Wine's Big Problem

Premium wine sales are down in the U.S. Premium generally meaning any wine over $20/bottle; luxury wines are over $50. Sales are down across most age groups except those over 60, and are really down for the youngest drinkers.

Sales boomed from the time of the French Paradox in the '90s until the Great Recession of '08-'09. With the recovery, sales increased, but not as rapidly as before. Early Covid saw a short uptick, then a dropoff more recently. Is it a temporary adjustment or a sign of things to come?

click on graph to enlarge

Many in the wine industry wring their hands and stay up nights, probably with a bottle of wine, trying to figure out how to right the ship. There are people charging money to attend industry conferences where speakers will address the issue.

People talk about health awareness or competition from craft beer and cocktails.

No one wants to address the elephant in the room. Price.

Let's look at Napa because everybody knows about Napa Valley cabernet. People come from all over to go wine tasting in Napa. The average price of a bottle of Napa cab was almost $75 in 2022, up from $65 in 2021. A survey showed that 70% of Napa wineries plan to raise prices in 2023. If that's not a big WTF moment, I don't know what is. Supply and demand, the price of grapes, greed, capitalism, whatever you want to blame it on. 

Of course, prices are up everywhere. But even if your average cabernet is $40 somewhere else, how many 20-somethings are going to dish out the money for it? As prices rise you lose customers; the ones with the less disposable income, like young adults.

Maybe this is why U.S. Sauvignon Blanc sales were up 24% last year. SB is what you might call the last affordable premium varietal wine.

Will prices come down as sales drop? I've never seen a price drop in the wine industry. I'm wondering and worried that good wine will become even more of an elitist beverage, where wineries will make up for lost sales on profit margin.