U.S. Wine Sales are Down

After 27 years of gains, the wine market is in a multi-year decline in sales volume. Is it post-pandemic settling out or are we in a years-long trend?

As a wise man once said ...

Sales Channels

Off-premise sales, wine you buy retail and take home, is down 6% in volume from the same period last year and 2% in value. There was a 5% drop in volume in 2022 compared to 2021. Direct-to-consumer (DTC) sales, wine sold directly to the consumer by a winery, is off 7% by volume, 2% by value. For California wineries, it's 9% and 3%. 

By Price

The upper end of the market, $30+, saw the biggest drop. Most varietals show a drop. Higher priced sparkling wine and rosé are down quite a bit, while Pinot Gris and Sauvignon Blanc are doing fine.

Direct-to-Consumer

Most DTC sales are from tasting room visitors. In 2022 tasting rooms saw a drop in the number of visitors compared to 2021 (the downward trend actually started with the summer of 2022). California saw an 8% decline, Sonoma County was the smallest at 4%. The rest of the U.S. was off by 16%. 

The largest wineries saw the largest decline; the smallest actually saw an increase in visitors. DTC is much more important to the smallest wineries, as often that's their only sales channel. The good news was sales volume is actually up with Sonoma County doing the best at a 12% increase.

Inflation

My uneducated analysis of the data says the decline is inflation-related. Wine prices went up at most wineries as their costs went up, and some consumers are no longing willing or able to pay. It was predicted that 2023 would be a tough year. 

When you look at the percentages above, such as California DTC sales down 9% by volume and 3% in value, it tells you the higher cost made up for most of the lost volume. The less expensive premium wines like Pinot Gris and Sauvignon Blanc are doing well says people are switching from pricier Chardonnay, Cabernet, Pinot Noir, and so on.

 

Data Sources

DTC tasting room data is from Wine Business Analytics. 

Other data is provided by SipSource and reported on by Terrain Agriculture. The date is for a sampling of the market, so while it may not be definitive, it shows all sales channels dropping.