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Industry News

Don’t count the wine industry as “dead” just yet. Here are 4 reasons for optimism

By  Andrea Smalling
February 1, 2023

Over the past several weeks, we’ve read with great interest some very alarmist headlines. A few recent examples: “The Wine Industry is in a Tailspin,” “The American Wine Industry has an Old People Problem” and “The Wine Industry is Headed for Self-Inflicted Decrepitude” (which featured some very unsettling zombie pictures to reinforce the point). 

Here at WineDirect, we are currently culling through data for the Annual DTC Report that we produce with Enolytics. It’s based on over 15 million DTC transactions and we’re always excited to dig into the data as it gives a complete overview of all channels of winery DTC Sales. While working on this years’ report, we’ve uncovered some specific data that suggests that the rumors of the wine industry’s death are greatly exaggerated. Here are some signs of life: 

  1. DTC sales of wine continue to grow. Our data continues to show positive growth through 2022, with total DTC sales up 7.5% versus 2021. There are some concerning trends which emerged through the second half of the year which we will cover in our report, but overall, we see continued solid growth.  
  1. Younger consumers are buying wine in tasting rooms. Many of the recent headlines have sounded the alarm regarding the lack of younger people drinking wine. The data sourced in these articles suggests that the only growth in wine consumption is among those aged 60+. While that age group does contribute to a lot of the industry’s consumption, particularly at the higher price points, we need to point out that this data is only referencing DTC shipments - only those wines that were purchased and shipped directly from a winery. It’s missing a key channel, which is wines purchased through tasting room point of sale (POS), which according to WineDirect data, represented 37% of DTC Sales in 2022. Gen Z, Millennials and Gen X clearly skew higher than the older generations in this area.  

  

  1. The tasting room channel captured half of all wine sold under $30, which is the price point most likely to appeal to younger consumers with less disposable income. 

  

  1. The percentage of cases of wine sold to Gen Z, Millennials and Gen X has increased over the past four years, while Boomers and Silent Generation have decreased. (Note, Gen Z consumers are currently aged 11 – 26, so many are not of legal drinking age). 

While it’s true that the wine industry continues to be challenged when appealing to younger consumers, I want to balance out the narrative a little. I came into the industry in 1994 when I was 26 years old, to work on a project that was meant to drive consumption among younger consumers. I was hired because I was a trained marketer who represented the target well. At the time, I had only a passing interest in wine. My drink of choice was a wine cooler, and when I wanted to be very fancy, I splurged on some White Zinfandel. As I’ve aged, my tastes have changed significantly. 

I am not suggesting we should just sit back as an industry and wait. The world has changed, and as a wine industry we are faced with new challenges that make it even more important to meet consumers where they are. Not only do we have to improve on how we appeal to younger consumers, but it’s not just about age. As an industry, we also need to engage with a much more diverse population who will actively refuse to support an industry where they don’t feel represented or appreciated. We have work to do. We are, however, an industry full of innovation and passion. I see what we’ve come through over the past three years and I am optimistic that we are up to the challenge of what’s to come. 

Looking for some resources on how to expand your sales with younger generations? Start here: 

Get the Q3 2022 Wine DTC Report

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