The U.S. wine industry is grappling with a significant downturn, with sales dropping by nearly 6% in 2024 compared to the previous year, according to data from SipSource. This decline marks the latest in a prolonged period of falling wine consumption across restaurants, bars, and stores, with some industry experts warning of an “existential threat” to the sector.
While wine is not alone in facing challenges—sales for beer, cider, and spirits have also dipped—wine’s decline appears more pronounced. The downturn is especially evident in the broader shift away from traditional alcoholic beverages, a trend that has many within the industry concerned.
“Wine has seen years of growth, but the past few years have been marked by a sharp decline,” said Larry Duke, owner of Schumer’s Wine and Liquor in Manhattan since 1978.
The industry’s difficulties began to take root after a temporary surge in demand during the COVID-19 pandemic, when lockdowns and stay-at-home orders caused an uptick in alcohol sales. However, that spike has since proven to be short-lived.
Mike Veseth, a wine industry scholar and author of The Wine Economist newsletter, attributes the drop to generational shifts. He notes that the Baby Boomer generation embraced wine enthusiastically, but younger generations have not followed suit. A Gallup poll conducted in 2023 supports this, showing a decline in wine consumption among younger Americans compared to previous generations.
This decline coincides with another Gallup poll from August, revealing that more than 40% of Americans now consider alcohol to be unhealthy. Additionally, the U.S. Surgeon General issued a report in January recommending that alcoholic beverages carry cancer warning labels.
When younger consumers do indulge, many are opting for premixed, ready-to-drink beverages. This category has emerged as one of the few growth areas in the alcohol market, leaving wine at a disadvantage due to its traditional packaging and preparation requirements.
“It’s not that they dislike wine,” said Christian Miller, research director for the Wine Market Council. “It’s that they are drinking a much wider variety of other things.”
Other factors contributing to wine’s decline include the legalization of marijuana in several states, which has shifted consumer preferences. Gary Decker, owner of Vinomania in Syracuse, New York, observed that marijuana now competes with wine as an alternative recreational option. “Pot is taking a big chunk out of it,” he said.
In addition, the rise of nonalcoholic beers and spirits is impacting the wine market. These products are appealing not only to health-conscious consumers but also to businesses. “Retailers love nonalcoholic drinks,” said Bump Williams, a beverage industry consultant. “They can offer a nonalcoholic cocktail instead of a water, which allows them to make money while catering to patrons who may have had too much to drink.”
While nonalcoholic wines have not yet gained significant traction, experts believe the quality of de-alcoholized beer has improved, while wine lags behind in this regard. “The quality of the best de-alcoholized beer is excellent,” Veseth said, “but wine is lagging.”
Another challenge for the wine industry is its cost. The price of wine has steadily increased over the past two decades, with the average cost per liter rising from $10 to $14. “People’s budgets are just really tight these days,” Veseth noted, adding that wine is feeling the impact of economic pressures.
Despite these mounting obstacles, experts are divided on the future of the industry. Some believe the situation represents a fundamental challenge that requires significant adjustments. “This is an existential problem,” said Veseth. “While the industry will continue, there are big adjustments needed.”
Others remain more optimistic, emphasizing wine’s long history. “Wine has been here forever,” said Dale Stratton, a managing director at a wine-focused consultancy. “It’s facing challenges now, but it will continue to be a part of our culture.”
California winemaker Martha Stoumen expressed defiance in the face of the current struggles, questioning the prospect of abandoning such a deeply rooted cultural tradition. “Is it really time to retire an 8,000-year-old human beverage?” she said. “Are we gonna let it go extinct?”
As the industry faces an uncertain future, winemakers are holding firm, determined to preserve the legacy of one of the world’s oldest alcoholic drinks.
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