What One Winemaker's Pricing Decisions Tell Us About Inflation | WSJ
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- čas přidán 6. 07. 2024
- The choice between absorbing rising costs or passing them on to consumers
Supply shocks, increased demand, and labor shortages are putting inflationary pressure on businesses. A Napa Valley winery provides a window into how businesses decide whether or not to raise their prices. Photo: Karl Mollohan for The Wall Street Journal
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#WSJ #Wine #Inflation
It’s hilarious that Cynthia told him to raise the price even before knowing what the price was
Bcus Cynthia wasnt one of his wine customer, but profit out from him.
Cynthia also is a glass bottle salesperson, not a winemaker or winery owner. Cynthia doesnt understand the impacts of inflation being transitory. Want a wine example? Shafer Vineyards in Napa. They have been charging $89 for their entry level cabernet now for a few years. Because of pandemic they raised that wine to $100. If Inflation cools down in 2022, that winery could regret it.
She said that because she was gonna charge him much more than pre-pandemic prices for glass bottles. Don't get what's so hard to understand...
She already knew what the price is because it’s published on his website. So she knows his price is lower than his competition. It was a leading question.
Can the wine be sold in the form of refill? It's done in Bologna and Modena. We have to deal with the empty bottles after finish it anyway.
This is going to sticky Inflation, all the restaurants are going to increase menu prices because of meat prices and labor shortage. This will be passed on to the consumer and we are not going to see the menu prices coming down after inflation decrease.
Absolutely, prices haven't decreased since probably pre WW2
Exactly. This is what bothered me. Once gone up the price and we will never see the price drop according to cooling inflation..
But the temporary fees put in by airlines went away after the disaster. Oh, wait.
Not even close to how inflation relates to prices. Inflation is a rate of increase and rarely (if ever goes negative). This means that even when inflation is decreasing, prices are STILL INCREASING! Just at a lower rate. i.e., prices do not go down. (This has happened only once in like 60 years outside of the pandemic year)
Economics is something that is studied, not guessed at. If it were this simple for the random person to guess, nobody would need to study any of it... we could all just guess correctly.
Times are tough...goes out to the vineyard in white pants... can't take this seriously
What color pants do you wear to get cheaper prices from your wholesalers?
You have to understand he only makes it out to the vineyard for interviews..
@@GibsonArtola well said
Wine makers don’t actually make the wine, they sell it.
@@Jackwagon you appear to miss the point here...but actually, you are incorrect as the definition of a winemaker is to make wine. This guy is an owner
Never trust a "winemaker" in white jeans.
Probably not a virgin either
why?
If he’s in white pants, he’s not spent a lot of time in the cellar or the vineyard.
This story is really about a producer who is trying to sell at a premium price when there is a global oversupply of the same product. Basically supply and demand.
None of these geniuses understand the correlation between higher prices and increase in the money supply by the FED.
Print money, pay people not to work, people spend free money, demand increases, supply crashes (from increased demand and lack of production), shortages happen, prices go up. Keep printing money, stop paying people not to work, demand decreases, supply stays crashed, prices stay the same.
Superb story, WSJ!
Wineries have become to large to consistently control costs. The price of a bottle of wine doesn’t come down when harvests are huge and the quality is usually poor. These are wine factories and yes, most, turn out an overpriced low quality product.
So logistic and shipping people are the one making the big bucks in this inflationary period.
No. Containers have doubled in price, the metals they are made from same story, the ores same story.
@@vadimniessen Exactly, they doubled the price for a same container. So who is making the double here? The metal, parts that making the containers and manufacturing in China hasnt gone up their price.
While many companies were crying when the government was talking about raising the minimum wage from $7.25. Now many of those same companies are offering $15 and up due to the Pandemic, and they are very well able to pay that much.
Yes, and they're also raising prices, so those wage's buying power is diminished. Big brain thinking right there.
Everyone gets $15 an hour and it won't buy the same amount of stuff as $7.25/hr... It's kind of like how there are 15 trillionaires in Zimbabwe.
The minimum wage actual hurts the poorest communities.
@@S2Tubes Yes prices are going up, but only a fraction of what it takes to pay higher wages, and some of the raise is absorbed by companies through efficiency. How do you think companies keep on raising the minimum wage. Stop defending greedy corporations and help the people, aren't you one of them?
@@JT-zw4df Everyone is getting, or close to getting $15, and as we did it before, companies can afford it, aren't those still in business? and for inflation ... it's part of the system. Zimbabwe is a totally different matter,. Mugabe has totally destroyed his country using politic, not economy.
Thank you for the feature @wsj!
Buy Australian wine. Great wine and a good way to upset China with their trade embargo. Win/win
and how does that wine then get to the US? you arrive at the same problem as the gentleman in this video.
@@Praseodymium59 Australia is a primary producer of glass. We don’t have those issues.
@@unknownuser6809 I'm suggesting the glass filled with wine must then be shipped to the US if a US drinker is to drink said australian wine
When you print so much paper fiat money, it obtains value when it is turned into something tangible, a Porsche, a house, or in this case, alcohol. Still remember the 2007-2008 round of recession when alcohol was in strong demand.
If bottles are so difficult to source, why not do what they did years ago and recycle glass bottles. Namely have customers return used bottles? Set up a central distribution centre for bottle returns. It’s a thought.
because its all smoke and mirrors. there are many alternative packaging available
Highly labor intensive
Business owners are cringing hard at this comment. "Have you thought of [obvious thing]? It's a thought."
Have local manufacturing. Glass making is not very labour intensive. Instead of importing from China, make it locally.
Thanks
Nice video.
I have a radical theory of money, inflation causes inflation.
I’ve had to deal with inflation by reducing my consumption, which hurts the economy if a lot of ppl do that.
Demand for most consumer goods has gone up. The only thing really taking a hit is commercial real estate.
I do the same. I now also eat only once a day
That's Stagflation
Wondering if there could be a way people could bring there own bottles to help and get the beautiful wine.
@Suzette "...bring -there- [their] own bottles..." there?
Being a grape grower I can do labour and have skill in grape growing but don't have money Wana work on NEPA valley
Our reliance for foreign imports really speaks how vulnerable our economy is
Plenty of countries import tons of goods without issue. Income disparity is a much bigger problem than importing goods
@@veganpotterthevegan yes plenty of countries import goods, but there is a difference in importance of imported goods. I don't see issue importing low security items such as food item we cannot produce or luxury items. But there is a huge problem when it comes to items where our whole economy relies on this resourse such as semiconductor chips or medicines. Private companies put profit over country's well being that they ship work to foreign countries for cheaper labor. Losing jobs is a big reason why there is a large income disparity in this country. Pushing for more domestic manufacturing will spur more jobs.
@@qwerasdfjkl1990 We've proven we're terrible at manufacturing many goods at a reasonable cost. Even with underpaying people. Trade isn't a bad thing. Every country has different strengths, that's ok. And it's not like we don't financially benefit from exporting goods too
Biggest problem is over consumption too. People need to tone down a bit.
Hey man I don’t have a problem with my daily bottle consumption of the duck horn merlot…I really miss my wife tho
@@BookofProverbs sorry to hear about your loss mate but chugging a bottle down isnt a solution. Everyone loses someone they love even what hurts is when they dont love you back even though you unconditionally loved them. I hope you come out stronger.
Stop calling it inflation, this is a supply shortage. Prices go up when demand exceeds supply.
Only if prices come back down afterward. When salaries go up, prices will stick.
@@andreasabels589 I'm betting that salaries and costs won't go up simultaneously for very long. Where is the money going to come from?
@@rustyschackleford5800 Costs are up already and salaries for new hires are rising sharply right now.
so how is your trade war going on? decouple anyone yet?
Watergate was the best time. Bob Woodward is a good writer.
haha, inflation in Brasil is more crazy
Ya , I know. Our whole geography book was focused Brazil covering topics like Economy, population, poverty, Geography, Problems etc.
thank the government
*used the guys muscular arms as thumbnail* whoever uploaded this knows what they're doing haha
Why will increase in price lose market share? If demand is there, then it won't. Just lower the price afterwards, people will love that even more.
That rarely happens though. That happens with commodity goods, not crafted foods/goods.
More screw-top-wine will be sold instead of corked-wine
If you're buying glass and cardboard in large quantities, why not try and sell it in smaller quantities, at a slightly higher price, to other wine makers?
interesting.
why cent we recycle wine bottles?
You can buy decent wine from La Rioja region in Spain here for like $10 a bottle. Where are you going with those profit margins?
Paying the mortgage.
Using a single luxury commodity for inflation analysis.
Its all transitory. We can always give people free money to help people out during these temporary tough times.
Bro its not transitory, That's just the fed making face,
Wine consumption has gone down in USA
He gotta raise prices at least 10%
Smaller bottles soon...
So what winemaker's pricing decisions tell us about inflation? ---> ??????? (Prices rise?)
You should consult Argentinian wine makers
If you add 50% water to your wine you can improve the flavor and smoothness and cut the price by 50%. Works great. In the old days no one drank wine straight. It was always cut with water.
You can also bake the leftover bottle drenched in milk chocolate at 350F for 20 minutes and serve it for desert.
Is this true or trolling? It makes sense tho
@@cursed_multicel We buy wine for alcohol, or we would by grape juice. The water really smooths the flavor of cheaper wines and takes the alcohol flavor out. Drink twice as much for the same price. At my age I need to slow down consumption and this works so well. Very smooth drink.
@@jackgoldman1 That's really interesting! I never considered doing that before. Cutting wine down to the strength of a beer is something I might try in the future. I go through bottles much too fast.
You know New York has some major wineries in Long Island area. California is not the only game in town!
Whaddya know. Those NYers tink of everything 😽
they have the same issues, not gonna help
@@Praseodymium59
That's interesting I didn't see anything on the net about that!!!
Wine plus ginger ale can make any wine taste good.
I should make a video about wine lol
Do a book/video/podcast, with an email chaser! 👍🏼😋✌🏼
@@gus473 lol that sounds like a business plan minus the capital. 😍
@@Thebreakdownshow1 YOLO! Hit 'em up for the cash, take a shot! There have been worse ideas that got funded....
But, sorry, I am all tapped out, don't drink, and get my email screened.... 🙉🙊🙈😉✌🏼
Prize the Fed and bureaucrats.
Better than deflation!
Uncle J Powell says not to worry about inflation. It's transitory, prices won't keep rising, it's all under control . . . ?!
The idea that port congestion, trucker shortages, equipment shortages, and capacity issues are transitory (3-6 month problems) and therefore pushing importers to decide to eat these costs until they come down may very well end up putting these companies out of business. Demand is not slowing so these problems will not go away. Personal income was up 1.1% in July and, since the start of Aug, supply chain issues have dramatically worsened as peak shipping season steams ahead. It seems this is a psychological tactic by the fed and economists to try and tamper inflation by having importers eat the costs for the time being and hoping supply side adjusts. I guess they've not done their homework in regards to the abundant and persisting nature of the issues within supply chains since the start of the pandemic. I see a scenario where the The fed will likely find themselves behind the curve and by the time these companies who've decided to eat these costs realize they're not going away anytime soon try to raise prices, fed will have to take away the punch bowl and demand will falter.
Raise interest rates
Step 1: Print money in 2020 because.... money cures COVID????
Step 2: Say it's different this time and totally won't cause inflation
Step 3: It's 2021 and act surprised it caused inflation!
Nobody is acting surprised. People are believing it would be transitory so maybe that it hasnt cooled down yet is surprising. I think 2022 we could see it finally come down specially if/when interest rates go up.
I always thought that was the plan
Accessible? put into a 2 Litre cask like Australian does.
Everything is scarce and expensive, jeez...
Prices are down in my currency… bitcoin
Glas from China?????!!!!! How about reusing all the bottles you already have in the US??? Oh wait, the US has never heard of recycling ;-)
I work in the packaging industry. There are very few glass manufacturers left in the U.S. most manufacturers went overseas. Metal packaging such as tin cans and steel pails are also going in that direction.
this is really important I think. what an incredible silver lining if covid results in the world moving away from unnecessarily shipping things all over the world, and inefficient reuse of appropriate commodities. finally some green policy action, albeit for a different motivation than preventing the terrible holocaust that awaits future generations
@@joeb5183 I just don't understand? Is it really cheaper to "produce new glas bottles" instead of just "washing/sanitizing" existing glas bottles? .
@@Praseodymium59 I just don't understand many things in the US... Many households are using throw-away plates for dinner, double bagged single use plastic bags for grocery shopping instead of bringing their own bags/baskets and so on...
I wish the quantity theory of money and Biden’s trillions in spending was mentioned. Wouldn’t demand be lower (which was the only condition this man said could positively impact the situation) if it wasn’t for that spending? Esp. in so far as it put extra money in people’s pockets?
🤣🤣🤣
Inflation is the result of the fed printing money out of thin air and devaluing the dollar in our pocket.
People, this is not hard, price goes up, buy beer, if beer goes up, drink water.... We won't die over this... Stop being spoiled rich kids...
Mr Amrani is sooooo hot! That is all! 🔥❤️😜
This is how far the news side of the WSJ has fallen. Please go back and re-learn milton friedman. Inflation is always and everywhere a monetary phenomenon.
Malek seems very genuine wish him all the best
Labour is hard to find . Are you kidding me? unemployment rate is all time high in many countries. labour is everywhere but no job for them. Recession hit hard and luxury product is the first to took effect how wine increase price its kind of not making sense . For what i know inflation is on only US cuz US is only country that solves every problem by printing bank note out increse money supply .US dollar is strong currency but not enough to stand this level of incresing in QE in this pandemic.
White pants.
Cause for fewer winos
👋
En Vino Veritas
🍷🍷🥂🍾🎉🤙
You can contract me. I am all available.
I would be curious to know how this guys business model performed during the four years that President Trump was in office.
fed say no inflation
It's called supply and demand. Low supply causes prices to rise.
Eine
Pyroterrorists will destroy the vineyards.
Well it is ridiculous that America have labour shortage, just open the Mexican border for one day or week and cheap labour flow into America. I don't think workers need to have a university degree to pick up some grapes
@Eren: Our Potato-in-Chief has the southern border open EVERY DAY. Millions(many with COVID) have flowed across that borders since Sleepy Joe has been President.
How did you Not know this? Are you watching too much Mainstream Media news?
@@ronmcmartin4513 My dear friend, I am not from States. I simply love wine and watch everything about wine. I might be watching too much mainstream media like BBC, though :). Refugees and immigrants are problem every part of the world however, in my country Syrians work in agriculture and Afghans became shepherders. They were beneficial when they were coming in small numbers but unfortunately they are flowing now.
@@erenkur3832--"unfortunately [immigrants] are flowing now" ...But they are being stopped at Your border, and made to show papers. That is not the case at our So. Border. No official paperwork required(unaccompanied children don't have paperwork; they just need a legal or illegal relative for release without real verification).
Adults are given Free Stuff, including hotel rooms, US$1100 Debit Card, and transportation to anywhere in the country with No subsequent tracing, for the "promise" of returning for their immigration court date, 5+ years from now.
It's not just the BBC. Our Mainstream Media doesn't report on this, because it makes Joe Biden look bad. No crime statistics, either. And you thought Afghanistan was a mess.
One vendor told me that Isreal uses intelligent technology to deal with sun and water and climate issues to produce consistently every year instead of crying about bad years.
If this info is true then USA must invest sensibly as well.
I don't know when the US gonna realize that printing dollars not only affect US but also the world. I hope every country switch to another stable currency .
EU and China (inclusive) are using Euro and RMB, because they want to break free from USD. However, trade with US stil involves USD, whatever country you are.
@@gold9994 is there any limit for US to print dollars?.
@@bestquotes2765 no limits. That's why majority of country are looking ways to get out of USdollar peg. That's why the digital currency and crypto are coming to play. US is looking for free lunch everyday out from the world, poor countries affected the most due to its weak monetary system where they are not able to defend the export of inflationary from US printing press. So US has been svcking every livelihood of these poor nations. Every one dollar US printed, it is exporting 80cent of inflation. Free 80% lunch!
@@bestquotes2765 no, they can do it as they want, the same as any other countries, but the global impact of USD is much larger, due to it's extensive use.
@@drewh3224 can you explain why countries accept this system?. Why china still using USD for trading and reserve currency. What happens if China and other countries used their own currency for trading instead of US. What is the maximum impact faced by US if China refused to trade with USD?. Is china taking any effective step to dump dollar?
15 i go to us invite me
What kind of accent is this?
I think it's English from Madeira or Malta, but hard to put my finger on it. I thought he was Cristiano Ronaldo at the beginning of the video.
He should invest in building his own bottle making company. If he does the math, he'll come out on top. Get with other winerys.
What’s the point if the video. To feel bad for the owner?
Just pay more
I get it’s capitalism and there is a pandemic but god forbid owner don’t make as much as before when they are already well off coz to many owners
Making 9990 instead of 10000 is like omg we r going to die
I wojld feel bad if they are new business like many restaurants were about to open before the lockdown in my area. Those I do feel bad
.You don't know nicotine'. Bing that second documentary. After that, force 13 others to do same. Please get back to us once you have a) taken a six day drive across Costa Rica including supermarkets locals have. b) when you ponder how childish a silly girl can be on the second or third date - begging for UGGS in May. Hadn't occurred to her the Mook had $20 to his name.
(nice vineyard, tend to it well)
It's time Americans should be thankful to China for producing cheap goods, this is what you get for bringing jobs back to America
SO NO INFLATION THEN?
👋