Is Wine Out of Style?

The wine industry is grappling with how to appeal to Generation Z, as current data suggests that this demographic is not embracing wine as expected. Wine sales are stagnant, and the industry is anxious about the future, fearing that Gen Z might prefer other beverages like hard seltzer over traditional wines. As a result, there has been a surge in strategies aimed at attracting this younger audience, many of which have been misguided. The media has suggested various tactics, from promoting wine in cans to creating mixed drinks with flavored fortified wines. However, these efforts have yet to yield significant results.

Natural wines, which have received considerable attention in the food media, are often positioned as the go-to option for younger consumers. Despite this, sales figures show that these wines currently account for only a small fraction of the market. The fixation on niche products, such as natural, zero-zero wines made from hybrid grapes, reflects more of a media trend than a real shift in consumer behavior. A recent Wine Market Council (WMC) study following 54 Gen Z consumers during their wine purchases revealed that these wines have little traction among this group.

Generational shifts in alcohol consumption are not new. In the past, the industry expressed similar concerns about millennials. But over time, millennials have become a key segment of the wine market, now consuming more wine than Generation X. Many younger consumers simply haven't developed a preference for wine yet, but their tastes could change as they age. A 23-year-old in the WMC study mentioned that, in their early drinking years, they preferred sweet wines and found dry wines unappealing, but now favor dry wines. This progression is a natural part of developing a palate, and Gen Z may follow the same trajectory as they mature.

There are specific demographic challenges the industry needs to address. For example, the Hispanic population, which is projected to make up 30 percent of the U.S. population by 2050, has not adopted wine at the same rate as other groups. This underscores the need for targeted outreach and marketing strategies, such as more Spanish-language campaigns. Still, for other groups, the situation may not be as dire as some suggest. Large beverage companies are adapting their product lines, with Gallo successfully entering the canned cocktail market and Constellation Brands expanding into Mexican beer.

Smaller wineries may be tempted to follow these trends, but this could be risky. The better strategy is to focus on making quality wine at a reasonable price. As seen with the resurgence of Bourbon, which was once thought to be a dying category, consumers eventually gravitate towards quality products. Similarly, traditional wineries should stay true to their strengths and avoid getting caught up in fleeting trends, like producing fruit-flavored wines or embracing overly experimental varieties.

Wine's role as a beverage is evolving alongside changing dining habits. An increasing preference for white wine over red is emerging, which might be linked to dietary changes favoring lighter, more plant-based meals. Climate change also plays a role, making chilled wines more appealing during warmer evenings. Despite these shifts, wine in the U.S. is often consumed outside of meals, such as during book clubs or social gatherings, where the focus is more on the experience than pairing with food. This trend may impact the type of wine people prefer, with more casual, easy-drinking styles becoming popular.

Meanwhile, suggestions that canned wine will dominate the market due to its portability are questionable. While some argue that traditional bottles are impractical for activities like hiking, a better solution could be producing more 375 ml bottles with screwcaps. Wine tastes better from glass than metal, and the assumption that people will continue to prefer canned wine as they age is likely flawed. Over time, many will return to bottled wine as their tastes mature.

The reality is that the wine industry is facing a period of contraction. Some wineries and vineyards will not survive the next decade. Those that do will likely succeed not by chasing trends like coferments or canned products, but by staying focused on producing good wine that offers value to consumers.