We May Be Drinking Less Wine, But it's Better Wine
Boomers are buying less wine. Millennials aren’t picking up the slack. As a result, the growth of wine sales is slowing, while buying patterns are shifting in ways that are sending chills down the collective spine of the U.S. wine industry.
We’re also buying more wines in cans and other alternatives to bottles. And while the vast majority of wine continues to be purchased at retail outlets such as grocery stores and wine shops, more and more is sold “direct to consumer,” or “DtC,” either at the winery or over the Internet, shipped directly to our homes.
Such are the pronouncements, prognostications and thunderings of a blizzard of annual reports issued this time of year by a cottage industry of trend-spotters. Just as Dumbledore could pull a thought from his ear and drop it in a birdbath to reveal the secrets of the past, these soothsayers pore over sales data of the past year to divine hints of the future.
In the short term, “business is pretty good,” says Rob McMillan, author of the Silicon Valley Bank’s annual report on wine industry trends. The booming economy and tax reform mean more discretionary income for consumers, and “getting those few extra dollars in your paycheck through fiscal stimulus or tax relief is probably good” for the wine industry, McMillan said in a videocast of his annual findings on Jan. 17. There’s logic to this. I’ve found myself drinking more as I watch the news.
But McMillan sounded an alarm. Growth in U.S. wine consumption is slowing after a 20-year run spurred by the famous 60 Minutes report in 1991 on the “French Paradox” and wine’s health benefits. The growth in sales flattened to just 0.3 percent last September, a low not seen in decades. In part, this is because we are drinking less wine, but better — sales under $9 a bottle have decreased, while we are buying more in the $15 to $20 range. “Something is changing,” McMillan said.
Boomers are retiring to fixed incomes, inclined to spend less per bottle and drink through their cellar collections. Millennials, who in the past seemed to have disposable income to spend in restaurants and on travel, are now seen as taking on debt as they purchase homes and start families. That leaves the more narrow band of gainfully employed Gen Xers to carry the brunt of wine demand. All three groups are increasingly focused on value — that $15 to $20 range.
Read more at The Washington Post