Wine is not tea—there are no leaves at the bottom of a glass that can predict the future. But it is possible to look at how wine sales have changed in the past decade and at what America's youngest wine drinkers are buying in an attempt to forecast what's next. Here's what the sediment says.
American wine drinkers will have an outsized influence on the global wine industry in years to come. The United States is the most important market for wine today and in the foreseeable future. After passing the French and Italians for largest total wine consumption in 2011, according to Impact Databank, Americans consumed 324 million cases of wine in 2012. That's a 7.7 percent increase over five years ago. And that number is only expected to grow in the next five years. What's more, 2012 is the first year America was home to 100 million wine drinkers, according to a Wine Market Council (WMC) study. "One hundred million wine drinkers cannot be ignored," said WMC president John Gillespie, at a presentation of the findings in January.
While Baby Boomers and Generation Xers make up the majority of today's wine consumers, the large Millennial generation (ages 21 to 34) will shape wine's future. So what impact are they already having?
One obvious change is the end of a two-color palette, as dry rosé has shifted from a minor player to frequent year-round quaff. Another is the phenomenal growth of sparkling wine, which is no longer being served only on special occasions. The third significant development is that this young generation is buying more imported wine.
Are Americans reliving the '80s? Pink wine is in and Italian sparklers like Prosecco, Moscato and even Lambrusco are seeing strong sales. Sparkling wine consumption has increased 14 percent from 2007 to 2012, according to Impact, a sister publication of Wine Spectator, and currently sits at 15.5 million cases a year. But while the craze in the '80s centered on low-priced bubbly, today there's growth at multiple price points: while spumante Moscato off-premise sales (retail sales, as opposed to restaurants and bars) grew 65.6 percent in 2012 and Prosecco sales rose 35.4 percent, according to a Nielsen report, high-end Champagne imports have surged again too.
Of those bubbly buyers, 25- to 34-year-olds accounted for 21 percent of American sparkling drinkers in 2011, tied for largest demographic segment, according to Impact. "Sparkling is a market for tomorrow," said Robert Beynat, CEO of Vinexpo, which commissions a look at global trends by International Wine and Spirit Research (IWSR) every two years. It's also a gender-driven category: 64 percent of bubbly drinkers were female in 2011. Women now make up more than half of America's core wine drinkers, those who drink wine at least once a week. "In all countries, women will play a big role [in the future]," Beynat predicted.
The rise of rosé is clearly divergent from the blush rush of the '80s. White Zinfandel sales have been shrinking for years, but premium dry rosé is catching fire, with rosés in the over-$12 category up 33.6 percent off-premise over last year according to the Nielsen report. Provence makes more rosé in this style than any other region in the world, and exports to the U.S. grew 41 percent in 2012 alone, according to the Provence Wine Council.
Young drinkers are also moving away from traditional American regions and toward imported wines. According to Impact, 25- to 34-year-olds represented 24 percent of imported table wine drinkers in 2011, a larger share than any other age group (by comparison, 55- to 64-year-olds were 15 percent of imported wine drinkers). The countries that are reaping the benefits include Italy, with sales growing 12.7 percent between 2007 and 2011 according to the IWSR; Chile, up 14.1 percent; Spain, 16.3 percent; Portugal, 35.5 percent; New Zealand, 44.3 percent; and Argentina,106.6 percent.
While younger drinkers are exploring new options like Portugal more, they're reaching for California less. The WMC found that while 91 percent of Baby Boomers who drink weekly purchased California wine in the past three months, only 77 percent of Millennials had. Conversely, Millennials were more open to wines from emerging states such as Texas, Virginia, Michigan and Missouri than any other age group.
Americans are also experimenting more with grape varieties. The sales growth of domestic red blends, 21.6 percent off-premise last year, suggests willingness to move away from the comfort of easy-to-understand single grape wines. "At tastings, people used to say, 'Oh, Malbec,' but they say, 'Oh, it's a blend,' now," said Cleo Pahlmeyer, whose family flagship is a Napa Valley Bordeaux blend. "I definitely see more interest in blends. People regard them more highly [now]."
Alternative packaging such as boxes, TetraPaks and other environmentally friendly containers are also catching up: Sales of 3-liter boxes were up 10.7 percent last year and TetraPaks were up 27.9 percent.
With consumers increasingly willing to try new things, the wine industry must continue to adapt with them. While beer sales by volume have declined in the past decade and wine sales have grown, Nielsen found that craft beer sales were up 15.5 percent last year. And spirits growth has matched wine growth over the past decade as well. "If you assume that consumer wallets and stomachs aren't expandable, then the battle [for beverage of choice] is quite real," said Nielsen vice president Danny Brager at the WMC conference. While wine sales hold tremendous potential, the future is forever changing.