Is the Wine Boom Over?

  There have been several professionally written articles about the dark days ahead and plenty of Internet chatter about the coming downfall of Napa. Yes, Napa because many associate American wine with Napa Valley even though Napa only produces three to four percent of the country's wine.

  Are things crashing into oblivion as anyone looking for clicks on the Internet says or is this just an adjustment?

U.S. Wineries Premium Wine Sales Growth
from Silicon Valley Bank
Click on image to enlarge

  There are many ways to look at wine trends: Sales volume, dollars, all wine consumed in the U.S., or just that from American wineries. This one looks at premium wines, generally considered any over $15 or $20. It's the growth rate for U.S. wineries for where ever the wine ends up, whether it's a restaurant in NY or a wine shop purchase in London.

  For clarification, this premium sector is considered to be doing well. If you look at very expensive wines, say over $50, they are doing even better. Sales of the $10 stuff isn't looking good. These are the trends you see in a good economy, with consumers moving up to more expensive goods.

  In this graph above there are only three years of negative growth: The Great Recession, the start of Covid, and now (mid last year, actually). This current drop is what has got many people worried. But a quick drop like that isn't a long term trend -- yet anyway. As you can see, we've had drops before and pulled out quickly. 

  This current drop off may be nothing more than a post-Covid adjustment. 

  Those Covid years went from a steep drop to a steep recovery to a steep drop. This could easily be an adjustment to those previous wild ups and downs.

  You can also see that pre-Covid there was a slowdown in growth over several years. This does show a slowing of the growth rate, but it doesn't show wine sales falling off a cliff. After so many years of big growth in the '90s and '00s, you shouldn't be surprised by a flattening of growth unless you turn a lot more people into wine drinkers.

  Is the wine boom over? Could be. Is Napa Valley about to go under. Um, no. Will there be more wineries being sold to big companies or going out of business. No doubt, just like the craft beer biz that has seen its wild growth years finally level off.