1578947909_social


America’s love affair with wine is waning.

Americans drank less wine last year, the first such drop in a quarter of a century, as millennials opt for alternatives like hard seltzers, cocktails and nonalcoholic beer.

The volume of wine consumed in the U.S. declined 0.9% in 2019, the first time it has fallen since 1994, according to industry tracker IWSR. The trend was ascribed to a generational shift as the number of millennials surpasses baby boomers, who drove strong demand for wine in America.

“Millennials are just not embracing wine with open arms compared to previous generations,” said

Brandy Rand,

IWSR’s chief operating officer for the Americas. “With the rise in low and no-alcohol products and general consumer trends toward health and wellness, wine is in a tough place.”

Sales of cheaper wine—under $10 a bottle—make up most of the category but have been falling in recent years, offsetting a rise in more expensive bottles. Overall, U.S. wine sales by value rose 1.1% from a year earlier to $38.3 billion.

The figures highlight how changing demographics and consumer tastes are affecting the alcohol industry. Americans have drunk less alcohol in recent years amid rising concerns about health and competition from other beverages such as ready-to-drink tea, sparkling water and coffee. In 2019, the nation drank 0.3% more alcoholic drinks, after two years of annual declines.

SHARE YOUR THOUGHTS

Are you drinking less wine lately? Have you substituted another beverage? Join the conversation below.

The Wine Institute, a California trade body, said while consumption has fallen off in recent years, it expects millennials to start drinking more wine as they get older, just like baby boomers did. It also disputed IWSR’s 2019 figures, saying its own data showed growth in wine consumption last year.

For decades, wine benefited from the theory that drinking in moderation—particularly red wine—was good for the heart. More recently, studies have disputed that finding, suggesting any amount of alcohol can raise cancer risks and that the benefits of drinking are more limited than once thought.

As well as a decline in the number of baby boomers, the generation is also drinking less because of lower disposable income, smaller homes—making wine harder to store—and health concerns, says IWSR.

Many baby boomers, those born shortly after World War II, were loyal to specific brands or categories, sticking mainly to wine or beer, but millennials tend to drink across categories, said IWSR’s Ms. Rand. The industry tracker’s data shows a U.S. preference for strong, smoky and sometimes spicy flavors, a trend illustrated by the popularity of mezcal, volumes of which grew 40% last year. The flavor choice offered by wine, compared with spirits and craft beer, has remained “relatively stagnant,” Ms. Rand said.

For 2019, volumes of ready-to-drink products consumed rose 50%, driven by hard seltzers and canned cocktails, according to IWSR. Spirits volumes grew 2.3%, helped by mezcal, tequila, cognac, bourbon and other whisky. Beer continued to decline, falling 2.3%, as demand keeps ebbing for big domestic brands such as Budweiser. Craft beer volumes increased 4.1%, while low and no-alcohol beer climbed 6.6%.

Wine consumption could be further hit by U.S. tariffs on European imports. The U.S. last year levied a 25% tariff on bottled table wines from France, Germany, Spain and the U.K., and has threatened further measures.

Stacia Garcia,

a 47-year-old Realtor based in Boca Raton, Fla., recently stopped buying wine after noticing she felt unwell after drinking it. “I’m going to stay away from wine while I attempt to lose weight,” says Ms. Garcia, “I don’t miss wine like I thought I would.”

In response to declining consumption, some big companies are selling off mass-market wine brands and doubling down on high-growth areas.

Constellation Brands Inc.

—which owns Robert Mondavi wines, the Prisoner Wine Co. and Ruffino—is selling a string of its low-margin wine brands so it can focus more on its premium products. Last year it said virtually all growth came from products priced $11 and higher.

Diageo

PLC has also sold most of its wine brands.

Winemakers are also selling more in cans and cartons. Traditional wine bottles don’t lend themselves to casual outdoor drinking, or consumers wanting a single glass—a problem given more Americans live alone than in the past, according to Census Bureau data.

As more people cut back on booze, non-alcoholic breweries, bars and spirits alternatives and are popping up to give the so-called sober curious a range of options beyond conspicuous non-consumption. Photo: Adam Falk/The Wall Street Journal

Wine could see a boost from online shopping. IWSR forecasts U.S. online alcohol sales to rise from $3 billion in 2019 to $13.4 billion by 2024. Sales have so far been driven by wine, which has fewer state-level restrictions than other drinks. San Francisco-based online wine retailer Wine.com says its revenue rose about 16% last year and that millennials make up about a third of its customers.

“The old way of buying wine where you’re standing in front of a wall at retail with nothing to go on but labels, that’s not good enough for this generation,” said

Rich Bergsund,

Wine.com’s chief executive. The site allows customers to chat with sommeliers, read expert reviews and watch videos before they buy.

Mr. Bergsund says millennial customers spend as much on a bottle as baby boomers, with the average selling price per bottle on the website being $30. They currently buy less often but Mr. Bergsund expects that to change over time. “It’s a very predictable pattern, spend more on wine as you go through life.”

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



Source link

About the Author:

Leave a Reply