Sales of cheaper wines may be falling in the US, but value is up. People are finally trading up — which is surely something to celebrate.
Wine consultant Paul Ticknell disagrees. This June, as he listened to the Silicon Valley Bank’s 2024 Direct-to-Consumer Report, he became alarmed, There was, he wrote later, “very little positive to be found in the hard data presented”.
In his view, if small-to-medium wineries don’t take immediate action to secure their consumer base, the long-term consequences could be dire. Not only that, but “we may be getting into a pricing corner we can’t get out of very easily.”
Jeff Siegel, Meininger’s contributor and long-time industry veteran, agrees.
The decline of the entry level
Tincknell has worked in wine sales and marketing for more than three decades, and co-founded the Tincknell & Tincknell consultancy.
He’s particularly worried about the decline of the under-$12 category.
“If wine becomes relegated again to a rich person’s beverage or a special occasion beverage, then we’re going to see a continued decline,” says Ticknell.
If small-to-medium wineries don’t take immediate action to secure their consumer base, the long-term consequences could be dire.
Ticknell says that for some people, $12 might be the limit of what they can pay. “We shouldn’t be excluding them because they can’t afford a $20 bottle of wine.
He says the bottle itself is still important for many people, so the more affordable bag-in-box won’t satisfy them. “If the cost of entry gets too high, that will quash curiosity,” he says. “It’s much easier to go buy a bottle of craft beer or an inexpensive cocktail.”
Ticknell says some of the push towards premiumisation is “anti-customer”, and was done so that wineries could achieve higher margins. “We as an industry tend to focus on the high-end wines in our marketing, in our discussion,” he says. Worse, entry level products are generally denigrated.
Is premiumisation really premiumisation?
Siegel couldn’t agree more. From 2007 to February 2024, he wrote a blog called Wine Curmudgeon, which focused on finding and recommending affordable wines.
“I ended it because I saw the future,” he says. “As wine became less relevant to people, there was no reason to keep going.”
Everything changed after the 2008 recession, he says, when prices rose and $12 wines became $15. Now, land and grape costs in California mean the only people who can afford to make $12 wine are the big companies.
“When I talk to people who are privy to sales data that is not publicly available, they always tell me that one of the reasons that wine has lost everybody younger than the oldest GenX is because they don’t want to pay $20 for a product they know nothing about,” Siegel goes on. “At the entry level, quality wines are gone.”
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