As far as I know, we are the only alcohol-beverage newsletter to regularly report on economic matters, and we are the only one to have consistently for the past decade warned that the ever-increasing squeeze of middle- and lower-class bev/al consumers would hurt all segments and nearly all tiers of the business.

Tom Wark, executive director of the National Association of Beverage Retailers, says we were right: “There’s no doubt in my mind that the bottom of the market dropped out because the people buying those wines had less disposable income,” Wark said in a Mar. 19 webinar hosted by Sovos ShipCompliant.

With budgets stretched thin amid the cost of living crisis, luxuries, like wine clubs and alcohol in general, were the first on the chopping board. 

After several years of premiumization driving dollar gains, direct-to-consumer (DtC) shipments are now mimicking the K-shaped economy; top spenders continue to purchase higher-priced bottles while entry-level consumers are buying less or exiting the category altogether. 

Since 2021, total shipment value and volume have been flat or declined. Compared to the previous year, shipment value in 2025 fell  6% to $3.7 billion and volume fell 15% to 5.4 million cases; this is the largest one-year drop in value and volume in the 17-year history of the report. California shipments, which represented 62% of the total value decline, suffered the sharpest declines, losing $142 million in shipment value. The average bottle price soared to $56.78, up 11% compared to 2024. 

The least expensive wines suffered the largest loss in volume, but not because consumers are moving up into a higher price tier.

“They’re not buying up; they’re getting out,” Koval said. 

For many years, the $30-and-less category represented half of the DtC shipments, Wark said, but in 2025, the only price tier to show growth was for bottles priced more than $200 a fact that Koral said should give the industry pause.  

Speaking at this year’s Unified Wine & Grape Symposium, market analyst Danny Brager similarly noted that off-premise depletions of wines priced more than $13 performed better than cheaper bottles. Wine Market Council too has found the wine-buying audience for bottles under $20 is rapidly disappearing.

 “We’re not refreshing generations; if the Boomers aren’t being replaced, then that will lead to long-term structural issues,” said Koral.

Consumption is down across all categories, Wark said, but wine tends to decline at a greater rate due to the higher average price per alcohol unit. “Wine is not only perceived as being more expensive, it actually is more expensive.”

As a result, consumers are either reducing their wine consumption or moving into other categories that offer a lower price-per-serving. 

The economy is “out of our hands,” Wark said, and unfortunately, a turnaround in consumer demand for luxury goods like alcohol is dependent on economic conditions improving. 

All things considered, Koral said wine shipments are still broadly stable, bringing in three times as much in sales value as it did in 2010, but it’s a matter of creating stability and potential growth in the coming years. 

Wark and Koral emphasized the importance of driving people back to tasting rooms and improving wine tourism, which has taken a hit in recent years. Despite pullbacks on spending, consumers still say they are eager to travel, according to a AAA survey, and are planning to increase their travel in 2026. Wineries can lean on each other as well as regional and trade associations to boost tourism, which is the first step in introducing consumers into the sales circle. Creating a comfortable retreat-like atmosphere is also key, Wark said; customers will speak highly of the winery to friends and want to visit time and time again.

Unfortunately, many of the tactics previously used to entice customers, particularly discounted shipping, are harder for wineries to swallow nowadays as the cost of production and inflation create razor thin margins.    

The cost of shipping is just another element that has excluded entry-level drinkers, Wark said. The customers who are already spending $150 per bottle aren’t too bothered by an added shipping cost, but when shipping costs exceed the price of a bottle, that’s where customers abandon their shopping cart. 

Economic conditions will need to improve and give consumers more flexibility and confidence in their spending before the wine industry sees a significant turnaround, but until then, Wark said the only way forward is to endure and be creative. 

“We’re throwing stuff against the wall and hoping it sticks,” he said. “We gotta keep throwing.”