Since the end of the 2007 recession, the U.S. wine industry has had a single mantra: "drink better." That is, spend more money for a bottle of wine.
And, for the most part, that’s exactly what has happened, a process called premiumization. The average price of a bottle of wine sold at retail in the U.S. has more or less doubled to around $13; the off-premise sweet spot is now $15 to $20 a bottle; and sales of wine costing less than $10 a bottle have all but collapsed.
The unintended consequences of premiumization
But a funny thing happened on the way to nirvana. American wine consumption started dropping, even before the pandemic, and has picked up pace since then. We may be “drinking better,“ but we’re also drinking less. The wine industry, in its mad dash to embrace higher prices, overlooked that most basic of economic principles, that higher prices result in lower sales.
Call it the revenge of the law of unintended consequences: Not only have higher prices reduced demand, but they have also turned wine into something reserved for special occasions, further cutting consumption. After all, how many special occasions are there in a year? And since wine is now reserved for special occasions, the industry has — intentionally or otherwise – demonized the cheap wine that most people bought to drink with dinner as something somehow unworthy (even if the cheap wine is actually quite enjoyable).
When ‘value wine’ became a dirty word
Consider these points by way of illustration:
- Former American Wine Society board member Jay Bileti wanted to organize a tasting group in Denver recently, focusing on “value wines.” But, he said, at least half of the prospects passed, seeing the ambition of the group as too “low end.”
When Dave McIntyre became the wine critic at the Washington Post in 2008, his goal was to help consumers understand that wine could be an everyday drink. But, when he retired from the Post at the end of 2024, “the industry was going in the opposite direction,” and wine had reinvented itself as something “too special” to drink every day.
My students at the wine classes I taught at the Cordon Bleu and Dallas College around the 2010s were astonished I drank wine with dinner – even though they were culinary students. Said one: “It’s like date night every night!”
At this year’s Silicon Valley Bank wine industry report webinar, Nielsen’s Kaleigh Theriault made the distinction between a wine shopper and a wine consumer. The former, she said, didn’t necessarily drink wine, but bought it as a gift for someone else. Does this mean wine has turned into the equivalent of buying Mom perfume for her birthday?
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