U.S. wine consumers are  buying less and paying less.  That's the conclusion of a Wine Market Council study investigating why this is happening and where they are going.

“In the past several months, we have seen $20+ wine consumers trading down to the $10 to $19.99 category, and $10-19.99 consumers trading down to wine that is priced less than $10,” stated Jon Berg, Thought Leadership VP at NielsenIQ.

Curtis Mann, MW, with Safeway/Albertson’s agrees. “We have just started noticing this trend in the past few months,” he said. “But we believe that $15 - $19.99 is the sweet spot in our stores. Now is not a good time to take large price increases in off-premise.”

The consumers who are dropping out of regular (6+ times a year) wine purchasing skewed towards ages 35 to 44, with an income level of $40,000 to $70,000.  This level of churn is not as noticeable in other age and income groups. For example, purchasing of wine in general, and $20+ wine in particular, continued to index high among older households with high incomes.

Where Are They Going?

So where are consumers going who are cutting back on wine purchases? In 2022-23, part of the decline resulted from wine consumers reducing purchases for home across most beverage alcohol categories. Some table wine losses traced to switching to other categories, led by craft beer and ready to drink (RTD) spirits.  Sparkling wine also took some business from table wine, along with imported beer.  On the other hand, many consumers are abandoning the hard seltzer category, with above $10 being one of the beneficiaries.

“We think what happened to hard seltzers is that consumers learned they were primarily malt-based and not spirits based,” reported Jon Berg. “Therefore, they switched to RTD spirits and wine, because they believed there was more transparency there.”

The desire for authenticity and transparency in alcohol beverages was a theme that was also identified by Curtis Mann, MW.  “Increasingly we see consumers who are interested in knowing more about the products they are consuming,” he said. “This is especially the case with younger consumers who are interested in authenticity, transparency and sustainable/organic products.”

Need for More Innovation in the Wine Industry

All the speakers provided some key takeaways and action items that the wine industry should consider.  In addition to the need for increased authenticity and transparency (let consumers know the calories of your wine, ingredients, sustainable farming methods, etc.), the need for innovation also was mentioned.

“Consumers are switching alcohol and beverage categories faster than ever now,” stated Curtis Mann. “It is important for wine brands to be innovative – to try to do something different to stand out.”

Jon Berg added, “And be nimble enough to change direction.”

Future Wine Market Council Research Studies

Phase 2 of this Category Shifting Study, will be an extensive survey of over 1000 wine consumers, designed to reveal on what occasions consumers are most likely to cut back wine drinking, what they are switching to and why. As with the first phase, members will have access to the complete report and data, along with a webinar on the findings. The report is expected to be complete in October 2023.

In addition, a new 2023-2024 Benchmark Segmentation Study will launch this month.  This survey is conducted every two years on U.S. wine consumer buying habits, attitudes and trends with around 4500 consumers. Another ongoing research study this year is on High-End Wine Consumers who spend regularly $20 or more for a bottle of wine. This new survey examines their attitudes, behaviors and motivations, and is especially great research for WMC members who sell wine DTC and at higher price points.