Wine professionals and regular wine drinkers often imagine that many, if not most, of their fellow citizens share their tastes and behaviour patterns. These people, the thinking goes, may not all drink the same kinds of wine, but they’re probably pulling a cork or removing the screwcap from a bottle this evening, just like us.
Except, in the US today, that’s far from the case. As the Wine Market Council discovered last year when it analysed research by Caravan Surveys into 4,470 U.S. consumers, including 1,584 wine drinkers in September and October 2023.
As the Council president Liz Thach MW revealed at the Annual Membership Meeting, only around 34% of adult Americans drink wine in any meaningful sense. Of these, less than two thirds consume it at least once a week, with 14% only doing so ‘more often than once every two to three months’. Of the remaining population, 11% drink wine ‘infrequently – less than once a quarter’ and 29% drink ‘alcoholic beverages but little or no wine’. Over a quarter – 26% – of US citizens say they drink no alcohol at all, though previous research has shown that at least some of these consume beer without acknowledging it to be an alcoholic beverage.
Only around 34% of adult Americans drink wine in any meaningful sense.
Interestingly, for long-term observers of the US market, there is nothing new in the revelation that only a third of the population drinks wine; this is the figure many will recall from two or three decades ago. However, today only one in four or five Americans is what most professionals would probably consider a ‘wine drinker’.
More strikingly, as Christian Miller, the Council’s research director announced, wine sales have recently declined along with most other alcoholic beverages. He said the research attributed this primarily to ‘wellness’ and ‘economic belt tightening’, with other beverages representing a ‘secondary factor’. The impact of legal cannabis on wine consumption was, he continued, “theoretical”.
Cannabis vs. wine
Separate research suggests otherwise. A 2023 report titled ‘Cannabis Beats Booze’ by TD Cowan showed that while alcohol sales fell, those of legal cannabis rose by 4% over the four years to 2023, with further growth of 7% per year expected over the next five years. The report stated, “we believe that [over that period], the cannabis category will add 18 million [people who have consumed it over the last month] while alcohol will lose two million… as consumers increasingly embrace cannabis and temper their alcohol consumption.”
Similarly, data from Statistics Canada also suggests that since recreational use of the drug north of the US border was legalised in 2018, spending on it has risen to the equivalent of CAD$150 ($110.59) per adult per year. Meanwhile, the volume of alcohol sold has fallen for the second consecutive year, though only by 1.1%. According to Grand View Research, "The global legal cannabis market size was valued at $22.1bn in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 25.5% from 2023 to 2030."
Those who believe that this kind of growth will inevitably have an increasing impact on alcohol, point to real-world analysis by the US Bureau of Economic Analysis (BEA) which shows that alcohol is already ‘underperforming’ in states where the drug is legal compared to those in which it is still prohibited. Recent legalisation in Minnesota and Ohio is expected to create sales worth $37 bn in 2027. Will these states see a commensurate reduction of their alcohol market?
And then there's no-lo...
Returning to the Wine Market Council report, Miller said that consumers have done “some switching” between wine, RTD cocktails and premium beer. A growing number, has also been drinking no-and low alcohol beverages, US sales of which, according to IWSR, enjoyed a 25% CAGR from 2019-23 and 29% last year with continued growth expected of over 15% in the years to 2027.
In the context of people wanting to control the amount of alcohol they consume, and its effects, there is a growing body of data showing that today’s consumers enjoy alcohol and lo-no alc beverages on the same occasions. Anecdotal evidence suggests that the same is true of cannabis which may be taken in the form of a drink or an edible rather than smoked.
...and social control
Another factor that is quietly being discussed is the impact of smartphones and social media on alcohol consumption. Now that everyone with a phone has become a photographer or even a potential paparazzi, today’s consumers are aware of the dangers of being captured digitally in an image over which they have no control. A brief moment of dancing on the table after a couple of bottles of red could come at the cost of a job or a relationship.
You can only spend a dollar once
Coca Cola’s theory of ‘share-of-throat’ reasonably posits that people can only consume one beverage at a time. The more recent ‘share-of-buzz’ extends this to include cannabis. Taking these into account, it is hard not to see a zero-sum game in which a win by an RTD, beer, no-lo beverage or consumable cannabis, is a loss to wine.
Similarly, if Miller is correct in blaming ‘belt-tightening’ for at least some of the decline in US alcohol sales, it seems only logical that consumers with a limited number of dollars will not simply spend them on cannabis or no-lo alcohol in addition to the alcohol they would previously have purchased. And, if these alternatives, along with newcomers such as sparkling teas and kombuchas are added to the mix, it is hard not to foresee a continued decline in wine sales. Only 13% of wine drinkers, according to Wine Market Council research, drink wine to the exclusion of other beverages, so that leaves a very large cohort that’s open to other options.
Coca Cola’s theory of ‘share-of-throat’ reasonably posits that people can only consume one beverage at a time.
And then there's demographics
When it comes to who is drinking wine in America, the research reveals that moves towards inclusiveness have been more effective than is sometimes supposed, but there is still some way to go. In an ideally balanced world, the percentage of wine drinkers that fall into any demographic group would be similar to that of the nation as a whole. In the US, for religious or other cultural factors regarding alcohol, this is still far from the case. Today, the Black community represents around 13.5% of the total population, but only roughly 12% drink wine. This difference may be at least partly explained by the fact that the Black population is relatively young, with a full 26% being below the age of 20 in 2022, and thus below legal drinking age, but there is no more guarantee that they will suddenly discover the appeal of Cabernet and Chardonnay on their 21st birthday.
The Asian population is even more under-represented, with a 6% share of US citizenry and a wine drinking figure of 5%. Here, religious rules regarding alcohol may be a factor.
But the really big gap, in sheer numbers, is among Hispanics who make up around 19% of the population. Only 15% drink wine. This is significant, when one considers that this is the second fastest-growing demographic group by race/ethnicity, with numbers increasing by 80% since 2000, compared to just 19% for whites. Asian numbers have grown even faster - by 104% - though from a far smaller base. Failure by the wine industry to penetrate these groups is only likely to exacerbate the recent decline.
Hispanics are also significantly younger than the rest of the US population, with a median age in 2021 of 29.5, compared to the national average of nearly 39. According to the Wine Market Council, this places them on the margin of the two groups that consume the most wine: millennials, who are now 27-42 years old and Baby boomers, who are 49-77.
Taken together, Blacks, Asians and Hispanics make up over a third of the US population and they all drink far less than, and are far younger than, the national average. According to US census estimates, in 2060, there will over 400m Americans. Of these, the 'non-Hispanic White population' that is currently doing the most wine drinking is "projected to shrink over coming decades, from 199m in 2020 to 179m people — even as the U.S. population continues to grow. Their decline is driven by falling birth rates and rising number of deaths over time as the non-Hispanic White population ages."
But this trend is not restricted to wine. Gallup research from 2023 found that
- The percentage of 18- to 34-year-olds who are Black, Hispanic, Asian or another racial minority has nearly doubled over the past two decades, making up just under a third of the age group in Gallup’s 2001-2003 data to about half of it today.
- Non-White Americans have persistently been less likely than White Americans to use alcohol, and this is seen across all age groups. In 2021-2023, there is a nine-point difference among the youngest group: 57% of non-White 18- to 34-year-olds drink, compared with 66% of White young adults.
Of course, it's possible that a larger proportion of all these minorities can be persuaded to become wine drinkers. But given the relative failure to achieve that objective wi the non-Hispanic White population over the last three decades, it remains to be seen whether that is an achievable objective.
Money matters, and age
In 2022, the median US household income was $80,610. For Hispanics, the figure was $65,540 while, for Blacks, it was just $56,490. That gap of $14-24,000 of potential spending money is significant for the wine industry.
Only 15% of US consumers earning less than $50,000 annually drink wine. The figure for those earning over twice this figure is 53%. Most of the wine being drunk by millennials is being enjoyed by the nearly 20% who earn more than $100,000.
16-22 year-olds, surveyed in 2018, reported drinking over 20% less than millennials did at the same age.
And then, of course, there’s Gen Z. A little less than third of this 67m-strong US cohort which - overall - represents 32% of the world's population fall into the 21-26 age group that can legally drink in their country but, among these, Thach acknowledges, wine consumption is “concerning” because it has dropped “way back” recently.
This trend was foreseen in a 2018 report by Berenberg Research which surveyed 6,000 16-22 year-olds. At the time, respondents reported drinking over 20% less than millennials did at the same age. Strikingly, nearly two thirds – 64% – thought they’d drink alcohol less frequently than previous generations when they grew older.
These findings are supported by the Gallup 2023 research which showed that while 35-54 year-olds still drink the same 3.8-3.9 alcoholic drinks per week as their peers of the same age were enjoying in 2001, the trend for 18-34 year-olds is quite different. Twenty years ago, they were knocking back 5.2 drinks per week; a decade ago that had dropped to 4.5 and today, it's down at 3.6 - a fall of around 30%. Those who believe that disaffection with wine - or alcohol - is cyclical and that human behaviour will revert to some kind of previous norm, should look at these figures carefully. Would you invest in a corporation whose CEO shrugged off a clear 20-year trend?
In a response that should particularly concern those who are focused on combating WHO warnings about links between alcohol and cancer, these young consumers also said that mental health concerns were as important to them as physical ones when deciding whether or not to consume alcohol. Gallup's 2023 research found that 65% of young adults aged 18 to 34 think alcohol is unhealthy - compared to 37% of adults 35 to 54 and 39% of those aged 55 or older.
Finally, the Wine Market Council reported that education matters – and they were not talking about ‘wine education’. Approximately just over half - 52% - the 44% of the US population who have college degrees drink wine. The figure for their less academically-qualified compatriots is under 20%.
Spicy solutions?
So, how is the industry to react? Danny Brager, Wine Business Analyst and former Senior Vice President of Nielsen’s Beverage Alcohol Practice Area said “There is an opportunity with the right product to meet some consumers’ needs” if companies are prepared “to think a little bit outside the box.” While pointing out that some US brands such as Josh, Caymus and Juggernaut are all continuing to grow, he referred to the success of alternative packaging, including Tetra, BiB and premium wine in cans.
All of these may help, but so, more significantly, might some of the initiatives favoured by another speaker, Chris Riboli, vice president of Riboli. This is the company behind the Stella Rosa brand, producer of a range of low-strength, semi-sweet and sparkling fruit-flavoured wines and a recently-launched chili-flavoured trio. The Stella Rosa Pineapple & Habanero, Mango & Thai Pepper, and Lime & Jalapeno may have more in common with a Margarita or Tabasco-rich Bloody Mary cocktail than a Merlot, but they are all selling very well. Indeed, the Pineapple & Habanero was last year’s top selling new SKU in the US.
Given the often negative industry response to zero-alcohol wine, it is hard to imagine many traditional professionals or enthusiasts empathising with a taste for any of these flavoured beverages, but they’re almost certainly doing more to keep the US wine industry afloat than many of the other initiatives the traditionalists are likely to come up with. And at least they involve opening a bottle and pouring a glass or two, even if there's not a lot of terroir involved.
