Though the US wine market endured a very bumpy ride in 2020, with many dire predictions of loss and doom due to the pandemic and wildfires, now that the numbers are in, the results are not that dismal. Yes, of course, on-premise wine sales plummeted, but off-premise and online sales came to the rescue. This caused the year to end with a surprising increase of 4.98% in still wine volume at 372 million 9-liter cases in 2020, compared to 357 million cases in 2019, according to BW166. Of this total, 84.7 million cases of still wine were imported in 2020.
Sparkling & Flavored Wine Volume Sales in US
However, a deeper dive into the numbers shows a different story for sparkling and flavored wine volume, with sparkling wine losing -4.2 at 27.2 million cases in 2020 against 29 million cases in 2019. This was primarily due to the depression that gripped the world in the first few months of the pandemic where no one wanted to celebrate with sparkling wine. This lifted in the summer months when people began to relax again over vacations, and sparkling wine sales surged, only to fall again in the last quarter as the virus came back again with a vengeance.
More surprisingly is the story of flavored wine, which has gained in tremendous popularity in the US market, with an increase of 90% at 32.1 million cases in 2020 against 16.9 million cases in 2019. The flavored wine category includes wine cocktails, sangria, wine spritzers, agave-wine and other innovative flavored wine-based beverages. It is expected to continue to grow as Americans seek convenience in ready-to-drink (RTD) packaging, as well as new experiences. This category has developed to compete with the highly lucrative alcoholic seltzers, such as White Claw.
When all three wine categories of still, sparkling and flavored wine are combined, including imports and bulk wine (which is part of the domestic numbers), the total wine volume sales in the US market for 2020 was 431.6 million 9-liter cases. It is important to note that these numbers may shift slightly, as new adjustments may be calculated in federal excise taxes in the new few months.
US Wine Sales Revenues Down in 2020, But Up for Some Wineries
Despite the good news on volume, total wine dollar sales revenue fell -9.9% in 2020, according to early estimates, however the loss came from on-premise accounts at -45%, with both off-premise and DTC (direct to consumer) sales achieving a 10% increase over 2019. Gomberg-Frederickson shows preliminary consumer expenditures for all channels totaled $67.3 billion in 2020 compared to $74.6 billion in 2019. Of this figure, domestic wine revenues were $51.2 billion and imports totaled $16.1 billion (see graphic above).
These numbers illustrate what has been witnessed before during times of economic stress where people lose jobs and/or savings: consumers drink more, but spend less. Interestingly, some wineries did exceptionally well during the pandemic, achieving higher sales in 2020 than in 2019. This was primarily due to innovative DTC practices at smaller wineries, such as virtual tastings, and a consumer rush on purchasing popular wine brands produced by larger wineries in retail settings, such as grocery stores.
Best Selling Wine Varietals in the US Market
US consumers primarily purchase wine by varietal, and it is also tracked this way by Nielsen scan data. The graph below illustrates the top 10 best-selling varietals by volume in 2020 for 52 weeks endings 11/28/20. For the first time, cabernet sauvignon moved into the top place over chardonnay in both volume and value, with cab totaling $3.2 billion in sales against chardonnay at $2.8 billion. The other varietals remained in similar positions, with the exception of sauvignon blanc, which increased an amazing 22% in volume and 24% in value. Rosé also continued to steal the show, with an increase of 20% in volume and 24% in dollar value. In terms of wine color, in 2020 red wine comprised 46% of volume sales, white wine 44%, and pink wine 10%., the same as in 2019. See bottom of article for more information on Hot Wine Trends in the US market.
Wine Sales Channels in 2020 – A Huge Increase in Online Wine Sales
The 2020 pandemic changed the way that Americans purchase alcohol, with an amazing 167% increase in online alcohol sales, according to Nielsen. The graph below illustrates estimated volume for wine in the off-premise (which includes online retailer volume), on-premise, and DTC online shipments from wineries. Though on-premise volume was understandably down in 2020, a recent Nielsen CGA Covid-Impact survey showed that 76% of on-premise consumers have missed visiting bars and restaurants with family and friends. This bodes well for on-premise establishments when the pandemic has retreated, and lends credence to predictions that American will celebrate and party similar to the end of WWII (McMillan).
DTC Online wine shipments from wineries performed particularly well during 2020, with the largest volume growth rate yet documented (Sovos). Volume grew at 31% as Americans reached out to purchase wine directly from their favorite wineries, and the wineries reciprocated by offering entertaining virtual wine tastings, discounts, and online events. This resulted in dollar value rising 16.5% in 2020 compared to 2019, though the average bottle price fell to $36.62. This wasn’t all bad news as many new consumers rushed to purchase wines online from wineries, electing to buy lower priced options, but still participating in the surge of online shopping.
10 Hot Wine Trends in 2021 US Wine Market
Based on key trends sweeping the US market, such as desire for convenience, and rising concerns for health, environment, and safety (Euromonitor), as well as wines sales data from Nielsen, SOVOS, bw166, Brager, and Wines&Vines Analytics, the following list of Hot Wine Trends for 2021 has been developed:
1. Sauvignon Blanc Rises –already gaining in popularity in 2019, sauvignon blanc rose an amazing 25% in dollar sales in 2020, with Americans still enjoying the crisp grassy style of NZ as well as the riper, more fruit-forward style of California. This trend is expected to continue in 2021.
2. Cans & Convenience Very Important – with outdoor activities on the rise and the desire for more convenience, wine in cans, tetra packs and plastic containers will continue to grow in the US market. In 2020, canned wine actually grew 61% in dollar growth (Nielsen), causing a can shortage in the supply chain. Small bottles and large box formats also gained in popularity, with 375ml growing at 53% in value, and 3L boxes achieving 31% value growth (Nielsen). This is an area ripe for innovation, as packaging designers try to figure out new and attractive ways to sell wine in boxes, cans, tetra pack, and plastic containers.
3. Flavored Wine Category Explodes – linked to both the convenience trend and a desire to experience new products, this ready-to-drink (RTD) wine category gives consumers creative wine cocktails, spritzers, wine seltzers and cross-products, such as the surge in agave-wine. This is another category that is ripe for growth in 2021, with much opportunity for innovation, as wine tries to fight back against the massive popularity of alcoholic seltzers, such as White Claw. The huge volume increases of 90% for flavored wine in 2020, bodes well for this category in 2021. Even more important, it is thought to be an entry category for new and younger wine consumers, before they adopt more traditional wines later in life.
4. The Rise of Low-No Wines & Transparency – the global trend for health and wellness has hit the wine category in the US a little later than other countries, but even with some Americans drinking more during the pandemic, others chose to focus on low or no alcoholic wines. Nielsen reported an impressive 37%-dollar growth in non-alcohol beer, wine and spirits for 2020 compared to 2019. Some of the larger wine corporations responded to this trend with the introduction of new low-alcohol, low calorie wine brands, such as Mind & Body, Sunny with a Chance of Flowers, Kim Crawford Illuminate, and Cupcake Light-Hearted wines. However, most of these wines didn’t hit the market until very late in 2020 and early 2021. This is an important category to watch as Americans have been asking the wine industry to be more transparent about calories, alcohol, carbohydrates, sugar, additives, and sustainable/organic winemaking. Many retailers, especially in grocery stores, are calling this category “Better for You Wines.”
5. Premiumization & Pricing Sweet Spots – Despite economic woes and job loss to millions of Americans, premiumization continued in off-premise wine sales. All price points between $11 and $25+ grew at 20%+ in both dollar value and volume in 2020, with $20-$24.99 achieving 29% growth in value and 28% in volume (Nielsen). Experts suggest that since Americans didn’t have the opportunity to buy wine in on-premise establishments where they are used to paying a high mark-up, they decided to treat themselves to higher priced wines to drink at home during the pandemic. This suggests that at least for the first half of 2021, while States race to vaccinate their populations, that premiumization will continue in off-premise, including online wine sales.
6. Online Wine Sales Boom & Stay – If one were to discuss silver linings due to the pandemic, the surge in online US wine sales would have to be the major bright spot. In 2019, online sales were still rather anemic, at around 5% in the US, compared to 30% in China and the mid-teens in Europe. However, with a focus on staying at home, Americans who had never purchased wine online decided to give it a try, resulting in 198%-dollar sales growth in wine ecommerce in 2020 (Nielsen). The good news is that experts suggest that once a consumer has a positive experience purchasing online, he/she will be a repeat buyer (WMC). Thus 2021 is predicted to be the year when wine ecommerce becomes a viable sales channel in the US, with much growth ahead for both online winery DTC and online wine retail sales.
7. Cab, Red Blends and Pinot Still Popular – Americans drink slightly more red wine (46%) than white (44%), and their favorites continue to be Cabernet Sauvignon, Red Blends, and Pinot Noir, with double digit dollar growth in all categories in 2020. Though 70% of the wine purchased is made in the USA, the top three countries from which they imported red wines were Italy, France and Portugal, with double digit dollar and volume growth (Nielsen). These figures suggest that 2021 will still be fertile ground for these popular red styles.
8. Rosé Continues to Delight – Rosé has become a staple in US market, with all styles, but especially Provence rosé considered to be a crowd favorite. This category continued to growth at double digits in both volume and value in 2020 (Nielsen). There is no sign that this rosy trend will be slowing down in 2021.
9. NY Joins Oregon as Favorite Wine Producing State – California has always produced the lion’s share of wine in the US, with Oregon as a strong favorite. 2020 was no different with Oregon wine achieving 22% dollar and 21% volume growth. The big surprise was the surge in New York wine, also at 22% increase in dollar share, but only 10% in volume (Nielsen). This is exciting news for New York wine, and suggests that wine from all three States will remain popular in 2021.
10. Sparkling & On-Premise: Get Ready to Party! – Though sparkling wine lost -4.2% in volume during 2020, because people were not that willing to celebrate in the first three months of the pandemic and during the second surge in the last quarter, it is predicted that sales will pick up when the virus has retreated and Americans feel ready to celebrate again. In fact, some experts predict that the US will party like the Roaring 20’s or the end of WWII (McMillan, Brager). Restaurants and bars will get in on the action, and it is expected that wine sales, especially sparkling, will surge in most channels towards the end of year.
Other Important Numbers
| 935 = Number of Distributors in the US (Wines & Vines Analytics, 2021) | 49% = Percentage of Americans aged 21+ who drink wine (WMC, 2019) |
| 11,009 = Number of US Wineries, with 5 largest: CA, OR, WA, TX, NY (WBM, 2021) | 54% = Percentage of American women who drink wine ; 46% male (WMC, 2019) |
| 30% – Volume Percentage of Imported Wine that Americans Purchased in 2020 (bw166) | 11 = liters per capita wine consumption in the US; 2.95 gallons (Wine Institute, 2018) |
References
- Brager, D. (2021, Jan.). Wine Industry Update. Key note Presentation at Dollars & Sense Webinar, Sonoma County Winegrowers, Santa Rosa, CA, January 2021.
- bw166 (2021). Wine Imports and Exports Report by Jon Moramarco. Available at https://www.bw166.com/
- Euromonitor (2021). Top Global Consumer Trends Report for 2021. Available at: https://go.euromonitor.com/white-paper-EC-2021-Top-10-Global-Consumer-Trends.html
- Gomberg-Frederickson. (2021). Available at: https://www.gfawine.com/products/gfr/
- McMillan, R. (2021). The SVB State of the Wine Industry Report. Silicon Valley Bank Trends & Insights. Available at: https://www.svb.com/
- Nielsen (2021, Feb.) What’s Ahead for Beverage Alcohol? Nielsen IQ Beverage Alcohol Webinar. Presentation by Nielsen.
- Nielsen CGA. (2021, Jan.) NCGA Coved-Impact Survey. Statistics Presented at Nielsen IQ Beverage Alcohol Webinar.
- Nielsen. (2021, Feb.). Nielsen Table Wine Category Segments. Wine Business Monthly, Feb. 2021.
- Sovos (2021). 2021 Direct to Consumer Wine Shipping Report. Sovos/ShipCompliant.
- Wine Institute (2018). Wine Stats & Facts – US Wine Consumption. Available at: https://wineinstitute.org/our-industry/statistics/us-wine-consumption
- Wines & Vines Analytics. (2021, Feb). Statistics on US Distributors. Available at: https://winesvinesanalytics.com/statistics/distributor/
- WMC (Wine Market Council). (2019). 2019 Wine Market Council U.S. Wine Consumer Segmentation Handbook.
- WMC (Wine Market Council). (2020, April 3). Wine Market Council Webinar: A Look at Online & Direct Wine Purchasing in a New Reality. April 3, 2020.