January saw the advent of another version of the annual State of the Wine Industry report by Silicon Valley Bank. I’ve covered several years of this report here on 1WD, and usually that coverage is of a slightly (ok, full-on) negative tone, warning the US wine biz that sea changes in consumer behavior are afoot, about which the industry seems to be doing little.
Now, according to the 2019 incarnation of the SVB analysis, the US wine industry might be too late; or, at least, too late to avoid negative impacts to fine wine sales now that most of the millennial generation are old enough to legally drink, and making just enough money to spend some of it on drinking.
Congrats, folks! You officially stuck your head so far into your butts that, if you squint through your belly-button hole, you’ll be able to see that you blew your chance at capturing the hearts (and dollars) of the next generation of drinkers! Go, you!…
Here’s how the carnage looks, folks:
- From 2015 to 2018, the US wine biz lost four million drinkers – during a time when the country became the number one wine market globally, and the number of adults of legal drinking age increased.
- Overall wine sales in the last half of 2018 decreased for the first time in a quarter-century (even the recession a decade earlier saw wine sales at least hold steady).
- Sales for three of the largest wine producers in the USA – Bronco, E. & J. Gallo Winery, and Constellation Brands – are all down.
- We now have an oversupply of fine wine grapes, particularly in California, which doesn’t bode well for sales growth.
- 2019, SVB predicts, is going to see price drops and very small growth – some of it probably negative – in terms of wine.
If you’re taken by surprise that younger drinkers are eschewing fine wine for cannabis, beer, cocktails, and even spiked seltzer (which is doing well enough to afford its own Superbowl commercial), then bluntly stated, you are a fool. So many saw this coming that even I have been shouting about it for at least a decade.
But even in our current US culture of rampant blame-deflection, trying to pin the gloomy outlook for US wine sales on weed, beer, millennials themselves, or anything else, serves only to complete the failure.
It is not time to cater to millennial generational tastes – it is past time to do the preventive work. The wound is already open, the blood is already spilling; it’s time for the US wine biz to staunch the bleeding, and maybe – just maybe – start the healing.
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Copyright © 2016. Originally at Congrats, US Wine Industry – You Blew It! (Thoughts On Fine Wine And Millennial Consumers) from 1WineDude.com - for personal, non-commercial use only. Cheers!