At its annual presentation last week in New York City, the Wine Market Council and the Nielsen Company reported their findings on U.S. consumer wine trends, saying that the "forecast is sunny but be wary of clouds."
Millennials continue to drive the market, even though Baby Boomers make up the base of high-frequency wine drinkers, said John Gillespie, president of the Wine Market Council. With the youngest Millennial hitting legal drinking age in 2015, Millennials already make up 30 percent of drinkers, and their participation is expected to change the market in the next few years. For instance, when they buy wine, they frequently spend more than $20 at retail; Boomers still spend more money on average for a single bottle of wine. Boomers also are more likely to favor domestic wine while Millennials are more likely to purchase imported wines.
Danny Brager, senior vice president of Nielsen's Beverage Alcohol Practice Area, said that among all major consumer goods categories, only wine, coffee and snacks have consistently grown over the last five years. The sweet spot for pricing at retail remains between $10 and $15, however. He warned that studies of craft beer buying behavior revealed that many wine drinkers are "getting into" craft beer, a challenge to the stability of the number of wine drinking occasions.
Wine sales over-all were up to 297 million cases, an increase of 1.6 percent or five million cases, reported Gillespie.
At another important annual presentation, the Unified Wine & Grape Symposium in Sacramento, the largest wine industry conference in the United States, Jon Frederikson, president of wine consulting firm Gomberg, Fredrikson and Associates, reported that U.S. wine shipments increased 2.7 percent to 370 million cases last year, although growth slowed. Even sales of moscato, the latest big hit within wine sales, slowed.
Frederikson warned that the wine industry needs to innovate to capture the attention of drinkers as consumption of other types of alcohol grows. With craft beer and cider sales on fire, wine producers and marketers are beginning to worry that drinkers looking for the next big thing may be scanning beyond the wine menu.
Wine and spirits were the preferred drinks among drinkers under 30 years old, an improvement compared to two decades ago, Fredrikson said. In 1994, 71 percent of drinkers in that age group preferred beer over wine and liquor; by 2013, beer was the preferred drink for 41 percent of drinkers in that age group.
Red blends were hot and grew in most retail price segments, while pinot grigio enjoyed 6 percent growth. Pinot noirs priced above $10 at retail showed gains, with 20 percent growth in the $10 to $14 segment, 15 percent growth in the $14 to $20 segment, and 13 percent growth for those priced $20 and up. Chardonnay saw losses between $3 and $7, but grew 7 percent priced between $10 and $14.