Increase in wine purchases means increase demands for wine storage solutions.
The wine storage business experienced a measurable uptick during the pandemic-induced, wine-buying boom. Both at-home and off-site wine storage have reported sales increases between 15 and nearly 50 percent.
“Pre-pandemic, our business was growing 10 to 25 percent, depending on the year,” says Charles Malek, CEO of VintageView Wine Storage Systems in Denver. But starting in May of 2020, his company’s transactions were 48 percent higher than in previous months. “In 2019 they were $11.7 million; in 2020 they were $12.9 million; and in 2021, year-to-date, we are up about 35 percent—between $15.5 million to $17 million,” says Malek.
Malek comments that though VintageView had several residential clients pre-pandemic, the company’s largest purchases were made by restaurant owners. But today, “More consumers are getting into the wine storage game.”
Consumers Expectations: Convenience Plus Bells and Whistles
Wine Enthusiast’s catalog reported robust wine storage sales, from smaller at-home units to custom cellars. “Customers are seeking a minimalist look with maximum quality, including metal, glass and lighter wood, better lighting and more technology,” says Marshall Tilden, Wine Enthusiast vice president of sales & wine education. “Everything is about displaying the wines to show off their bottles. Custom glass enclosed wine walls or rooms are in demand.”
Wine consumers are spending anywhere from $2500 for a small, freestanding cabinet holding up to 200 bottles to $20,000 for a custom cellar that also require additional labor and installation fees. “People are putting cellars in every part of their house. Dining room and entertaining areas remain popular, but we also have customers building a wine cellar under their stairs and in closets, spending around $10,000 for customization,” says Tilden.
Off-Site Storage Continues Steady Growth
“Business has increased marginally, less than 10 percent. Our customers tend to be long-term collectors who request larger spaces because they keep accumulating wine. We have just under 100 lockers that can accommodate up to 500 cases. I could use another 100 lockers right now,” says Kevin Jones, founder of Liquid Assets Cellars.
Space has always been a premium in cities like New York. “Our customer base—private collectors, auction houses, and a curated list of trade tastings—is resilient financially. Any hardship caused by the pandemic was relatively short-lived,” says William Tornabee, chief financial officer for Manhattan Wine Storage. “Client behavior did shift because of COVID, but the old maxim holds true: people drink in the good times—more in the bad.
Increased Demand Brings Challenges
Labor shortages, soaring costs for raw materials, and shipping delays have created challenges. Prices for lumber and refrigeration parts have skyrocketed 15 to 40 percent, according to Malek. “Another challenge is shipping,” he adds. “For every three ships going to Asia, only one is coming back. It is also hard to get empty containers, and the price has gone up anywhere from 4-6 times.”
As a result, custom wood wine racks that used to take four to eight weeks to ship, now take anywhere from eight to sixteen weeks to ship. “We have had to reset customer expectations. It can be a difficult conversation,” says Malek.
Virtual Storage: Another Option
With space and raw materials at a premium, another option is virtual storage. Underground Cellar is an e-commerce platform that allows customers to store up to 500 bottles at its Napa Valley wine cellar and ship wine on demand. According to Jeffrey Shaw, CEO and founder, the company has grown nearly 1,500 percent in the last two years, with 70 percent of monthly revenue coming from returning customers.
“We believe the future of wine storage removes the wine out of costly and difficult-to-maintain, in-home wine cellars into ones managed virtually. Customers can buy bottles over time, and then mix and match to build cases to ship anytime they want,” explains Shaw.
Shaw also comments on a shift in consumer behavior—they’re not just purchasing wine as a consumable good, but “as an asset class.” “Just as someone watches the value of their stock portfolio fluctuate over time, so too can they watch the value of their wine portfolio increase over time,” he says.
But unlike shares of a stock, you can drink your investment—on-demand.
Melanie Young produces and hosts The Connected Table Live and The Connected Table Sips podcasts featuring conversations with global thought leaders in wine, food, spirits, and hospitality, and Fearless Fabulous You, a lifestyle show for women. The Connected Table LIVE is ranked #4 in Feedspot’s Top Food & Drink Podcasts for 2021. Her articles on wine and spirits and the business of wine have been published in Wine Enthusiast, Wine4Food and Seven Fifty Daily. Her food articles appear in Santé Magazine. For 20 years she ran M Young Communications, a culinary marketing and events agency in New York, and advised many global wine organizations and businesses. During that time, she was responsible for the launch and management of The James Beard Foundation Awards, serving as the Director for 16 years. Melanie is a member of Les Dames d’Escoffier International, the Wine Media Guild and Women of the Vine & Spirits.