How to beat rising wine prices

This post comes from Kelli B. Grant at partner site SmartMoney.

The glass looks half empty for lovers of California wine, as many wineries are expected to raise prices in the coming years. But experts say consumers can still hunt down a wide variety of cheap bottles.

Although consumers have been drinking more wine, California wineries -- which produce 90% of the country's wine -- haven't ramped up production, an imbalance that is starting to push up prices. The cost of Napa cabernet grapes rose 35% last year, even as the region's total grape supply fell 8% short, according to a report from Silicon Valley Bank.

"We went from a glut situation with grapes to a shortage situation," says Robert Eyler, the director of the Center for Regional Economic Analysis at Sonoma State University.

Experts say bulk prices are likely to keep rising, and consumers are starting to see those costs reflected on the shelves. Midpriced bottles may be roughly $1 higher by the end of the year; better bottles could see bigger jumps. Within a few years, prices are likely to be closer pre-recession levels.

"If a $30 bottle dropped to $20 during the recession, it's likely to creep back up to $30," Eyler says. Regions including Oregon and Washington may also eventually be in shorter supply as demand increases, notes Silicon Valley Bank.

There's no expectation that "Two-Buck Chuck," the Charles Shaw label that Trader Joe's supermarket sells in some areas for $1.99, will quintuple in price overnight, or even at all. On most bottles, consumers might see only modest hikes to start, says wine expert Natalie MacLean, the author of "Unquenchable: A Tipsy Quest for the World's Best Bargain Wines." "It's been about a 10-, 20-cent increase so far," she says.

Some wines may even get cheaper. In the Silicon Valley Bank report, about a third of winemakers said they plan to hold prices steady, and roughly 20% plan to drop prices. "Wineries aren't crazy," says Tom Geniesse, owner of Bottlerocket, a wine store in New York City. "They won't hit their fans with massive increases." (Post continues below.)

Still, lovers of bargain wines may want to consider regions outside of California or seek out more discount opportunities. Here are six ways to spot the latest vintage of bargains:

Stack coupons and sales

In states where supermarkets and drugstores carry wine, it's worth looking for store sales and coupons, says Teri Gault, the founder of price-tracking site TheGroceryGame. Most sales are on shelves but not advertised in the weekly store circulars, she says, so looking involves actually cruising down the aisle. Before Valentine's Day, for example, Fry's supermarket had $10 bottles of Beringer, FishEye and Redwood Creek wines on sale for $4.50. The Beringer also had a $1 coupon available, knocking its price to $3.50.

Try lesser-known varieties

"Experiment with indigenous grapes," says Geniesse -- for example, a malbec from Argentina. "People have discovered that instead of spending $30 on a rich California cab, they could do really well with a $15 Malbec," he says.

Other bargain options: monastrell from Spain, tannat from Uruguay, and touriga nacional from Portugal. Even in California, varieties such as zinfandel and syrah can be quality, inexpensive bets, MacLean says. "Syrah is excellent in California," she says. "The only reason it's not overpriced is because it's lesser known."

Experiment with regions

"Lesser-known spots tend to bring better value," Geniesse says. Chile has a climate similar to California's, he says, so its chardonnay will have similar profiles to one from California for a fraction of the price. Reds from Australia and Argentina can compare with some California cabs.

Stock up

Stores often give 10% to 20% discounts on cases, but experts say shoppers can save more by buying during the fall and winter. That's when the bulk of wine is sold, so winemakers and retailers offer more sales to stay competitive, says MacLean. "They've got no reason to have big sales right now," she says.

Shop flash-sale sites

A growing number of sites -- including Invino, WTSO.com and Lot18 -- offer a rotating selection of bottles at steep discounts. The sales last for a few hours or days, or until the wine sells out, whichever happens first. For example, WTSO recently offered Brookdale Vineyards Napa Valley Cabernet Sauvignon 2009 for $23.99, a 52% discount off the $50 list price.

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But experts suggest reading reviews carefully to avoid wines that were sold at a discount because they aren't great.

Visit a warehouse club

For midpriced bottles, prices at warehouse clubs are typically 30% less than at wine stores, Gault says. Even better, you may not need to pay for a store membership to shop -- in many states, clubs sell alcohol in an attached store with a separate entrance.

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