It's true and it isn't just wine sales that are down – beer and spirits sales are declining too, which hasn't happened before.
There's no way to sugarcoat it: the value of wine sales is flat and in terms of cases sold, the industry is down.
The U.S. wine industry peaked at roughly 410 million cases in 2019 and will reach closer to 370 million cases this year, a 10% decline, according to Jon Moramarco, editor of the Gomberg-Fredrikson Report and owner of market research company bw166.
Yet, as long-time wine industry analyst Jon Fredrickson frequently says, "there are no one-liners in the wine business."
Case in point, there were mixed results in a winery executive study. In the inaugural BMO Wine Market Report released last year, roughly half of wineries surveyed said their businesses had grown while about half said they declined. That may well be the scenario in this year's report. Wineries are battling for market share.
Alcoholic beverage analyst Danny Brager looked at 2024 data for the top 100 wine brands in Nielsen-tracked channels and found that about one-third of them were still growing in sales. Whether it's because those brands are well positioned in the right niches or tiers-or have just tapped into some good marketing-it's working, and it's pulling sales from other brands.
Mainstream brands such as White Haven, Black Box, BotaBox, Bread and Butter, Bonanza and La Marca Prosecco, continue to see gains, and Josh Cellars remains a behemoth at 7.5 million cases.
As the CEO at one of the larger wine companies put it, "There are 15 to 20 items that are growing and stealing the share while, everything else in the wine category is down."
One caveat to remember when looking at Nielsen data: this is just one slice of the retail pie. The data does not include sales information from chains like Costco or Trader Joes, two outlets where wine appears to be doing well.
Another caveat-a handful of the brands doing well in Nielsen-tracked channels aren't actually made with "standard" wine ingredients. Some are wine- or malt-based ready-to-drink cocktails, like Beatbox, Buzzballs, Minute Maid Spiked, or Rancho La Gloria agave wine-they are taxed like wine, categorized as wine, and often found where 'wine' is sold. They're on fire.
There see some other bright spots, too. Private labels are doing quite well. Several executives said sales of their private label wines are up and that retailers are, predictably, providing private labels with good shelf space. Retailers have been more committed to working with suppliers on private labels long-term to ensure consistency.
Aromatic white wines are bucking some trends and experiencing solid growth.
Niche pockets like the 'better-for-you' segment and non-alcoholic wines are doing well off of a small base, but there hasn't been a standout brand, yet. There are only a few brands that have launched this year to any major success. One exception has been the breakout brand XXL, the antithesis of low-alcohol wine. XXL comes in strawberry, mango, pineapple, blackberry, or peach flavors and an astonishing 16% ABV. It's second only to Josh in dollar value gained in the last year. This high-alcohol sweet wine saw a phenomenal rise, similar to the surge in popularity of Taylor Port (Gallo) a couple years ago. Initially sourced out of Moldova and imported by Tri-Vin Imports, XXL is blowing up and is currently made with California wine.
Premiumization, however, is slowing. Dollars were still growing faster than volume in the 2024 scan data, but not as much as they had been over the last decade. The gap between dollars and volume in the retail data narrowed. The market downshifted from the heady days of the COVID crisis when $50 and $100 wines surged.
"You're starting to see consumer behavior changing," Bob Torkelson, the CEO of Trinchero Wine Estates, said. "For the longest time there were premiumization trends, but over the past four to six months, you're starting to see some retrenchment from higher-end products."
Wines priced below $10 have been declining for a decade, and that continues. The best price points for growth in retail scan data are those between $15-25.
"The world isn't falling apart, it's just a whole lot tougher." - Danny Brager, alcoholic beverage analyst
Beyond the negative headlines
Are rumors of wine's demise exaggerated?
Headlines have always been used to sell newspapers, but now headlines are the news. It's become increasingly true that people read a headline and assume the story underneath is true, without digging deeper or reading any part of the article. Headlines, which are written to grab attention, only tell part of the story, and often a dismal outlook. Sometimes the data shared is one-sided.
"The headlines say wine and alcohol are being left behind," Stephanie Gallo, chief marketing officer at Gallo said. "We believe that the headlines are wrong. We collectively need to get a handle on the narrative driving the decrease in sales."
She noted that the single most important factor behind the overall decline in sales isn't because there are fewer drinkers (8 million more legal drinking age consumers have matured into the category since 2019) or that there are a smaller number of drinking occasions.
It's because the number of servings per occasion has dropped.
"We need to focus on that as a key driver versus talking about all the other things that are confusing the issue," she said.
Gallo discussed the two key reasons servings per occasion have dropped. First, wine as a category is less accessible to lower and middle-income consumers, meaning premiumization works against the category. Secondly, consumers are diversifying their alcoholic beverage consumption across more categories than they did even just a few years ago.
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