US Landscapes 2020 reveals a shrinking regular wine drinking population, with saviors of the wine category being older drinkers as wine faces growing competition for younger drinkers from other alcoholic beverages – and from the yoga studio
The times they are a-changing. Across the world we are observing a more health-conscious and lifestyle-conscious consumer, with more choice than ever before in terms of both alcoholic and low-no alcohol beverages. The net result of this trend appears to be coming home to roost in the US wine market in terms of a shrinking population of consumers drinking wine on a monthly basis. Since 2015, the number of regular wine drinkers in the US has fallen by 11 million from 88 million to 77 million, meaning that only one in 3 adult Americans now drinks wine at least once a month.
There is one silver lining. In our 2020 US Landscapes report, published on January 13th we estimate there are now 8 million more yearly-or-more-often wine drinkers in the US compared with 2015, a total of 118 million (or 72% of all alcohol drinkers). At the same time, the number of people saying they drink alcohol has remained stable, suggesting that wine is becoming a more broadly-consumed product, even as its heavier users become less numerous. Other market sources have also pointed towards a reduction in volume but an increase in value in the US wine market. The IWSR states that wine consumption in the US decreased by 0.9% in 2019, the first decline in 25 years, whilst Silicon Valley Bank’s 19th annual State of the Wine Industry report shows a decline the volume of wine sold (amongst their respondents) in 2019, based on a combination of waning consumer demand and acute over-supply, particularly from California.
The reduction in frequency of consumption is a broad-based trend: as well as the decline in monthly wine drinking since 2015, a significantly smaller proportion of regular wine consumers in the US say they are drinking wine twice a week or more over the same time period. In particular, this movement is being driven by female regular wine drinkers in the US, who are consuming wine less frequently than men – an average of 8.8 times a month compared with 9.8 times for men.
Of equal note to the category is the tendency towards an ageing wine drinking population in the US. Over the last year there has been a significant increase in the proportion of regular wine consumers in the US who are aged over 55. The plus side is that this is a group of consumers more likely to have higher incomes when compared with younger wine drinkers, and perhaps more leisure time. At the same time, there has been a 5% decrease in those aged 25-34 as regular wine drinkers in the category since 2015. This means that, of the 11 million ‘lost’ monthly consumers since 2015, the vast majority of the loss – 8.5 million or 77% of the decrease – has come from those aged 21-34.
In fact, Millennials are now the generational group least likely to drink wine on a daily basis. There appear to be two correlating factors at work here. First, this generation is at the forefront of the tendency to drink relatively less alcohol than their parents’ generation at the same stage, and spend more time and money on health and lifestyle such as a regular yoga class; second, their alcoholic beverage portfolio includes a broader swathe of products than their peers of 30 years ago, including craft beer, spirits, hard cider and hard seltzer.
By contrast, the wine consumption frequency of those aged over 55 has remained stable over the last three years – a group of consumers seemingly less persuaded by the healthy-living zeitgeist, nor prone to category switching and calorie counting. In some ways, therefore, the over-55s are the saviors of the wine category – without their commitment to regular wine drinking, US wine volumes would now be in decline.
One parting thought: the paradox between old and young in the wine category is slightly more complex. Our data suggests that those US Millennials who do participate in the wine category regularly are far more likely to be strongly connected to wine – 28% of regular wine drinkers in the US aged between 21 and 34 are classified as ‘highly involved’, compared to 17% of the 55 and overs. What does ‘highly involved’ mean? In our surveys we get respondents to rate their agreement to a series of statements – how much time they spend deciding what wine to buy, how important wine is in their lifestyle, and so on. Younger American consumers connect with wine in a way their parents’ generation never did. In future, the smart money will be on businesses that can build a deeper (and, by nature, more lucrative) relations with a smaller pool of consumers, buying less often.