Wine Sales Drying Up as Americans Turn Elsewhere
The Losses Keep Stacking Up for the U.S. Wine Industry
The losses keep stacking up for the U.S. wine industry.
Wine sales in the U.S. last year tumbled approximately 6% from 2023, according to data from the industry data group SipSource. The drop is the latest in a long-term decline in wine demand in restaurants, bars, and stores that some are calling an “existential threat” to the industry.
A Shift in Consumer Preferences
Wine isn’t the only alcoholic drink that’s fallen on hard times; data from NIQ shows sales for beer, cider, and spirits have also decreased. But wine’s fall is steeper, and the whole industry is aware of the shift.
“Wines have been surging, surging, surging all these years, but the last few years they have dropped off,” said Larry Duke, who has owned and operated Schumer’s Wine and Liquor in Manhattan since 1978.
Generational Trends
The wine industry got a boost in 2020 when Covid-fueled lockdowns and stay-at-home orders juiced demand. But that spike has proved to be fleeting.
Wine industry scholar Mike Veseth, author of several books and The Wine Economist newsletter, pointed to generational trends to explain the drop in wine consumption.
“The baby boom generation embraced wine,” Veseth said. “We imagined that the generations that followed would keep doing that, but they haven’t.”
A 2023 Gallup poll backed up that theory, showing that younger Americans drank less than previous generations.
A Changing Landscape
The drop in demand comes as a second Gallup poll, from August, shows that more than 4 in 10 Americans now think alcohol is unhealthy. The U.S. surgeon general issued a report on Jan. 3 warning that alcoholic drinks should carry cancer warning labels.
Experts say when younger consumers do indulge, they are choosing premixed, ready-to-drink options. In fact, premixed beverages are one of the few areas in the alcohol industry to see growth.
“It’s not that they dislike wine,” said Christian Miller, research director for the Wine Market Council, a research-focused nonprofit. “It’s that they are drinking a much wider variety of other things.”
Competition from Other Options
Gary Decker, owner of Vinomania in Syracuse, New York, said legal marijuana has also drawn away demand for wine.
“Pot is taking a big chunk out of it because it’s just another part of the party puzzle,” Decker said. “It’s one other thing that people can do.”
A Shift to Nonalcoholic Options
Adding to the list of obstacles: nonalcoholic beers and spirits. Industry data shows a marked recent uptick in sales in the sector.
Nonalcoholic beverages are advantageous not just for those who are wary of the health risks of alcohol, but also for the businesses serving them.
“Retailers love them,” said Bump Williams, who runs an alcoholic beverage industry consulting business and has worked in the industry for at least three decades. “If a retailer sees one of their patrons that has had too much to drink, they can give them a water and they don’t make any money on that. Instead, they can give them a nonalcoholic mixed cocktail.”
Challenges Ahead
Wine is one of the most expensive choices of alcohol and has been getting more expensive. Since the start of the century, the average cost per liter of wine has increased from $10 to $14.
“People’s budgets are just really tight these days,” Veseth said. “So wine is feeling the crunch.”
These factors signal hard times for the wine industry, though experts are split on how bad the trouble will be.
“This is not business as usual,” Veseth said. “It’s an existential problem. Although the industry will continue, there are big adjustments needed for that to happen.”
Conclusion
The wine industry is facing significant challenges, from declining demand to increased competition from other options. While some experts predict a rough road ahead, others believe the industry will adapt and continue to thrive.
Frequently Asked Questions
* What is the current state of the wine industry?
+ The wine industry is experiencing a decline in demand, with sales dropping approximately 6% from 2023.
* What are the main factors contributing to this decline?
+ Generational trends, increased competition from premixed and nonalcoholic beverages, and changing consumer preferences
* How is the industry responding to these challenges?
+ Some winemakers and industry experts are calling for big adjustments to be made to adapt to the new market.
* What is the future of the wine industry looking like?
+ The future of the industry is uncertain, with some predicting a rough road ahead and others believing the industry will continue to evolve and thrive.
