At its annual presentation this week at New York City’s Museum of Modern Art, the Wine Market Council—an independent, nonprofit trade association—and the Nielsen Company reported their findings on U.S. consumer wine trends. They declared that the “forecast is sunny but be wary of clouds.” Here are some of the highlights.
Higher consumer economic confidence: Danny Brager, senior vice president of Nielsen’s Beverage Alcohol Practice Area, cites that across major consumer goods categories, only wine, coffee and snacks have experienced consistent five-year growth (not including specific categories such as craft beer or prepared cocktails). Consumers are also willing to spend on average 3 percent more on a bottle of wine than in years past, but “the pricing sweet-spot is still between $10 and $15,” says Brager.
Millennials continue to drive market: Boomers comprise the base of high-frequency wine drinkers, according to John Gillespie, president of the Wine Market Council, but Millennials (ages 20 to 37) are not to be ignored. “The youngest Millennials will be of legal drinking age in 2015,” says Gillespie, adding, “and there are 70 million of them.” Millennials make up 30 percent of drinkers, and purchase wine over $20 with frequency, though Boomers still spend more money on average for a single bottle of wine. Also, Boomers carry the domestic market but Millennials are more likely to purchase imported bottles, underscoring the generation’s exploratory spirit.
Mainstream beer on the decline; craft beer on the rise: In the United States, wine and spirits sales have cut into beer’s market share. In 2002, 60 percent of consumers purchased beer, with only 13 percent and 27 percent purchasing wine and spirits. Today, beer still boasts the majority (51.1 percent) but it is not experiencing the same robust growth as wine or segments of the spirits industry. That said, sales of beer-adjacent beverages (like ciders and flavored malts) are growing, and of course, craft beer is still basking in its moment of double-digit growth, with a third of the market share.
Digesting demographic data: Craft beer is predominantly consumed by high income, young white men, while the Wine Market Council determined that women are more likely to be high frequency, high-end wine drinkers. While wine drinkers are overwhelmingly white, African-American and Hispanic drinkers are increasingly introduced to wine through blended wines, which is also a growing drink category. Overall, wine drinking is becoming much more inclusive.
Rise in retail: As direct-to-consumer wine sales become more available, wine drinkers are exploring their options. Tourism and winery visits drive the majority of a winery’s repeat sales and wine clubs, but retailers are also stepping up their game. According to Brager, there are now 522,000 nationwide retail outlets for wine, beer and spirits. Citing companies that have started carrying wine like Walgreens and 7-Eleven, Brager notes that there are now more chains than independent shops selling wine. “It’s helping to convert occasional drinkers into high frequency drinkers,” said Brager.