US wine industry eyes millennial market

New research has encouraged the US wine industry to address decreasing wine consumption levels by focusing on millennial consumers.

Global drinks research group The IWSR has found that Americans drank 0.9% less wine in 2019 than they did in 2018, marking the first time in a quarter of a century that wine consumption in the US has fallen. The report attributed the decline to ‘changing generational habits’, and demonstrated that more young people opted for spirits instead in 2019.

According to Silicon Valley Bank’s

2020 US wine industry report, with baby boomers moderating their wine buying as they get older, wine businesses must adapt to a younger consumer to revive sales. ‘The large millennial population hasn’t begun to embrace wine,’ wrote Rob McMillan, author of the report and executive vice president of SVB’s wine division. ‘While that’s a negative, if we look at it from the other side, it’s also the wine industry’s largest opportunity.’

Meanwhile, the SVB report highlighted a ‘stuffed’ US wine supply chain, the result of a fruitful growing season, overflowing tanks and eroding consumer demand.

Harnessing this oversupply could be an important method of bringing in millennial consumers: ‘Acute oversupply will allow for better-quality juice in lower-priced bottles, which improves value and will provide an incentive for some millennials to become more consistent wine buyers,’ said McMillan.

Ultimately, the research has pointed to the need for a new approach to appeal to young consumers. ‘We aren’t doing a good enough job of giving them a reason to buy wine,’ SVB stated.

But even without the loyalty of millennials, 2019 wasn’t all bad for the American wine industry: The IWSR found that sparkling wine sales increased by 4%; SVB showed that sales of wines at $9 per bottle and above are still growing, and that the value of premium wine sales will increase by between 3% and 7% in 2020.