Interesting article on how wine sales have declined two years in a row, first time in 30 year, and that it’s people under 50 not drinking as much wine that’s driving it…
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One of the things taking wine dollars away is cocktails. Europe is going cocktail crazy the last couple of years. I was in Belgium last fall, and the breweries are doing everything to attract the younger drinkers - lots of ‘frou frou’ cocktail fruit beers etc - And I remember hearing this in France as well.
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a few very high-level caveats for these reports. i read them every year and rob and his team have done an amazing job putting them together.
it’s based on the massest of the mass market trends, items, and suppliers. their data sources of Nielsen and SipSource - orgs that are limited in their view to the massive players. wine and all alcohol is a massively long tail industry. this isn’t the case in most well-known consumer products. point being, all the info is correct, but it’s a very limited picture. and as such, i find it difficult from which to derive salient insights. in the case of this report applying to wine berserkers, it’s approaching irrelevant imo.
things to keep in mind when reading the report:
- premium category is anything over $15 ish
- most of the data is based on retail (off-premise), though roughly 50% of all consumer spend in the USA is on-premise
3, what little on-premise info they have is incredibly limited and again, the largest brands and wholesalers
i offer this as clarifying context for the report. the underlying data they present is accurate from the sources, but the resulting trends and predictions get a bit muddy given how much they aren’t able to capture.
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It’s anecdotal, but I’d say about a quarter of the young people I know are abstaining from any alcohol. Think booze might be the new cigarettes.
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I also wonder how the aging of the Baby Boomers and early Gen X ers are impacting this. A larger % of the overall population is over 50 now… Makes sense that younger people are drinking beer and spirits…
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Hey, I’m doing my best here, but I’m only one person! As stated in this article, this goes to the lack of disposable income. Of my circle of friends (also majority under 50), the majority don’t drink wine and this is largely because of the cost. You go to a bar or restaurant for example, a beer costs $6, a glass of wine costs $12 at minimum, at the liquor store, you can get an 18 pack of beer for $20, a bottle of wine for $20 seems crazy to some (and that’s a less expensive bottle). I’m not saying I’m the only wine drinker, but I’m in the minority for certain. Now, I’m one of those wine drinkers in that under 50 category, but I also enjoy spirits and beer. I do prefer craft beers but will drink Coors or Bud now and then on a hot summer day, or at a game. But even at a game, I’m more likely to go bang for the buck and get a double bourbon and ginger rather than a beer or wine. And the spirits we buy tend towards higher end whiskey, so we often spend $100+ on a bottle of whiskey, but that’s going to last us a while. Also, I must say, there was a thread out there at one point where someone asked how much everyone spends a month on their wine habit. I was a little in shock to see some of the numbers people put out there, because I simply don’t have that level of disposable income and I would say the majority of my peers don’t as well. I’m probably closer to about $300/quarter on wine purchases, which probably leaves you thinking I’m not drinking nearly enough wine, I agree. However, with BD coming up, I have been preparing my budget for a large (to me) splurge, which will still likely be minute compared to what others will spend. As far as the abstaining from alcohol, I don’t know that group. I hear about dry January, or sober October, but I haven’t completed one of those myself.
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Half of the US wine consumption in on premise? As in bars, BTG and restaurant wine lists? I’d of guessed it’d have been less, but I have no pulse for the market other than an observer. If its 50-50 split then I can sort of see why wine shares are dropping. The 60 and younger crowds are not going to spend as much of their money on premium wine due to higher and higher costs year over years. $20 for a bottle of Chardonnay vs. $20 vodka at a retailer. $12 for a glass of Chardonnay vs. $12 for a mixologist cocktail. $65 for a bottle of Rombauer Chardonnay off a restaurant list vs. 5 mixologist cocktails. The younger the crowd, the heavier the booze start to shine. Wine is sort of pricing itself out for the myriad of reasons on the backend. Plus there are 20,000 brands to choose from vs. a much smaller spirits world. Being on a good amount of wine mailing lists, seeing restaurant list pricing makes me cringe. If 50% of wine sales are on premise, it seems easy to see why its share is going downhill-from my perspective of course.
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spend, not volume but yes. circa $75+ billion annually on wine in the USA across all channels.
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The article kind of hits on it, but not with nearly the emphasis I think it deserves: Millenials are saddled with less money, and significantly increased costs of living. Wine, too, is only getting more expensive. Wine is a luxury good. When something has to give, it should be (and often is) those things on which discretionary income is spent. Case closed.
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this is the “avocado toast” thesis, which is right except for all the times it’s wrong.
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Not familiar with the avocado toast thesis, but what you say could be said about anything.
I’m not saying there isn’t a wide array of factors at play here —- certainly there is —- but it’s disingenuous and misleading to treat all factors as if they’re equally impactful.
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From my view I see a few different items that agree with the article and a couple other side issues.
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Economy: Many of my wine friends are in the tech industry. Many of them have had their disposible income cut via the layoffs and re-orgs going on. They just aren’t buying much wine in volume now or the past year or so. Instead of case they maybe be buying 3-6 bottles.
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Price increases (inflation/economy/etc): The wineries that increased their prices 15 months ago won’t be shocking their customers. Those wineries or dining spots trying to increase prices now will be moving many customers away.
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Overall $ spend: The ‘kids’ (35-45) I know who are interested in wine certainly look at price for their drinking spending. For them a $20 bottle from Costco is a big wine spend vs. beer/coctails but…they, like I was at their age, seeing the difference in the $20 vs $10 bottle from Costco and then when they are at the house they start asking more questions. As their education and experimenting with wine increases, they do spend more on wines. is it enough to make up for people who have stopped buy wine to age out? Who knows.
There are also starting to be more sales from wine clubs again. Not as large as mid covid but it seems like many are pushing sales for cash flow.
It will be interesting to see how hard the economy will be on wineries over the next 18 months, at least here in WA state. Many wineries have closed, for various reasons, but the market can only take so much before it starts to force people to close or merge.
My .02
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Brian,
I’m not disagreeing with you, but was a late Gen Xer it was the same for us too. We had less money and increased costs of living vs our parents…
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I, too, am a late Gen Xer, Geoff. And I agree with you that the problems experienced by Millenials are also being experienced by late Gen Xers.
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Is legal pot impacting any of this?
Relatively, with marijuana, it don’t cost very much, but it lasts a long time.
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I look at this and think the restaurant model for pricing wine and other alcohol is broken. Restaurants have counted on alcohol sales for their profits and are gouging customers who buy wine worse and worse over time. A lot of people are rejecting this by not buying wine in restaurants apparently. Restaurants that cannot figure out ways to make profits with more reasonable wine prices are going to go out of business.
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My guess is that not really. It’s not that alcohol consumption is down, it’s that wine consumption is down cause the younger group is drinking more beer and cocktails rather than wine.
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Just wanted to point out that we have another thread from yesterday that is practically on the same topic right now:
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