Here’s a quick poll to determine your drinking patterns and preferences compared to the nation as a whole.
- Which beverages do you prefer?
- Are you drinking more or less than five years ago?
- Have your preferences evolved over those five years?
- Are you spending the same on a bottle of wine as in the past?
- Are you drinking the same wine as in the past?
- Have your sources of wine purchases changed recently?
In researching the data supporting the consensus answers to these questions, I discovered a number of statistics and trends that I’d like to share with you. Measure this data against your responses to the above poll questions.
To place the wine industry and economy in perspective, consider this data:
Wine sales were 341 million cases last year, an increase of 2.7 percent. While this set a record, it represents a decline in growth from the trend of the last 10 years. This seems counterintuitive. After all, the United States is the leading consumer of wine in the world. Annual wine sales over the last decade have steadily increased at a reasonable pace. Why the shift in growth?
There is a sea change underfoot in the demographic composition of the United States. The Baby Boomer generation is reaching Social Security-eligible age at the rate of 10,000 per day. At the opposite end of the spectrum, Millennials are reaching legal drinking age at a rapid pace.
As Baby Boomers age, they are consuming less wine and purchasing lower price-point bottles. As Millennials mature, their disposable income isn’t growing and they prefer lower price-point wines. These trends do not portend well for the future overall health of the wine industry.
The telling statistic: in 2017, per capita consumption declined for the seventh straight year.
Who is supplying your grape juice fix? There were 9,762 wineries in the United States as of last month. California overwhelmingly leads the pack with 4,425 (45 percent), followed by Washington, Oregon and New York (collectively 20 percent). California is the perennial leader in production as well with 284 million cases, representing 83 percent of United States wine volume. Again, Washington, Oregon and New York are left in the dust with an aggregate of 31 million cases (10 percent).
The polarization of producers is clear. Just 2 percent of the wineries in the United States produce a whopping 84 percent of the wine. Seen from the opposite perspective, 7,818 wineries each produce less than 5,000 cases per year, including 4,105 producing less than 1,000 cases each.
What are Americans drinking? Wines priced below $10 sustained overall sales growth for years. This is no longer the case. These wines declined 1.7 percent in 2017. Wines priced above $10 increased 5.7 percent in the same period.
Cabernet Sauvignon and Chardonnay still lead the pack in consumer popularity. Trending upward are Pinot Noir and red blends. And then there are rosé wines. Seemingly from every wine region. Produced from an ever-increasing number of grape varieties. Sales increased 48 percent last year. Have you been increasing your wine budget for sparkling wines? I have. Sales increased 32 percent last year.
A growing trend in sales is the Direct to Consumer channel. Fully 10 percent of retail wine sales are now sourced through consumer purchases of offerings shipped directly from wineries. This represents a 15 percent year-over-year growth rate, as consumers increasingly bypass traditional brick and mortar shops. The average price of the 5.8 million cases shipped last year was $39, significantly higher than the overall average.
Just as the United States economy is experiencing radical change as it evolves in the 21st century, so too the consumer wine economy. Change is moving forward, albeit at a slow pace. But this change is inexorable, fueled by deeply imbedded tectonic shifts in American demographic and wealth profiles.
Where do you sit on the broad wine spectrum as it evolves? Are you stuck in your safe choices or are you stepping outside your comfort zone into the new wine culture? Send me your answers.
Nick Antonaccio is a 40-year Pleasantville resident. For over 20 years he has conducted wine tastings and lectures. Nick is a member of the Wine Media Guild of wine writers. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at firstname.lastname@example.org or on Twitter @sharingwine.