Losses continue to pile up for the American wine industry.
U.S. wine sales last year fell about 6% from 2023, according to data from industry data group SipSource. The drop is the latest in a long-term decline in demand for wine in restaurants, bars and stores that some call an “existential threat” to the industry.
Wine is not the only alcoholic beverage that has fallen on hard times; NIQ data shows sales of beer, cider and spirits have also declined. But the decline in wine is more pronounced and the entire industry is aware of the change.
“The wines have gone up and up and up all these years, but in the last few years they’ve gone down,” said Larry Duke, owner and operator of Schumer’s Wine and Liquor in Manhattan since 1978.
The wine industry received a boost in 2020 when Covid-driven closures and stay-at-home orders increased demand. But that increase has proven to be fleeting.
Wine industry scholar Mike Veseth, author of several books and The Wine Economist newsletter, pointed to generational trends to explain the decline in wine consumption.
“The baby boom generation embraced wine,” Veseth said. “We imagined that subsequent generations would continue to do that, but they haven’t.”
A 2023 Gallup poll backed up that theory, showing that younger Americans were drinking less than previous generations.
The drop in demand comes as a second Gallup poll, from August, shows that more than 4 in 10 Americans now think alcohol is unhealthy. The U.S. surgeon general issued a report Jan. 3 warning that alcoholic beverages should carry cancer warning labels.
Experts say that when younger consumers indulge, they choose pre-mixed and ready-to-drink options. In fact, premixed beverages are one of the few areas of the alcohol industry experiencing growth.
Wine, which comes in a large bottle and may require a corkscrew or extra glasses, is at a disadvantage compared to the convenience of pre-mixed drinks.
“It’s not that they don’t like wine,” said Christian Miller, director of research at the Wine Market Council, a research-focused nonprofit. “It’s just that they’re drinking a much wider variety of other things.”
Gary Decker, owner of Vinomania in Syracuse, New York, said legal marijuana has also reduced demand for wine.
“Marijuana is taking a big chunk out of it because it’s just another part of the party puzzle,” Decker said. “It’s another thing people can do.”
Added to the list of obstacles: non-alcoholic beers and liquors. Industry data shows a sharp recent rebound in sales in the sector.
Non-alcoholic beverages are advantageous not only for those wary of the health risks of alcohol, but also for the companies that serve them.
“Retailers love them,” said Bump Williams, who runs a liquor industry consulting firm and has worked in the industry for at least three decades. “If a retailer sees one of their customers who has had too much to drink, they can give them water and they don’t make any money from it. Instead, they can give them a non-alcoholic mixed cocktail.”
Non-alcoholic wines still have some catching up to do.
“Non-alcoholic beer is booming and the quality of the best non-alcoholic beer is excellent,” Veseth said. “Wine is falling behind.”
“How do you replicate the flavor?” asked Dale Stratton, an industry veteran who is CEO of a consultancy that focuses on the wine business. “I just haven’t seen a solution in the wine category that does that effectively.”
Wine is one of the most expensive alcohol options and it has become more expensive. Since the beginning of the century, the average cost per liter of wine has increased from $10 to $14.
“People’s budgets are really tight these days,” Veseth said. “So wine is feeling the crunch.”
These factors signal difficult times for the wine industry, although experts are divided on how bad the problems will be.
“This is not business as usual,” Veseth said. “It is an existential problem. Although the industry will continue, big adjustments are needed for that to happen.”
“Wine has been here forever,” Stratton said. “The wine category is going to continue here. And while there are some challenges we face right now, the wine category has been here forever and will continue to be.”
While the industry may be slow to adapt to these challenges, winemakers are not willing to give in.
“Is it really time to recall an 8,000-year-old human beverage from the market?” said California winemaker Martha Stoumen, owner of Martha Stoumen Wines. “Really? Are we just going to let it die out? It seems like we might want to think of it as a culture.”
