Wine Industry Faces Ongoing Slump Amid Uncertain Recovery Timeline and Shifting Consumer Habits

The wine industry is facing a period of uncertainty as it tries to determine when sales might recover from a prolonged slump. Jon Moramarco, editor of the Gomberg Fredrickson Report, presented second-quarter findings in a webinar on September 23. He described the current situation as “murky,” with incomplete and sometimes inaccurate reporting from both wholesalers and consumers making it difficult to assess the true state of the market.

Moramarco explained that while there are signs the industry may have reached its lowest point, he cannot say for certain. Table wine sales and lower-priced wines continue to decline, and he suggested that if the industry has hit bottom, shipments could remain flat for the next five years. Over the past year, total wine shipments have shown some improvement, with increases in sparkling and flavored wine products helping to offset larger declines in table wines. Wine entering the U.S. from bonded warehouses is now flat or up slightly by just over 1%.

In comparison, the beer market has dropped by 5% over the same period. Mexican beer imports provided a temporary boost but have also started to soften. Moramarco noted that Constellation Brands, which owns popular Mexican lagers like Pacifico and Modelo, views these changes as cyclical rather than structural.

Spirits continue to lead in both sales value and volume, driven by growth in tequila and spirits-based ready-to-drink products. Despite challenges across all beverage alcohol categories, consumer spending remains strong in both on-premise (bars and restaurants) and off-premise (retail) channels.

Moramarco’s data comes from bw166, a firm he founded that tracks domestic and imported tax-paid volumes. He believes this method offers one of the most comprehensive views of an increasingly fragmented beverage alcohol market. “I have yet to find anyone who overpays their taxes, so I think it gives the most accurate data,” he said.

However, Moramarco cautioned against relying on any single data source. He advised industry professionals to interpret data within the broader market context and to be aware of what is not fully captured. Inventory reports, depletion figures, and retail scan data each have their own limitations.

One significant blind spot is private label wine sales. Much of this wine moves through clearinghouse wholesalers, making it difficult to track accurately. Producers are often reluctant to share details about their private label production for competitive reasons.

On the consumer side, there is a persistent gap between reported alcohol consumption and actual consumption. Moramarco noted that from the early 1990s until the pandemic, Americans reported drinking about 15 servings of alcohol per week on average; this has dropped to 13.5 servings in the most recent 12-month period. While reported consumption appears stable, it does not match up with total servings entering the market.

This under-reporting has long been an issue, but recent declines are linked to demographic shifts at both ends of the age spectrum. Baby Boomers are drinking less or stopping altogether as they age—a trend expected to continue with future generations. By the early 2030s, people over 65 will make up nearly 30% of Americans old enough to drink legally.

There is also a notable decline among Gen Z drinkers aged 21 to 25, who now report consuming about five servings per week. Moramarco stressed that it is important for the wine industry to connect with this group now so that wine becomes part of their habits as they get older.

The lack of accurate reporting from both producers and consumers makes it especially hard to predict when sales will rebound or how much wine should be produced to meet demand. Based on current estimates for production and inventory needs, Moramarco said the U.S. will need to crush about 3.2 to 3.3 million tons of grapes each year—down from previous years when around 4 million tons were crushed—to maintain an average inventory of about 17.5 months.

He pointed out that while declines in production have slowed, recent large-scale vineyard removals may have gone too far in reducing inventory levels. The industry will need time to see how these changes play out and whether supply can be balanced with demand going forward.