After a rough holiday season in 2008, wine outlets in the two-county region are expecting better days this holiday season.

During the week before Thanksgiving sales remained relatively strong compared to last year, when consumers pulled back on purchasing wine as the recession took hold.

But so far, sales just before Christmas have been moderate or even down slightly from last year, according to several stores and wineries surveyed by The Business Press.

"This holiday season has been up and down so far for us," said Fred Paciocco, owner of Pacific Wine Merchants in Upland. "Some days sales have been incredible, but it hasn't been a consistent path of customers buying wine for the holidays. I'm still cautious."

Paciocco said as consumers continue to eat out less and consume more wine at home, moderately priced wines continue to sell very well.

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Paul Alvarez/Special to The Business Press

Winery and Wine Bar at Canyon Crest owner Kevin Graig says his revenue is within 2 to 3 percent of last year's, with inventory priced around $15 selling the best.

"A $20 bottle of wine is selling," he said. "Not any particular brand, but of the 1,100 different wines we stock ... it's the $20 bottle customers want."

He expected business to increase before Christmas and New Years as customers wait until the last minute to make their purchases.

At Wiens Family Cellars in Temecula it's also the economy-priced vintages and wines on sale that customers are buying for their holiday parties.

"When it's all said and done, we expect sales to be up over last year," said Suzanne Schaffner, marketing director at Wiens Family Cellers. "Definitely, anything on sale is selling well, along with bottles that are priced between $15 and $20."

Schaffner said with price levels down on many bottles of wine, consumers are "getting a good value."

"Bold red wines are doing very well this holiday season," she said. "When it gets cold outside our sales of red wine pick up."

The winery, which moved from Lodi to Temecula in 2005, is offering 15 percent off on case purchases, plus gift boxes for $95 or $135 and a sampler gift pack for $59.

"We are shipping a lot more wine now than during the rest of the year," she said. "Most of the customers buying wine online have been located in Los Angeles and San Diego counties."

But the trick, Scaffner said, is to set the price at an attractive level so that customers want to purchase the wine they've spent an afternoon tasting.

Gladys Horiuchi, a spokeswoman with The Wine Institute in San Francisco, said sales of California wines have increased during the holiday season, but "sales to restaurants are down 10 percent as more people are enjoying wine at home."

"Through September, sales were up in California, while the sales of California wine to the rest of the U.S. market were flat," she said. "Consumers are looking for more value when it comes to wine. Bottles priced at $15 and under are selling very well."

The wine market has grown 20 percent from 2004-09 despite the recession; however, shattered consumer confidence caused a 3.2 percent decline during the height of the financial crisis in 2008. As consumers begin to see signs that the worst of the recession is behind them, Chicago-based Mintel forecasts the wine market will stabilize and increase by 2.1 percent in 2009.

"Despite the recent decline, the future of the wine market looks bright, at least for moderately priced segments," said Sarah Theodore, Mintel senior food and drink analyst, in a statement. "Value wines have helped consumers rethink their perceptions about wine. Domestic wines have proven to be somewhat recession-proof as unpretentious, economy-priced wines are fuelling recent sales."

"As wine finds its way out of the recession, it might be taking on a new form," Theodore said. "The down economy has given impetus to boxed wine. Marketers have an opportunity right now to really play up the benefits of this type of packaging and finally eliminate its 'cheap' image."

Consequently, 35 percent of those aged 21-24 say they would drink boxed wine at home, but not serve it to guests, compared to 19 percent of all ages.

In addition, 35 percent of 21-24 year old wine drinkers believe the wine brand they choose reflects their status to friends, compared to only 14 percent of all ages.

"There is such an enormous amount of wine on the market that stores and wineries have to sell it at discounted prices," said Peggy Evans, executive director of the Temecula Valley Winegrowers Association, a nonprofit organization that promotes the region's wine industry. "It's a great year for consumers ... great wines at great prices."

"Fortunately, we expect a good holiday season for our local wineries," she said.

Kevin Graig, owner of The Winery and Wine Bar at Canyon Crest in Riverside, said business conditions were close to what they were last year as customers seek out bargains.

"We are not down significantly in terms of sales, maybe 2 percent to 3 percent down from last year," Graig said. "We just do a lot more promotion to get people into the tasting room. Our prices average $15, so we are right in the sweet spot in terms of what customers want to spend."

Graig was optimistic that his business would pick up for the holidays as consumers looking for a unique gift would take advantage of the opportunity to bottle their own vintage.

"It's a personal gift that's inexpensive but elegant," he said. "We sell it in packages of 29 bottles or 14.5 bottles, which averages out to around $8 a bottle."