Last week, Meiningers took a moment to examine the four main reasons behind wine’s consumption decline. None of them (healthier lifestyles, inconstant consumers, lower alcohol levels, and drinking quality not quantity), I believe, came near to the single, obvious cause: most consumers don't have that much spare cash any more.
I hold a (now formerly) private thesis that wine's fortunes mirror those, not simply of the economy as a whole (although more on that shortly), but those of their target demographic.
When the Reagan administration ushered in a new era of corporate love in the early 1980s, primarily benefitting higher earners in the US, sales of blue-chip Bordeaux went up. When an emergent upper-middle class broke out in China, sales of blue-chip Bordeaux went up. In fact, when a middle class full-stop emerged in China, wine sales more broadly went up. (You can have fun with it if you like: when liberal arts funding goes down, sales of natural wine suffer; when short-haul European flights fall in price, Retsina has a renaissance; etc.)
It seems relatively obvious to me that the main driver of the decline in wine consumption is due to the real growth in income inequality over several decades, compounded of late by the likes of inflation/cost of living crisis. Personally – and I'm perfectly happy to be alone on this – I believe this is the major factor behind wine's declining fortunes. There will doubtless be – just as there is always a guy in his 50s at a wine tasting to tell you that you're wrong – a number of people to lash out at this.
It is important to remember that not all wine is in trouble, of course.
While top-end Bordeaux may have had a blip of late, I'm inclined to believe Jean-Charles Cazes of Château Lynch-Bages, who told newspaper Les Echos that consumer interest was focused on the "top third of the Grands Crus" and that the "segment between €15 and €40 a bottle is having a tougher time". Sure, things are getting a little crammed at the top of the wine world as the luxury labels vie for position in your average hedge-fund manager's annual cellar restock, but there is no existential crisis at the top. If you ever wanted proof that it's alright for some, look at the continued growth of Burgundy prices at auction. This is what I mean by the fortunes of wine categories mirroring the fortunes of their customers (or is it the other way around?).
Cutting their own throats
It's not alright for others, though.
Last year, I attended New Zealand Winemakers' annual set of talks in my local region, in which one slot was filled by an economist who, while expounding on the need for businesses to cut costs, clearly noted that, to that end, we would be better off under a right-wing government. Lo, this has come to pass. But cutting costs is only one side of the wider equation. As the cocky, slick-haired, gingham shirt-wearing economist expounded on how much he understood the challenges of keeping costs down, I couldn't help thinking that a business's major cost – its staff – is also the wine industry's consumers. There's no point cutting costs in your business if the end result is that people aren't paid enough to buy your product in the first place.
This is an interesting quirk of the wine industry. The people in it (sommeliers, harvest interns, reps, winery staff, etc.) are generally terribly paid and yet also represent the wine industry's best consumer base: knowledgeable, experimental, and regular. Yet they are rarely given the means (cash) to fund their habit.
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