McMillian. Keeping prices steady while costs are rising is not a recipe for profits, but wineries seem willing to swallow some short-term pain rather than risk losing customers.

The Bad News? No Bargain Bottles

If there was a symbol for the wine industry during the last recession, it was probably a website called Wines Til Sold Out, a New Jersey retailer that blasted email accounts with great limited-time offers on premium wines. Wine lovers could buy some outstanding wines for 20 percent, 30 percent, even 50 percent off.

Don’t expect big bargains this time around, however. One reason is inflation—if wineries aren’t raising prices, even as they face higher costs, they’re probably not dropping them either.

The other big reason is supply. When the 2008 global financial crisis hit, wine regions in many countries had enjoyed several bumper crops. There was a lot of wine, and wineries needed to move it.

Today, wine supplies are relatively balanced. The 2022 growing season was just the latest in several challenging years for Europe, with record heat and dry conditions creating small harvests in many regions. In California, most wineries would be selling their 2020 vintage this year—a year when devastating wildfires blanketed regions like Napa in smoke during the crucial harvest months.

“Demand is weak but volume is low,” notes McMillan. “In past recessions, we’ve had over supply. When you have that, supply backs up quickly and everyone says discount. I don’t think we’re going to see that kind of behavior this time.”

That doesn’t mean there aren’t ways to save money. There are plenty of wines, often made by top wineries, that have received outstanding scores are are selling for less than the big luxury cuvées. In times of economic trouble, consumers just need to be smart.

Stay on top of important wine stories with Wine Spectator’s free Breaking News Alerts.

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Check Into Greece’s Coolest New Coastal Hotel

Courtesy W Costa Navarino / Marriott International

“Epic experiences, bold hotels, the hottest destinations”—luxury hospitality leader Marriott International has been busy rebranding some of the top properties in its W Hotels portfolio as W Escapes, and adding some cool new spots to the collection, which includes Aspen, Bali, Barcelona, and Punta de Mita, Mexico (among others).

Courtesy W Costa Navarino / Marriott International

And the latest and coolest is the new W Costa Navarino, the first-ever W Hotel in Greece. Situated between the Ionian Sea and the Peloponnese mountains in Messinia, Costa Navarino is one of the most unspoiled landscapes in the Mediterranean. And the beachfront W Costa Navarino, set on 32 acres with 1,500 feet of shoreline overlooking the historic Bay of Navarino, is its new jewel in the crown.

Courtesy W Costa Navarino / Marriott International

Olive groves, some with trees that are hundreds of years old, are interspersed with stone and wood structures, some with planted roofs, designed to evoke both a traditional Greek coastal village and a more contemporary beachside aesthetic, which harmoniously blends into the picture-perfect landscape and emphasizes the ocean views.

Courtesy W Costa Navarino / Marriott International

In landscaping the property, thousands of olive trees were repositioned rather than removed to ensure the integrity of the pristine environment that the region is known for. The stone comes from local quarries, the timber from local mills, and other elements are drawn from the surrounding area so that nothing seems incongruous or out of place; and the overall effect is one of unspoiled natural beauty.

Courtesy W Costa Navarino / Marriott International

The adults-only resort is meant to be “a place that fosters creativity, individuality, and freedom of expression,” and eco-consciousness pervades every aspect of the property.

“From upcycling materials to a bioclimatic design, W Costa Navarino features sophisticated architecture that leans into the broader sustainability efforts” or Costa Navarino, says Benoit Racle, Vice President of Brand Management, W Hotels Worldwide.

Courtesy W Costa Navarino / Marriott International

The goal, Racle says, is to “present international travelers and local tastemakers an opportunity to capture the energy of Mediterranean culture [with] world-class dining and immersive programming promising an unforgettable, one-of-a-kind experience,” be it at the beach, in the spa, or one of the impeccably executed bars and restaurants. 

Courtesy W Costa Navarino / Marriott International

With architectural design led by renowned Greek architects Tombazis and Associates, set off by the lush indigenous landscaping, the ethos is one of timeless, tranquil luxury and the serenity of being by the sea. And the first thing one sees when arriving at the property is a custom-made, giant W logo or “totem,” “crafted with reclaimed wood collected from old fishing boats” as a nod to Costa Navarino’s maritime heritage.

Courtesy Costa Navarino / Marriott International

“Infused with the unexpected, thoughtful design elements of W Hotels,” the interior design across the resort, including the public areas and the central culinary courtyard called Platía, a playful spin on the traditional Greek food market, was led by “London-based, globally focused” studio MKV Design, who brought a sense of European sophistication to the project while keeping it firmly rooted in local aesthetics.

Courtesy W Costa Navarino / Marriott International

The stunning architectural design of the hotel’s beach club Parelía was created by Tombazis and Associates and Athens-based K-Studio, with the latter also leading interiors at Parelía. The interior design at the seaside / poolside, sunset restaurant and bar, called Between, meanwhile was created by Interior Design Laboratorium as the ideal venue for cocktails and light bites, accompanied by live DJ sets and a cocktail menu focused on seasonality and simplicity.

Courtesy W Costa Navarino / Marriott International

All guestroom, suite and villa interiors are designed to “celebrate the heritage of Greek artisans with a palette of neutral tones [and] occasional with pops of color,” along with “modern yet refined interpretations of traditional craftsmanship,” can be seen in the lighting, flooring,” numerous referenced to time-honored Greek basket weavers, and even leather chairs that “offer a contemporary interpretation of regional saddle-makers’ art.”

Courtesy W Costa Navarino / Marriott International

The accommodation options at W Costa Navarino include swim-up rooms, adjoining rooms with a pool you can share with friends or family, high-end suites with private rooftop pools, and three bedroom villas with private beachfront pools as well, all designed to make every guest feel like a VIP. Service is excellent and totally competent without ever being intrusive.

Courtesy W Costa Navarino / Marriott International

“From the thoughtfully refined and locally inspired design, with a strong focus on art, to diverse and energetic programming, W Costa Navarino is ready to make a mark in the Mediterranean hospitality scene,” says W Costa Navarino’s General Manager Nassos Papazoglou. There are, simply put, no bad rooms or any public spaces that were overlooked or not given a carefully considered personality.

Courtesy W Costa Navarino / Marriott International

Designed to “relax and re-energize the body and mind,” the resort’s signature W Away Spa offers a variety of therapeutic treatments, including personalized massages that rival any five-star spa in Europe, while the fully equipped Fit gym features a heated 80-ft. lap pool of its own. There’s also a program of workout classes and wellness experiences designed for any fitness level, including beach boot camp, yoga sessions, meditation practice and Pilates.  

Courtesy W Costa Navarino / Marriott International

All with epic views to enjoy, W Costa Navarino is home to a number of curated culinary options. The sophisticated W Lounge, located off the lobby one floor above the infinity pool level, offers a “globally inspired menu alongside a range of palate cleansing spritzers, aperitifs and locally inspired, eco-conscious cocktails,” and it’s the perfect spot to take in the awe-inspiring sunsets.

Courtesy W Costa Navarino / Marriott International

The property’s beach club, Parelía, is set to be the new social hot spot of W Costa Navarino. It serves contemporary Greek Mediterranean cuisine, “focusing on delectable sharing dishes accompanied by unexpected cocktail collisions.”

With DJs playing a mix of genres alternating with live music throughout the day, Parelía “naturally evolves from a casual beach mood for swimming and unwinding, to a high-energy venue for late night fun, dancing and partying by the sea.”

Courtesy W Costa Navarino / Marriott International

The opening of the W Costa Navarino marks the next chapter in the evolution of one of the Mediterranean’s most desirable destinations. The Costa Navarino enclave, which has its own film festival and which has attracted the likes of A-listers including Willem Dafoe, Prince Albert of Monaco, Jean-Paul Gaultier and Brunello Cucinelli, now comprises five distinct sites featuring five-star luxury hotels, world-class private residences, and a total of four signature golf courses.

Navarino Dunes, the first to be established, is home to The Romanos, a Luxury Collection Resort, and The Westin Resort Costa Navarino, as well the luxury private properties Costa Navarino Residences. Navarino Waterfront is home to the new W Costa Navarino. Next up, Navarino Agora is scheduled to open in 2023, while Navarino Bay is set to welcome the Mandarin Oriental, Costa Navarino in 2023. 

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Author: Jared Paul Stern