A new report by Bank of Montreal (BMO) shows that, though wine volume sales are down, actual dollar sales from consumer expenditures on wine have increased in 2023. In fact, if analyzing the BMO report data from 2018 through 2023, wine sales in the U.S. (both domestic and imported wines) increased by 46%. Though part of this is due to inflation and necessary price increases that wineries had to take to keep up with rising supply and labor costs, a good portion is also due to consumers spending more on wine.
“Though the volume of wine shipments were down in 2023, the actual dollar sales of all wine sold in the U.S. market was up over previous years—to $107 billion,” stated Adam Beak, Managing Director and Head of the Wine & Spirits Vertical of BMO, the firm that spearheaded the report.
Other key findings were that wines priced more than $10 per 750ml bottle have remained stable and are expected to grow. Indeed, nearly 30% of consumers report they purchase wine priced at $20 or more on a monthly basis, or more often.
About the BMO Wine Market Report
Titled the 2024 BMO Wine Market Report, it is the first of its kind to capture 100% of wine sold in the U.S. market. Extensive data from the Bureau of Economic Analysis (BEA), the Tax & Trade Bureau (TTB) and other reputable sources were included in the final analysis. BMO plans to publish the report on an annual basis as a complimentary service to the industry.
The 34-page report includes not only market/sales data, but consumer trends, and winery insights. It was compiled and written by four authors: 1) Adam Beak of BMO; 2) Andrew Adams with Wine Business Analytics, 3) Jon Moramarco of bw166 and Gomberg-Fredrikson, and 4) Christian Miller with Wine Market Council and Full-Glass Consulting. I was able to interview the authors via phone and email.
“We wanted to do a fact-based report that captured all of the market, because not all data sources do,” explained Jon Moramarco. “We hope it gives a clear and concise view of what’s going on. Obviously the industry has work to do, but this report shows that the sky is not falling.”
Part of the challenge with reporting wine data is because it is sold through multiple channels that have different methods of tracking data. Therefore, some data firms focus on wine sales in off-premise establishments (grocery stores, wineshops, etc.); others focus on restaurants and bars (on-premise); but there is also imported bulk wine, winery direct sales, and online sales that are tracked through different sources.
Young Consumers Embracing Wine
The wine consumer behavior section of the report utilized several years of Wine Market Council consumer survey data, and was completed by Christian Miller. He found that wine drinkers comprise 35% of the U.S. adult population, and total consumption per capita has remained largely stable since the mid ‘90s.
One of the fascinating aspects of the study shows that 61% of U.S. wine drinkers fall into Gen Z, millennial and Gen X segments, and that baby boomers (aged 59+) are the ones who are starting to drink less alcohol. However, Miller’s longitudinal analysis shows that, in general, there are more similarities than differences between generations.
“For example, in their 20s, the proportions of Gen Xers, Millennials and Gen Z who drink wine have been fairly close,” Miller stated. At the same time, he suggests being “cautious about stereotyping behavior by generation,” because there are other factors, such as life stage, income, education, and social background that influence wine adoption.
Indeed, the report shows that wine drinkers are more affluent, with 53% earning $100,000+ per year compared to 34% for non-wine drinkers. Furthermore, 52% of wine drinkers have a college degree and 71% own a home.
55% of U.S. Wineries Met or Exceeded Sales Goals in 2023
The winery insight portion of the report highlights a survey of 630 wineries from the total database of 11,000. This was completed by Andrew Adams of Wine Business Analytics, who insured that the sample was representative across U.S. states, winery size, and price point.
Though some wineries, especially those selling at lower price points in retail establishments, did not report positive sales numbers in the last few years, 55% of U.S. wineries reported they had achieved or exceeded their sales goals in 2023.
Furthermore, more than 70% of the sample said they expected increased sales growth in the future. The report highlighted areas of growth in the market to be the development of new brands, wine cocktails (wine RTDs), affordable by the glass options, new packaging formats, and expanded direct-to-consumer sales at the winery and online.
Fact-Based Data on the Total U.S. Wine Market
Though the report authors acknowledge that there are headwinds, and that the lower end of the market is likely to remain flat or decline, the U.S. wine industry is stronger than was assumed in 2024.
“I was surprised by some of the positive news in the report, because we all get sucked into the negative headlines of late,” stated Adam Beak of BMO.
“We need to fight back with real fact-based data, because the negativity could become a self-fulfilling prophecy. That’s not to say there aren’t problems, and that some businesses will have a hard time, but, the news isn’t all negative. Many wineries are expecting good growth in future years,” he continued.
Beak concluded by saying that, “we hope wine businesses can use the data in the report to guide them and make better decisions. Wine is an 8,000 year old industry, and it isn’t going away, but it is evolving. And, as wine businesses, we need to evolve with it.”
NOTE: Portions of this article were published in Forbes.com. Republished here with permission.