Much of the value growth of the US market in the years prior to the pandemic was driven by sales of higher-priced wines that obscured declining sales of value priced wines.
Now that premium wine sales are flattening, total market volume has declined dramatically yet increased consumer spending has pushed total market value higher. The declines in volume may be coming to an end this year, but wine faces a long-term market challenge as Gen Z matures and accounts for a larger share of the legal drinking population.
“A lot of the negative trends are driven by lower priced wines under $11, but now higher priced wines have flattened out post pandemic so they’re not offsetting those declines anymore,” said Gomberg Fredrikson Report editor Jon Moramarco who is also the founder of the market research firm bw166. Moramarco’s comments came in a webinar he hosted May 28.
According to data by the U.S. Bureau of Economic Analysis, total consumer spending on all beverage alcohol hit an all-time high of more than $400 billion in 2024. “A bright point is consumers continue to spend more on beverage alcohol,” he said. “Volume is important … but at the end of the day we put dollars in the bank, not boxes.”
This increased spending, and it’s impact on the total market, will be covered in detail in the GFA 2024 Year-End Report that will be released later this year.
Money was going into the bank, but all the while, the industry was losing the attention of younger wine consumers. Now, as Gen Z reaches legal drinking age (LDA) and Baby Boomers age out of their prime drinking years, Moramarco said, the US wine market may be poised for more volume declines as consumption declines.
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