State of the US Wine Industry in 2016 – Trends and Statistics

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In 2016 US consumers continue to reach for wine as an enjoyable beverage, even with craft beer grabbing an increased share of the alcohol beverage market.

A review of the 2015 wine statistics and buying trends for 2016 are generally positive. Most experts predict another good year for wine, at its usual 1 to 2% growth rate in the US. Despite fluctuating stock markets, a very competitive alcoholic beverage industry, whispers of recession, and fast-moving social media/apps that can influence trends overnight, in general wine seems to be well positioned for 2016. However it could be a pivotal year for American wine, if the industry doesn’t begin to innovate as fast as the competition.slide1

Statistics for the US Wine Industry in 2015

  • Revenues for US Wine Sales = $38 billion, a 1.3% increase from 2014 (Gord0n, 2016)
  • Number of Outlets in the US selling wine = 545,907 (Brager, 2016)
  • Total cases shipped: estimated 323 million, a .07% increase from 2014 (Impact Databank, 2016)
  • Percentage from California = 60%
  • Percentage from Other States = 9%
  • Percentage from Imports: 31%, (21 million cases in bulk)
  • The US continues to be the largest wine consuming nation since 2010 (Wine Institute, 2015)
  • 2015 is the 23nd consecutive year of grown for US wine sales 

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US Wineries & Consumers

  • Number of US Wineries in 2015 = 8702 (Fransen, 2016)
  • 5 Largest Wine States by # of Wineries: California 4054, Washington = 718, Oregon, 689, NY = 367, Virginia = 262
  • Percentage of US Adults who drink wine: 40% (Halstead, 2016)
  • US Wine Consumption per Capita: 3.14 gallons (11.9 liters) in 2014 (Wine Market Council, 2015)
  • Gender Percentage = 57% female and 43% male (Nielsen Spectra, 2016)
  • High Frequency Wine Drinkers = 35% of US wine drinking population, or those who drink wine several times per week; an increase of 2% since 2010 (Gillespie, 2016).
  • Percentage Sales by Wine Color = Red: 46.3%; White: 44.3%; Pink: 4% (Brager, 2016).
  • Largest Wine Consuming Generations = Millennials at 36% and Baby Boomers at 34% (Gillespie, 2016) 

Wine Sales Channel Performance in 2015 

Off-Premise– sales of wine in grocery stores, wine shops, and other off-premise establishments continued to perform well, with double digit value and volume growth in 4 price points: $11 – $14.99, $15 – $19.99, $20-$24.99 and over $25 (Brager, 2016). Despite this, 75% of the wine in the US is still sold at $9 and under. (Fredrikson, 2016)

On Premise – sales of wine in restaurants, bar, and other on-premise establishments continued to remained relatively flat in 2015. Dollar sales were up .1%, but volume was down by -4.1%. Varietals selling well on-premise were Prosecco, Sauvignon Blanc and Cabernet Sauvignon (Guest Metrics, 2016).

Direct to Consumer Shipping (DTC/Ecommerce) – online wine sales and shipping direct to consumer was a bright spot in 2015. According to ShipCompliant (2016), revenues hit $2 billion, an increase of 8.1% from 2014 with 4.2 million cases shipped. Thought still only 1 to 1.5% of total wine sales volume in the US, DTC is doing well and expected to increase over the next few years. Average bottle price was again $38, and wineries can now ship directly to 43 states (Fredrikson, 2016).

 US Wine Exports – though not a large wine exporter because the US tends to consume most of its own wine, in 2015 the US exported 51.2 million cases worth $1.61 billion in revenues (Wine Institute, 2016). This was up 7.6% in revenues and 4.1% in volume from 2014.

Hot Wine Trends Now and for 2016

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Premiumization Continues– the desire to try a more premium product and pay more for it, or “premiumization” is expected to continue in 2016 for wine and other alcoholic beverages. This is reflected in consumers paying more for wine and the double digit increases in the $11 – 25 price range. This should continue unless something happens in the economy to spook consumers.

Hot Wine Styles: Sparkling & Sangria – though still table wine continues to grow in value and volume, sparkling wine, especially Prosecco, is extremely popular in America and grew at 11.7% in value, while Sangria grew at 9.8%, according to Nielson (Brager, 2016).

5 Most Popular Wine Varietals – surprisingly the slightly tart and refreshing style of Sauvignon Blanc won the prize for most increased value(13.3%) and volume change (10.7%). This was followed by the continuing hot trend of Red Blends, Pinot Noir, Cabernet Sauvignon and then Pinot Grigio (Fredrikson, 2016). However, the highest volume varietal sold in the US continues to be Chardonnay.

Most Popular Imports – Americans continue to be in love with wines from Italy and New Zealand. However both France and Portugal made great showings in 2015 with 10.8% and 8% increases in value for wines from both countries (Brager, 2016).

Fastest Growing Wine Containers – though the 750 ml glass bottle still dominates the US market at over 50% of the volume of wine sold, the 3 Liter Box and Tetra pack continued to grow in popularity (Fredrikson, 2016)

References

  • Brager, D. (2016). US Wine Consumer Trends – Battle for the Next Pour. 11th Annual Wine Market Council Research Conference on U.S. Wine Consumer Trends. Jan. 25, 2016. New York, NY.
  • Franson, P. (2016). Number of United State Wineries Reaches 8,702. Wine Business Monthly, pgs. 76-81, Feb. 2016 Issue.
  • Fredrikson, J. (2016). State of the Industry. Presentation at Unified Wine & Grape Symposium. Jan. 27, 2016. Sacramento, CA.
  • Gillespie, J. (2016). Overview of US Wine Industry. 11th Annual Wine Market Council Research Conference on U.S. Wine Consumer Trends. Jan. 25, 2016. New York, NY.
  • Gordon, J. (2016). U.S. Wine Sales Total $38 billion. Wines & Vines, Jan. 15, 2016. Available at: http://www.winesandvines.com/template.cfm?section=news&content=163380
  • Guest Metrics. (2016). ON-PREMISE TRENDS END THE YEAR ON A LOW NOTE, CRAFT SPIRITS BIG WINNER IN 2015. Guestmetrics.com Blog. Jan. 22, 2016. Available at: http://www.guestmetrics.com/blog/2016/1/22/january-2016-industry-report
  • Halstead, L. (2016). Industry of Tomorrow. Presentation at Unified Wine & Grape Symposium. Jan. 28, 2016. Sacramento, CA.
  • McMillan, R. (2016). 2016 SVB Wine Report. Silicon Valley Bank. Available at: http://www.svb.com/wine-report/
  • Nieslon Spectra (2015). The US Wine Consumer Report.
  • Quackenbush, J. (2016).  Wine sales growth slows to 2% as consumers upscale.  North Bay Business Journal. Available at: http://www.northbaybusinessjournal.com/northbay/sonomacounty/5139096-181/wine-sales-growth-slows-2015?gallery=5146124#page=2
  • Shanken Daily News. (2016). Wine Market Council Finds Generational and Involvement “Gaps” Increasingly Pivotal To Industry. Shanken Daily News. Jan. 27, 2016
  • ShipCompliant (2016). 2016 Direct to Consumer Report.
  • Wine Institute (2016). California Wine Exports Set Record in 2015: Worldwide Demand Grows, Despite Strong Dollar. Wine Institute Website. Feb. 25, 2016. Available at: http://www.wineinstitute.org/resources/pressroom/02252016
  • Wine Market Council (2015).  Research. Available at: http://winemarketcouncil.com/research/

Photo Credits: L. Thach

Highlights of American Wine Consumer Survey

Shopping for Wine

The US is the world’s largest wine market, achieving $37.6 billion in wine sales in 2014. But what wine styles does the American consumer prefer; where do they like to buy wine, and why do they drink it? These are just a few of the questions explored in the annual American Wine Consumer Preference Survey launched by Sonoma State University (SSU) and the Wine Business Institute.

Highlights of the 2015 survey results are shared here in a Powerpoint presentation developed by the researchers.  It is intended to be shared with others to provide basic information and statistics for the wine industry.

The American Wine Consumer Survey Results from SSU Wine Business Research

(Photo credit: fotolia-06photo.jpg)

Trends in the US Wine Industry for 2015 – Surging Forward with Renewed Optimism ($37.6 billion in 2014 revenues)

DSCF0893Even though wine consumption in the US has increased every year since 2000, some of those years were a bit bumpy due to the recession and a tendency for consumers to purchase value-priced wines. Now in 2015, the trend of buying more premium-priced wines has resurfaced, and there is a renewed optimism in the US, spurred on by the strengthening dollar and a more buoyant economy.

A review of the 2014 wine statistics and buying trends for 2015 are primarily positive. The only gray cloud on the US wine horizon may the growing popularity of craft beer and spirits. However if the wine industry continues to innovate and assists in promoting a larger market share for all adult beverages, then the positive growth trend can continue.

Sources for this posting are primarily from speakers at the 2015 Unified Wine Symposium as well as recent reports. See references at end for details.

Statistics for the US Wine Industry in 2014

  • Revenues for US Wine Sales = $37.6 billion (Wine Institute, 5/19/15); 1% increase from 2013
  • Total  cases shipped: 375 million (Frederickson,2015)
  • Percentage Imports = 31% (down from 34% in 2013; mainly from bulk)
  • Percentage from California = 60% ($24.6 billion in revenues, up 6.7% from 2013)
  • Percentage from Other States = 9%
  • US is the largest wine consuming nation since 2010 (Wine Institute, 2015)
  • 2014 is the 22nd consecutive year of grown for US wine sales

US Wineries & Consumption Rates

  • Number of US Wineries in 2014: 8287 (Gordon, 2015)
  • 5 Largest Wine Producing States: 1- California, 2- Washington, 3- Oregon, 4- New York, and 5- Virginia
  • Wine Consumption in the USUS Wine Consumption per Capita: 3.14 gallons (11.9 liters) in 2014 (Wine Market Council, 2015)
  • Percentage of US Adults who drink wine: 40%
  • Consumption Frequency: 33% drink wine several times per week and 67% drink wine occasionally

Channel Growth & Competition in 2014 

  • Off-Premise – more than 80% of wine in the US is still sold off-premise, with double digit growth in the $12-15; $15-20; $20 – 30; and over $30 categories (Brager, 2015). Still 75% of wine sold was under $9 per bottle (Frederickson, 2015)
  • Direct to Consumer Shipping (DTC/Ecommerce) – 3.95 million cases shipped at $1.82 billion in sales, a 15.5% increase from 2013 (ShipCompliant, 2015). Average bottle price $38. Wineries can now ship to 90% of US states.
  • On Premise Sales – slight increase in 2014 over previous years with wine value up 1.3%, but volume down 1.1% (Guest Metrics, Nov. 2014)
  • Competition – number of craft breweries and craft spirits have increased more than 50% since 2008 (Frederickson, 2015), creating intense competition for wine

Hot Wine Trends Now and for 2015

  • Trading Up – wine sales have increased in the $12 – 30 range and are expected to continue with the strong dollar, lower oil prices, and desire for more premium products
  • Sparkling wine is “hot” – up 7% in 2014, and will continue to grow, especially Prosecco. There is opportunity for new brands in the sparkling market.
  • Red Blends are still very popular, with brands like Apothic and Menage a Trois Red performing well. Opportunity for higher-priced red blends.
  • Most popular varietals will continue to grow: Cabernet Sauvignon, Chardonnay, Pinot Grigio, Pinot Noir and Sauvignon Blanc from New Zealand
  • 428047_4187596921499_1003172458_n (1)Oregon & Washington coming on strong, with more interest in wine from these states
  • Rose over $12 performed well this past year, and is expected to continue into 2015
  • “Eco” Wines slowly gaining more attention with 16% of US wine consumers now looking for these labels. Potential increases for sustainable, organic, and biodynamic wine as consumers grow more concerned about environmental issues.
  • Tetra Pak and 3 L Boxes selling well with continued growth in this area.
  • Wine Kegs in restaurants selling both value-priced and premium wine by the glass are gaining positive attention from consumers, with expected growth here.
  • Wine Apps are growing in popularity with up to 36% of US consumers using them to check prices and reviews before purchase
  • Wine Cocktails are stirring positive reactions with Millennials (Franson, 2015). This could be an opportunity to create a new trend of “wine mixology.”

References 

Profile of the US Wine Consumer in 2014

(Originally published in Wine Business Monthly as “Snapshot of the American Wine Consumer” in 2014 by Liz Thach, Janeen Olsen & Tom Atkin)

Wine with FlagWho is the American wine consumer today? What types of wine do they prefer and where do they purchase their wine? How much do they spend on a bottle of wine in a restaurant? These and other questions are addressed in a new annual survey that researchers at Sonoma State University Wine Business Institute have recently designed.

About the Sample

The online survey was launched in early 2014 with a total of 1028 wine consumers responding to the questions. The data was gathered by a third party market research firm supplying panel data of household wine consumers in America. All fifty states were represented, with more consumers responding from states with higher wine consumption rates. For example, 12 % of the sample were from California, 9% from Florida, 7% from New York and Illinois, and 6% from Texas.

Demographics showed 49% male and 51% female respondents; 59% had a college degree; and 61% made over $50,000 per year. In terms of age, 36% were Millennials (21 – 36), 22% Gen Xers (37 – 48), 34% were Baby Boomers (49 – 67) and 8% were Traditionalists (68 +). The ethnic breakdown of the sample was 72% Caucasian, 12% African-American, 8% Hispanic, 5% Asian with the remaining 3% Mixed or other. These demographics are very similar to other research portraying the American wine consumer.

Wine Consumption Frequency and Preferred Varietals

When asked how often they consume wine, 20% of the sample reported drinking wine on a daily basis, 48% several times a week, 18% once a week and the remainder were occasional drinkers at 14%. Respondents were given a list of the 12 most popular varietals in the US, according to Nielsen scan data and asked to select their favorites. Results were slightly different than current scan data with 55% selecting Merlot as a top favorite, followed by Chardonnay at 52%, Cabernet Sauvignon at 45% and Pinot Grigio at 44%.

Average Price Spent on Wine

When buying a bottle of wine to drink at home, the most common price point was $10 – $15 per bottle with 35% of the sample, whereas 22% spend $8 – 10, 16% spend $15 – 20, and the remainder spent either less or more. When dining at a restaurant, the most common price was $20 – 30 per bottle at 27% of the sample, 17% spending $30 – $40, 12% spending over $40, and the remainder spending less or more. Interestingly, 21% of the sample reported only buying wine by the glass at restaurants. The most common price point for this was $5 – 10 per glass at 61% of the sample.

Preferred Location to Purchase Wine

Since this was a national sample, and wine is not sold in grocery stores in every state, it was not surprising to see that the most common location to purchase wine was in a Wine or Liquor Store. Participants were asked to rate how often they purchase wine at these locations with possible responses of Never (0), Rarely (1), Sometimes (2), Often (3), and Almost Always (4). In this study, 25% of the respondents said they purchase wine in a Wine/Liquor store almost always, which caused the overall rating to be 3. 6, whereas only 17% said they almost always purchase wine in a Grocery Store, resulting in an overall rating in that category of 3.21. Online wine sales is still quite small with only 4% of the sample reporting they almost always purchase wine Online.

Decision-Making Cues to Buy Wine

In addition to using Price and Varietal as decision-making cues when buying wine, 74% of the sample reported that wine Brand was very important, followed by Country at 52%, then Region at 44%. The way the Label looked was important to 38% of the respondents. Least important was Appellation at 12%.

Organic, Sustainable and Biodynamic Wines

Though the Organic Trade Association reports that 41% of American consumers are now buying organic food, this number is not as high with organic beverages. That could explain why only 16% of this sample said they look for organic wine as part of their decision-making process. Listing “sustainable” on the label only was important to 10% and “biodynamic” to 6%. Other research indicates that many Americans assume that most wine is organic anyway and therefore don’t look for these cues, and some consumers confuse the term “biodynamic” with “genetically modified,” which can be a deterrent to purchase.

Social Media and Wine Apps

Social media is being adopted in large numbers by American wine consumers with 80% of the sample reporting they use Facebook, 41% Youtube, 39% Twitter, 28% Linked-In, 25% Google+, 24% Pinterest, and 20% Instagram. Only 9% of the sample said they don’t use social media. Of those that do, 13% reported they frequently use social media to get information about wine, look up wine pricing, and ask friends for wine recommendations. An amazing 76% of the sample own a smart phone with around 24% using wine apps.

Table 1: Use of Smart Phone & Wine Apps

Have a smart phone 76%
Use smart phone to check prices on wine 36%
Have wine apps on smart phone 24%
Use apps to get coupons on wine 24%
Use wine apps to decide which wine to buy 23%

Wine Tourism

Wine Tourism Word Cloud

Wine Tourism Word Cloud

Reports about wine tourism growing appear to be true, according to this sample. When asked if they had visited wineries in other regions to taste wine, 67% of the sample responded positively. They were then asked to type in the names of some of the regions they had visited for wine tourism, which resulted in the “word cloud” picture below. This diagram illustrates the 27 most important words listed, with the larger and darker the font reflecting a higher number of responses. The statistical analysis confirms that in the US, Napa was typed into the data box slightly more times than California, followed by Sonoma (misspelled a few times), New York and Oregon. Outside the US, France was documented slightly more than Italy.

Ongoing Research on Wine Consumers – Additional Questions?

This article reports on the highlights of the American Wine Consumer Survey for 2014. Additional research questions were included on other wine business topics and will be analyzed and published in the future. Researchers at the Sonoma State University Wine Business Institute have received grant money to conduct this American Wine Consumer study on an annual basis. If you have suggestions on additional questions or topics to include, please do not hesitate to contact the authors.

Trends in the US Wine Industry in 2013 – Cautiously Optimistic

Liz Thach2Each year in January we are blessed with multiple reports on the state of the wine industry from such esteemed research bodies as Shanken’s Impact Databank, the Wine Marketing Council, Nielson, Silicon Valley Bank, and Unified.  This year the news is similar to 2012 in that most experts are cautiously optimistic of numbers and trends that continue to skew positive but without any large changes.  In general, the economy is better, but people are still cautious.

Wine Sales in the US

  • For the 19th year in a row wine sales have continued to grow in the US market, at a rate of 2.9% in 2012
  • The US is the largest wine consuming nation in the world with more than 100 million people now drinking wine, out of a total population of 316 million.
  • Per capita wine consumption in the US hit 3.08 gallons in 2012.
  • The US is  the world’s largest wine market in terms of revenue, with consumers buying more than 360 million cases of wine in 2012, up 2% from 2011.
  • In 2012 total wine sales in the US reached $34.6 billion, a 6% increase
    from 2011.
  • The US still imports almost 30% of all wine sold in the country.
  • Growth in on-premise wine sales is flat, but retail wine numbers are strong at $13.3 billion in 2012 (Nielson)
  • Online wine sales are finally coming into their own, with 74% of consumers purchasing wine from winery websites and 68% from Wine.com.  Wine e-commerce has grown 15% overall since 2011.
  • More wine is being sold in drug stores and other chains such as Walgreens and Dollar General.

US Wine Consumer Characteristics

  • Of all US wine consumers, 57% are now core (those who drink wine at least once a week or more often) and 43% are marginal (drink wine less often than once a week, but at least once a quarter).
  • In terms of gender, 55% of American wine consumers are women and 45% are men, with more men adopting wine over the last decade
  • People are drinking wine more often in different occasions and settings.
  • 80% of people talk about wine on Facebook and 40% chat about wine on Twitter.
  • Babyboomers are still spending the most on wine, but Millennials (ages 21 to 36) continue to adopt wine in high numbers with more than 15,000 per day coming of age.
  • The Hispanic population is growing very fast in the US with a forecasted population increase from 16% today to 30% by 2050.  There is a concern that wine is not doing enough to embrace this population, while beer and spirits are.

Trends in Wine

  • The hottest varietals are still moscato, malbec and sweet red blends.  Some producers are now experimenting with sweet white blends.
  • Chardonnay is still the most widely purchased wine varietal with cabernet sauvignon as second.  American consumers also still enjoy pinot grigio, sauvignon blanc and rose, but there have been further decreases in syrah and white zinfandel sales.
  • Hot new packaging trends include wine in 187ml bottles (16% increase) and tetra packs (27%  increase).  Pouches are also gaining traction.
  • Americans still enjoy buying wine from Argentina, New Zealand and Spain, but wine purchases have declined from Australia and Germany.
  • The sweet spot for wine pricing is $10 – $14.99.
  • Some wineries have suggested they need to raise prices due to a global grape shortage situation, but retailers are concerned that consumers are not yet ready for price increases.
  • Beer is growing faster than wine, with many consumers intrigued by beer’s new flavors, cider, malts, and artisan brews.  There is concern that wine needs to do something new, e.g. new varietals, new packaging, etc.

Statistics on the US Wine Industry – 2011

428047_4187596921499_1003172458_n (1)As the 4th largest wine producing country in the world, the US wine industry has steadily increased in size and revenue over the past decade.  In 2010 the US became the leading wine consuming nation at 330 million cases (Wine Institute, 2011).  This equates to Americans drinking 3.96 billion bottles of wine in comparison to France’s record of 3.85 billion bottles (Press Democrat, 2011).  According to the Impact Databank Report, Americans spent more than $40 billion on wine in 2010, and wine consumption recorded its 17th annual increase in the US.  California, the largest wine producing state in the nation, currently accounts for 61% volume share of the US market (Wine Institute, 2011).

Wine Production in the US

Wine is produced in all fifty US states.  According to Wine Business Monthly (2012), the total number of wineries in the US reached 7,116 in 2011 showing a 9% increase from the previous year.  Of these, 6,027 are bonded wineries with a physical location, whereas the other 1,089 are virtual wineries.   California is the largest wine producing state with a current count of 3,458 wineries.  The next largest wine producing states are Washington, Oregon, New York, Virginia and Texas, respectively.

According to the US International Trade Association (2011), in 2010 grape production in the US was 6.86 million tons with 944,800 bearing acres.  The top 5 wine grape varieties grown in the US are Chardonnay, Cabernet Sauvignon, Zinfandel, Merlot, and Pinot Noir.  The highest price per ton of wine grapes in the US is Napa County with an average of $3,389 per ton paid in 2011(USDA, 2012).

Wine Consumers in the US

Of the more than 313,000 million inhabitants in the US, approximately 35% drink wine at a per capita rate of 3.03 gallons or 11.5 liters (Wine Market Council, 2012).  In terms of demographics (SVB, 2012), 69% are white, 14% Hispanic, and 11% African American, with the remainder 9% from other races.  The average age of the American wine consumer is 49, with Millennials, or those who fall between the ages of 21 and 34 making up 26% of wine consumers,  ages 35-44 at 19%, ages 45 to 54 at 21%, and those over 55 at 34%.  College degrees are held by 24% of American wine consumers.  Consumption rates are growing amongst Millennials and men.

Preferred varietals of Americans in terms of sales are chardonnay, which holds first place in the US, at 21% market share and cabernet sauvignon in second place at 15% (Nielsen, 2012).  Though sales are decreasing, merlot still holds third place, with pinot gris and pinot noir as fourth and fifth favorites, respectively.  Fastest growing categories are Moscato, Malbec, Riesling and sweet red blends.  The most popular price point in 2011 was the $9 – $11.99 category.  Some of the best selling brands include Sutter Home Moscato, Cupcake Chardonnay, Barefoot Pinot Grigio, Gnarly Head Zinfandel, Menage a Trois Red, and Gallo’s Apothic Red.

Americans also enjoy drinking imported wine, with 1 out of every 4 bottles sold from a foreign country.  In 2010, the top imported wines countries were (ITA, 2011):  Italy (30%), France (24%), Australia (14%), Chile (7%), Argentina (6%), and Spain (6%).  These accounted for 87% of the total value of imported US wines.

Future Prospects

In general, the future prospects for continued wine growth in the US market are positive.  American consumers are adopting wine at a strong level with 17 years of continued growth (Wine Spectator, 2011) and prospects for this trend to continue.  On the negative side, the US wine industry has experienced two years of poor weather resulting in lower crop loads.  This indicates a looming shortage in US wine supply, which will require supplements from foreign sources