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How the Wine Industry’s Slump Will Affect Consumers

Wine Industry's Slump Will Affect Consumers

Don’t be surprised to see some changes in how wine is marketed and sold. The Silicon Valley Bank has released its annual U.S. wine industry report, and the results aren’t pretty.

It says that the wine industry is in a “negative growth phase” and that “adoption by new and younger consumers is lagging.”

The report notes that while the premium side of the wine industry experienced a strong year, the U.S. wine industry as a whole had negative sales volume growth due to a decrease in sales of lower-priced wine.

Some of the key takeaways include:

· Many younger consumers prefer to drink other adult beverages

· The only growth is among consumers over the age of 60

· There’s an increasing number of people (called “neo-prohibitionists”) who abstain from alcohol completely or at certain times, such as Dry January

"Concerns about alcohol on health, difficult global economic conditions and the growing influence of climate change is impacting consumer behavior,” said Silicon Valley Bank Wine Division founder and report author Rob McMillan in a statement.

The report further explains that “[the strength in sales to baby boomers] would be easier to tolerate if the industry were growing. The opportunity to gain additional sales growth from a cohort with a median age of 66 will prove difficult.”

What Does This Mean for Wine Consumers?

We should expect to see some changes in how wine is promoted as the wine industry attempts to turn the tide on what appears to be a shrinking market. Here’s how the wine industry’s slump will affect consumers.

We may see fresher, improved messaging about wine.

Wineries are likely going to update their marketing to try to capture new markets. The report recommends that wineries conduct more outreach to consumers that don’t live nearby, more online engagement, and possible cross marketing with other luxury companies.

The report also suggests that the wine industry should spend more money on advertising overall and tout features about wine that don’t get a lot of press, such as the fact that wine production is more “green” and labor-oriented than other areas of agriculture and that wine is more healthy than additive-laden beverages.

Visiting a winery may become more fun than ever.

The concern about younger consumers’ lagging demand for wine was echoed by experts speaking at the 2023 Direct to Consumer Wine Symposium, the industry’s annual national summit of direct marketing and sales.

And while it has been historically difficult for the wine industry to win over younger drinkers we’ll likely see more wineries court them since that’s where the potential growth is.

Wine Industry's Slump Will Affect Consumers

One way to do so is to amplify the wine tasting experience.

For example, Gaynor Strachan Chun, Director of Strategic Planning at WineGlass Marketing in Napa, California recommended at the Symposium that wineries reevaluate their tasting rooms, make them more entertaining, and create more “Instagram moments” in them. While the focus there may be on younger people, all visitors will reap the benefit.

More wine will be sold in less conventional but perhaps better containers.

Wineries may also turn to more user-friendly alternative packaging, as consumers, particularly younger ones, are looking for businesses to meet their lifestyle needs, such as more portable wine to take on a hike, according to Symposium speaker Barbara Gorder, President of San Francisco Bay area marketing services firm Undisclosed Location.

Wine Industry's Slump Will Affect Consumers

This packaging will also be more environmentally friendly, shifting away from heavy glass bottles and towards bag and box wine, says Jason Haas, General Manager and Partner at Tablas Creek Vineyard in Paso Robles California, also speaking at the Symposium, His winery has been moving in this direction.

“Silicon Valley Bank raised some serious concerns….Efforts toward real sustainability are no longer part of marketing and identity. It will be the bar you need to clear…to appeal to younger consumers,” he warned.

Changes are never easy, especially in a traditional industry like the wine industry. But it sounds like these changes will help wine producers. They also seem to benefit wine consumers. Let’s see what happens!

We hope that you find these insights on how the wine industry’s slump will affect consumers illuminating.

What do you think of these developments? Do you believe the wine industry is in trouble? And if so will it evolve accordingly? Let our readers know! Send us a message at Always feel free to reach out to us with any questions or feedback.

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