Roller coaster ride for US wine sales in first quarter

US consumer confidence continues to fall amid fears of inflation and concerns over President Donald Trump’s aggressive push-reversal-push on tariffs. Purchases of luxury goods, including wine, are notable silver linings. Kathleen Willcox reports.

Broadly, wine sales in the US are down -3.6% year over year according to Nielsen data for the past four weeks. However, price declines in the fine wine secondary market appear to have bottomed out, according to wine retailers and investment houses surveyed by Liv-ex, a global wine marketplace.

Rare and specific premium wines, organic wines and wines from a small handful of countries are drastically outperforming their still-flatlining and declining peers. We reached out to a few of the “winners” to get a better sense of what’s happening now, and to see if the extended correction the industry has been contending with is finally on its way out.

“The strength we’ve seen recently in classic collectable wines may be a sign that regular four-year valuation cycles we noted in the wine business are moving into typical upswing after two years of correction and weakness,” says David Parker, owner and CEO of Benchmark Wine Group, the largest rare and back vintage wine reseller in the U.S. “It may also be a sign that collectors are discounting the misrepresentations of health issues associated with wine, and that the more upwardly mobile Millennials are embracing the wine collecting hobby as the Gen Xers and Baby Boomers did before them.”

Rare and luxury wines are breaking records

Super premium wines are more desirable than ever, despite wines’ overall lacklustre sales record in the U.S.

Benchmark acquired the Santa Rosa-based fine wine purveyor The Wine Spectrum in 2024, which helped make last year its most successful in history. So far this year, sales have continued to increase year-over-year, Parker says.

There are certain particularly notable coups: on average, price appreciation has been between 3% and 5% this year for Benchmark’s rare wine sales, he says.

“The wine collecting hobby and rare wines as an investment continue to be popular and a bright spot in the industry,” Parker says, pointing to Benchmark’s brand Brentwood Auctions, which managed to achieve 400 auction records so far this year, including the sale of a 1972 Clos du Val Cabernet Sauvignon for $8,400. (the previous record was $6,847.50 in May of 2022).

He points to California “cult” wines, highly ranked Bordeauxs and Ports as areas of strength, up 2.5, 4 and 7 per cent respectively. 

“It may be part of the search for investments outside of classic equities, and may tie with the trend of high-net-worth individuals showing more interest in second homes while eschewing other collectables like watches and sports cars,” Parker muses.

Super-collectable wine is in a category of its own, but luxury wine overall is evolving too. For brands like Paso Robles’ DAOU Vineyards, which was acquired by Treasury Americas in 2023, where Neb Lukic serves as president of luxury sales and marketing, limiting production to maintain quality while also expanding outreach with strategic partnerships is key. 

DAOU, Lukic explains, maintains cultural relevance with partnerships with the Dallas Open, the Santa Barbara International Film Festival and the Beachlife Music Festival, while also creating “world-class Bordeaux-style wines,” allowing it to ascend to become the US’s top-selling luxury Cabernet Sauvignon, according to Circana’s latest numbers.

With Treasury, DAOU will be able to expand aggressively across the globe this year, Lukic predicts.

“With Treasury’s global resources, DAOU is poised for international expansion, bringing our wines to key markets like Singapore, China, and Europe, where demand for ultra-premium wines continues to grow,” Lukic explains. “TWE has established a dedicated sales and marketing team focused solely on expanding DAOU’s global footprint. Operating under the guidance of the Penfolds division, this team leverages Treasury’s well-established international network to scale DAOU’s presence in high-value markets strategically.”

Organic wines continue to grow and flourish

While rare and premium wines can be a harbinger of things to come for the industry or just a sign of what the 1 per cent is up to, the vast majority of the wine market is dominated by wines that cost less than $20 a bottle — and the people who buy them. 

Organic wines, meanwhile, appear to be striking the balance between responsibility and indulgence that many health-conscious wine lovers are seeking today. Traditionally, consumption of organic wines has been centred in Germany, France and the UK, which together gulp down 60 per cent of the world’s total volumes, according to IWSR.

But the category broadly, and in the US specifically, is enjoying increasing prominence, as consumers perceive it as healthier than conventional wine, according to a report by InsightAce Analytic that projected an incredible 11.3% annual CAGR growth through 2030 when it will reach $25.07 billion

At Bonterra Organic Estates, that growth is being driven by sales of its Sauvignon Blanc — a grape that has also seen enormous growth in recent years, especially when compared with other traditional varieties.

“The organic wine category continues to accelerate, building on the momentum of the past several years,” says Allison Wetsel, president of sales and wholesale operations for Vina Concha y Toro, which owns Bonterra. “For Bonterra, our growth is being driven by Sauvignon Blanc, which is up 10% in volume and is poised to overtake Cabernet as our top varietal in terms of consumption.”

Bonterra produces about 500,000 cases annually, and currently, Cabernet Sauvignon accounts for 31% of the volume, while Sauvignon Blanc is nipping increasingly close at its heels with 25%.

Entry-level and premiums from Chile, Israel, Italy and Germany soar

Certain pockets of the globe are also garnering increasing interest from wine enthusiasts.

“Chilean wine is having a moment in the US, in both value and luxury segments,” says Wetsel. “Concha y Toro’s value brand Frontera is one of the few Top 10 brands in the 1.5L category experiencing growth, with a 4.1% increase in volume year over year, outpacing the segment by 8.8 points.”

Yarden Wine Imports, which encompasses Golan Heights Winery and Galil Mountain Winery in Israel, has seen significant success, largely driven by on-premise activity, but also in off-premise sales. Last year, Yarden Wine Imports reported 40% growth year-over-year.

“Entry-level wines, particularly Hermon and Galil Bar, continue to defy industry trends, showing impressive double- and even triple-digit sales growth,” says Walter Whyte, vice president of sales for Yarden Wine Imports. “This momentum is driven by retailers’ increasing willingness to embrace emerging regions and the exceptional quality-to-value ratio these brands offer, which has been a key driver of this success. As more buyers and consumers look beyond traditional categories, we expect this strong trajectory to continue throughout the year.”

Whyte predicts a continued, strong market delivery of “exceptional value compared to similar wines from traditional regions.”

In Italy at the Consorzio di Tutela Barolo Barbaresco Alba Langhe e Dogliani, president Sergio Germano says that while the current market situation remains uncertain, they’ve observed positive trends in the 2024 bottling data, underscoring the continued importance of the US market.

Barolo DOCG has seen a 6% uptick in bottled wine, and Langhe DOC Nebbiolo has seen a 12% increase in bottling compared to 2023, he notes. Barbaresco DOCG remains stable.

“Overall,  the market is responding well to both lighter reds and bigger reds, depending on the occasion,” Germano says. “Based on this data, I believe the market is embracing both lighter and bigger reds, with choices influenced by the occasion.”

And while bottling data doesn’t directly correlate with sales figures, it serves as an indicator of expected demand. While the potential tariff, inflation and shifting demands are concerns, Germano is bullish on the future. 

“Looking ahead to 2025, we remain cautious but optimistic,” Germano says. “The ongoing investment in education and relationship-building will be key to sustaining demand for high-quality, origin-driven wines.”

Andrew Meyer, chief sales officer of Prestige Wine Imports, Corp, which imports a diverse range of Italian wines, says it has seen strong growth for Mezzacorona Pinot Grigio particularly as they focus on promoting smaller formats. While 1.5L Pinot Grigio has driven growth traditionally for the brand, sales of the 750 ml and 187 ml are up 21% and 55% respectively.

The brand’s premium offering Domenica DOC Pinot Grigio ($13.99 vs Mezzacorona’s $10.99) has grown in sales during the first quarter by about 8% year over year. But the biggest winner is Tenuta Rocca ($25.99-$94.99), which is up 53% so far, thanks in part, Meyer says, to a focus “in the on-premise channel, supported by winemaker visits by Andrea Ciravegna, as well as a rise in consumer interest for sustainable, high-quality wines.” 

In Germany, winemakers are seeing growth in two segments — Sekt and low and no — in part as a response to declines in Champagne and the wine market overall.

“Consumers are looking for quality, traditional method sparkling wines that deliver on price,” says Steffen Schindler, director of marketing at the German Wine Institute, the central communication and marketing hub of the German wine institute. With consumer spending slowing down, and Champagne sales declining by -10.8% last year, German Sekt by comparison continues to increase its sales. Last year, Sekt sales increased in value by 29%.

Germany, home to the dealcoholisation movement (the first patent to remove alcohol from wine was issued in 1907 in the Rheingau), is seeing enormous growth.

“Our Dr Lo alcohol-removed wines have seen rapid growth in shipments over the past year, as we establish them with our distributors nationwide,” says Kirk Wille, president and director of marketing at Loosen Bros. USA, which produces Dr. Lo under the Gebr. Loosen umbrella. “The growth in depletions that our distributors are seeing is quite remarkable, as they gain placements. The category is a small piece of our overall business, to be sure, but it is gratifying to see the positive response to the quality of the Dr. Lo wines.”

The main reason German no and lo-alcohol wines continue to lead the market, Schindler notes, is because they focus on “fruit-driven, aromatic wines, which create the best results when removing alcohol.”

As traditional wine flags, non-alcoholic wine has grown by value 22% for the four weeks ending February 22, according to NIQ.

Will more of the same pockets of success and expansion continue apace for some, while wine overall continues to contract in Q2? Or will the market overall return to a slower, but steady growth mode?

Watch this space for answers. 

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