US Wine Sales Dip 6% Despite Earlier Optimism

Wine sales in the United States continue to decline, according to the latest report from the Wine & Spirits Wholesalers of America (WSWA), which shows a 6% drop in distributor sales to over 450,000 retailers in the last 12 months through August 2024. This contrasts with earlier news, such as a survey conducted by BMO Financial in May 2024 among more than 600 wineries, which had raised expectations of a wine demand recovery.

The WSWA analysis suggests that while initial optimism was driven by seasonal factors and stock reorganization, general consumption patterns are now a cause for concern. The most recent data shows that wine stock in stores has dropped by 8%, while spirits stock has fallen by 3.9%. Table wines priced between $8 and $10.99 have been the hardest hit, with a 12.7% decline in both retail and restaurant sales.

Dale Stratton, an analyst at SipSource, indicated that the wine sector is facing challenges. Changing consumer behavior, inflationary pressures, and reduced shelf space allocated to wine are among the reasons cited. This coincides with a growing preference for alternative beverages, such as THC-infused drinks, which generated $2.04 billion in sales last year and could reach $3.09 billion this year. By 2032, this market is projected to reach $117.05 billion, nearly double the projected size of the U.S. wine sector for this year, estimated at $61.2 billion.

In addition, the ready-to-drink (RTD) market is also booming, despite a slowdown in the growth of hard seltzers. This market is expected to grow by 12% between 2022 and 2027, reaching $40 billion by 2027.

Despite these difficulties, some wine categories continue to show resilience. Prosecco has grown more than 2% year over year, and high-end wines priced above $50 per bottle have seen a modest increase of 1% in the last six months, reaching 3% in the domestic market. This suggests that higher-income consumers are still willing to spend, especially with the upcoming holiday season.

However, Danny Brager, another analyst from SipSource, warned that the reduction in product distribution in bars, restaurants, and stores is affecting both wine and spirits, which could limit available options for consumers.

The concept of premiumization, once seen as a key driver for growth in the wine sector, also appears to be under pressure. Figures show that even higher-end wines and spirits are seeing a slowdown in an increasingly competitive market. Spirits in the $100+ range saw the largest decline, with a drop of 12.5%, while mid-range spirits priced between $50 and $99.99 fell by 3.9% in bar and restaurant sales, and 4.3% in retail sales.

This combination of factors suggests that the U.S. wine sector is not only grappling with shifting consumption habits but also facing competition from within the alcoholic beverage market, along with the growth of emerging alternatives.