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Old affluent consumers drive US wine market
Growth of RTDs and spirits, plus the impact of Covid-19, has led to a loss of close to 15% of the regular wine drinking population in the US between 2018 and 2021, with younger drinkers moving away from the category, according to Wine Intelligence.
Although the wine category in the US holds an 11% volume share – equal to that of spirits – the category’s future is facing challenges. Wine volumes are expected to continue on a downward trajectory, especially as RTDs and spirits steal share.
Those leaving the category are mainly younger legal drinking age (LDA+) consumers and those on lower incomes. Those who remain are skewing older and more affluent, Wine Intelligence data has revealed.
“Closing the on-premise during Covid shut down a key channel for younger LDA+ consumers to encounter wine – a key channel for their previous consumption of wine at social settings,” said Richard Halstead, COO Wine Intelligence, a division of IWSR Group.
Changes in consumer priorities and habits mean that wine brand owners are re-engaging with an increasingly older and more affluent audience, and one that is seeking more premium wines.
Wine spends have increased across all occasions, and Premium+ categories are expected to lead growth over the next four years as volumes of wine under $10 decline further.
An increasing skew towards affluent consumers suggests that regular wine drinkers will be better insulated from rising living costs and inflation. Wine volumes will likely continue on their downward trajectory, but value will continue to grow, especially as wine becomes more interesting to a more affluent, urban elite customer segment, and to over-55s generally.
The shift towards more moderate consumption is also reducing the number of young consumers shifting into the wine category.
“With consumers not drinking as often, when they do, they tend to choose their favourites over something they rarely drink,” commented Halstead.
In other news, Australian wine consumption remains on a downward trajectory, but younger millennial drinkers have become a major driver of behaviour in wine during the pandemic. read more on that here.
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