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News
Wine becomes ‘more infrequent beverage’
Following news that overall wine consumption has fallen in the US and warnings of an oversupply, market analyst Wine Intelligence reveals this is due to wine becoming a “more infrequent beverage”.
Citing figures in its recently published US Landscapes 2020 report, Wine Intelligence said the number of US consumers drinking wine at least once a month had fallen by 11 million in four years.
Around one in three American adults (77 million) consumed wine at at least once a month in 2019, down from 88 million in 2015.
The reduction was particularly marked among consumers aged between 21 and 34. So-called millennials accounted for 29 million regular wine drinkers in 2015, compared to 21.5 million in 2019.
While younger consumers are reducing in number, they are, however, spending more.
Wine Intelligence reported that those younger consumers that continued to drink wine every month are “more highly involved, adventurous and higher spending wine drinkers than more mature consumers”. They spend more than older consumers across “the majority of both on- and off-trade premise occasions”, the report noted.
More consumers, but less frequent
Wine Intelligence also highlighted the trend that more people were drinking wine, they just weren’t doing it as frequently.
The total wine drinking population achieved a record high of 118 million last year, up 8 million on the figure reported in 2015. This is based on the number of people who said they drank wine at least once per year.
Wine Intelligence said it has been monitoring this trend for some years, noting that the proportion of those drinking wine at least twice per week has fallen consistently since 2015.
However, until 2019, the number of consumers drinking wine monthly had stayed fairly static. It noted that American consumers had altered their relationship with wine, with it becoming a more infrequent beverage.
Lulie Halstead, CEO of Wine Intelligence, commented: “US wine consumer has fuelled an unprecedented growth story for wine in the 21st century. The data we are seeing now suggests that this picture is starting to change for the next generation of wine drinkers. Success in the US wine market in the coming decade will be measured by how well wine adapts to the new reality of growing health consciousness and a more proliferated beverage choice.”
In figures released by IWSR yesterday, despite a fall in wine consumption, sales of alcoholic drinks in the US overall were up 0.3% by volume and by 2.5% by value (to total US$167bn) in 2019.
While wine sales fell by 0.9% in volume, and beer continued its decline, distilled spirits and RTD products picked up the slack. Among the top performers were mezcal and Japanese whisky for spirits and the growing hard seltzer category, which now represents 43% of the whole RTD sector.
Writing in the Silicon Valley Bank 2020 State of the Wine Industry Report, Rob McMillan noted the dangers of an over-supply of wine coupled with falling consumption.
In order to redress the balance, he predicted that vineyards will have to be uprooted in order to aid the problem, something that has not really been done in the US since Prohibition.
I wonder how much of this slow down could be reversed if more restaurants only marked-up the price of whole bottles by 50% rather than the 100 – 150%, and even 200% markups that I frequently encounter (for shame by the way!). There are some real solid values in the $12 – $20 per bottle range at most wine/liquor stores, however those same bottles becomes an awful value when purveyed by a restaurant for $25 – $60 per bottle. Consumers may also be a little cost conscious when it comes to adding $50 for a single bottle, or $100 for two bottles, to the food cost. Just as bad, possibly worse, are restaurants that present $6 bottles of inferior wine often for $20 – $25 per bottle. Nothing leaves a worse taste in a customer’s mouth than an awful bottle of wine for which they just spent the same amount at a restaurant as they could have spent on a marvelous bottle from their local retailer. In fact, I often forego dining-out knowing that I’m either going to have to spend way too much on a decent bottle of wine, or forego wine altogether (and what kind of breakfast, lunch or dinner would that be!). While there are some restaurants that offer respectable wines at a respectable price, I challenge the industry at large to strike all sub-par wines from their menus and only markup 50% on a solid selection that best compliments their cuisine and style. I believe these actions would greatly increase the number of wine drinkers as well as the frequency of consumption and boost the number of diners as well.