Could This Be a Big Reason Why Wine Sales are Down?

You've heard that wine sales are looking gloomy, and you've probably heard different reasons why.

Younger consumers don't think it's cool because their parents drink it. There's too much competition from newer beverages like RTDs (ready-to-drink alcoholic drinks in cans), seltzers, ciders, and craft beer.  There are health concerns. Another contributing factor is a post-pandemic let-down after huge sales just after businesses reopened in 2021. These all contribute, but price may be key.

 

from Direct to Consumer Wine Shipping Report

 

In 2025 California wine prices went up eleven percent. Since 2000 Napa Cabernet prices are up 189% while the California average has gone up just over 100%. Interestingly, Sonoma Cab prices have remained flat in that time. 

The average price of a Napa wine hit $108 a couple of years ago. Sonoma average cost was $57, just a bit over the state average for premium regions. Washington and Oregon were just over $50. This data from a Silicon Valley Bank 2023 survey.

Many of those other reasons for the drop in sales were around in the pre-pandemic years. People in their 20s were never big wine drinkers. Cans, seltzers, ciders, and beer have on the market for a while. Post-pandemic we were hit by inflation, and not just on wine. Premium wine (over $20) is considered a luxury good. When money is tight the middle-class cuts out luxury goods. 

The lower end of the wine market (under $15) is down the most. The moderate segment ($20 to a bit under $100) is down somewhat. The lux end wines over $100 are doing well because the consumers with lots of money aren't feeling the inflation pinch as much as someone making $40,000/year. You know what other product has rising sales in the luxury segment, cars and trucks over $70,000. I bet these aren't the only products seeing this trend.

Wine prices had to increase as inflation hit their suppliers, then came tariffs. Lower priced wines saw a bigger hit as a percentage of price. Let's say the per bottle costs for labor, materials, and overhead went up $5. A $12 bottle is now $17 and a $150 bottle is now $155. The only startled consumer will be the one shopping in the under $15 range. The per bottle rise is also affected by the number of bottles produced. Some brands make a million bottles, others ten thousand.

Wineries are caught between going with lower prices and a slim-to-no profit; or keep the profit margin and don't sell the inventory. For the consumer this means bargains are here and more should be coming.