US Wine Market Forecast: Key Insights

AI Generated
US Wine Market Forecast: Key Insights

US Wine Market Forecast: Key Insights

The U.S. wine market is evolving. While overall wine consumption is declining (-2% CAGR from 2022-2027), premium wines priced above $10 are driving value growth, contributing to a market worth over $107 billion. Direct-to-consumer (DTC) sales are thriving, with average bottle prices increasing by 6% to $48.96 in 2024. Emerging categories like wine-based cocktails and health-focused options (e.g., low-calorie wines) are gaining momentum, appealing to younger, health-conscious consumers.

Key Takeaways:

  • Premium Wines: Wines priced $10+ are growing, while those under $9.49 (62% market share) are declining.
  • DTC Sales: Higher prices offset declining volumes, emphasizing the importance of direct sales channels.
  • Emerging Trends: Wine-based cocktails projected to reach 10M cases in 2024; "better-for-you" wines show double-digit growth.
  • Challenges: Competition from spirits and RTD beverages, plus economic pressures, impact lower-priced wine segments.

To succeed, businesses should focus on premium offerings, strengthen DTC strategies, and cater to health-conscious trends. Tools like B2B Wine Prospects can help industry players connect with key decision-makers and adapt to shifting market dynamics.

The U.S. wine market is experiencing some notable changes. While overall volume has been shrinking for the fourth year in a row (-2% in 2024), the market's value is increasing thanks to a focus on higher-priced wines [1]. This trend reflects the broader industry movement toward premium products.

Wines priced at $10 and above are leading this growth, even as total volume faces a decline [3]. Categories like "better-for-you" options (e.g., low-calorie and de-alcoholized wines) and wine-based cocktails are seeing strong momentum. These cocktails are expected to reach 10 million cases by 2024 [1].

Market Segment Current Performance Future Outlook
Premium Wines ($10+) Positive growth Continued expansion
Standard Wines Volume decline Further challenges
Wine-Based Cocktails Strong growth 10M cases by 2024
Better-For-You Category Double-digit gains Increasing demand

Challenges Impacting the Market

Wine is facing growing competition from spirits and ready-to-drink (RTD) beverages, which are steadily claiming more market share [3]. Economic pressures are also influencing consumer behavior, with many opting to spend more selectively. This particularly impacts standard and lower-priced wine segments, which make up 62% of market volumes but are seeing sharp declines [2]. According to the IWSR, this downward trend is expected to persist, with a projected annual decline of -2% from 2022 to 2027 [2].

Direct-to-consumer (DTC) sales highlight the shift toward premium wines, as higher price points help balance out decreasing volumes. Retail performance in the table wine category further underscores the market's struggles:

Channel Performance Change (52 weeks ending May 19)
Sales Decline -1%
Case Sales -4.1%
Premium Segment Growth Positive

Navigating these challenges will require businesses to align with emerging trends and evolving consumer tastes.

Insights for Wine Industry Professionals

Wines priced in the $15-$49.99 range make up 28% of the market and are seeing growth. On the other hand, wines priced under $9.49, which dominate with 62% of the market, are experiencing a steep decline. The remaining 10%, consisting of wines priced at $50 and above, continues to show steady growth [2].

A standout example is Kendall Jackson's 'Vintner's Reserve' Chardonnay, which saw a 12% increase in sales after adjusting its pricing strategy in early 2022 [3].

As value growth continues to outpace volume, direct-to-consumer (DTC) channels are becoming increasingly important for sustaining profitability.

Growth of Direct-to-Consumer (DTC) Sales

Although DTC sales volumes dropped by 11% in early 2024, the average price per bottle increased by 6%, reaching $48.96. This shift highlights a growing focus on higher-priced offerings [2].

"As Baby Boomers enter retirement with secure income levels, trading up is still prevalent within core wine consumers", says Adam Rogers [2].

Opportunities in Wine-Based Products

Wine-based cocktails and health-focused options are reshaping the U.S. wine market. Brands like Beatbox and Buzzballz are leading the charge in wine-based cocktails, which are on track to hit 10 million cases in 2024, appealing particularly to younger audiences. Meanwhile, the 'better-for-you' category, which includes low-calorie and de-alcoholized wines, is expanding quickly, with double-digit growth [1].

Projections for the Future U.S. Wine Market

Long-Term Market Growth Predictions

The U.S. wine market faces a mixed outlook through 2027. While overall volumes are expected to decline, premium wines priced at $10 and above are showing strong potential for growth. Still wine, which makes up 85% of the market, is projected to see a -3% compound annual growth rate (CAGR) decline in volume, but the premium segment continues to boost overall value [2]. For instance, Josh Cellars is a standout in this space, with 2024 projections exceeding 6 million cases and maintaining double-digit growth rates [1].

Although volume remains a challenge, shifts in consumer preferences are reshaping the market. The premium segment is proving to be resilient, as brands successfully align with evolving market demands.

Shifting Consumer Preferences

Consumer habits are changing fast, influenced by health trends and shifting demographics. The "better-for-you" wine category, which includes low-calorie and alcohol-free options, is expanding rapidly. Brands like Trinchero's Fre and Opici's Giesen 0% are leading the way with alcohol-free innovations.

Between 2021 and 2022, the market gained 14 million new regular wine drinkers, primarily from consumers under 40. Price sensitivity remains a key factor, with average wine prices rising by 3.9% over the past year [5].

Price Segment Market Share Growth Trend
Under $9.49 62% Declining
$10-$49.99 28% Growing
$50+ 10% Stable

Wine-based cocktails, such as those from Beatbox and Buzzballz, are also gaining traction, particularly with younger audiences. These products are projected to hit 10 million cases in 2024 [1]. This highlights the growing importance of targeting younger, health-conscious consumers and focusing on premium offerings to secure long-term growth.

sbb-itb-b080a40

Using B2B Wine Prospects to Support Industry Growth

As the U.S. wine market continues to shift, tools like B2B Wine Prospects are helping businesses tackle challenges and take advantage of trends like the rise of premium wines.

What B2B Wine Prospects Offers

B2B Wine Prospects is a SaaS platform that provides verified contact details for U.S. wineries, vineyards, and vineyard management companies. It's a go-to resource for agtech firms, equipment suppliers, and service providers looking to expand their networks. Here's how it helps:

  • Save time with pre-validated contact information.
  • Target effectively with extensive industry coverage.
  • Reach decision-makers to boost conversion rates.
  • Rely on accurate data with source-linked information.

The platform makes it easier for businesses to connect with the right people and stay aligned with industry trends, like the growing demand for premium wines and direct-to-consumer sales. It’s especially useful for companies focusing on the premium wine segment.

Pricing That Fits Your Needs

B2B Wine Prospects offers options for every budget. Start with a free Basic Plan or upgrade to the Premium Plan for $49/month to unlock full database access and advanced features. The credit-based system ensures you only pay for what you use, making it a smart choice for businesses of any size.

Whether you're just starting out or looking to grow, B2B Wine Prospects provides the tools to stay competitive in a fast-changing market.

Conclusion: Takeaways for Wine Industry Professionals

The U.S. wine market is undergoing changes, with a projected -2% CAGR between 2022-2027 signaling both challenges and new opportunities. Premium wines priced above $10 are driving revenue growth, even as overall volumes decline. Direct-to-consumer (DTC) channels are becoming more prominent, with the average bottle price expected to hit $48.96 in 2024. Health-conscious wines are also gaining traction, with the low-calorie category projected to reach 3 million cases by the end of this year.

These shifts emphasize the need for a strategic approach to adapt to the evolving preferences and demands of the market.

Strategies for Success

To navigate these changes and stay competitive, consider these key approaches:

  • Focus on Premium Offerings
    Invest in quality and build compelling brand stories to appeal to premium consumers. Highlight what makes your wines stand out and tailor your marketing to this segment.
  • Strengthen DTC Channels
    Enhance your direct-to-consumer operations by leveraging tools like data analytics for better market insights. Platforms such as B2B Wine Prospects can help connect with key decision-makers in the premium wine space.
  • Address Changing Consumer Preferences
    Introduce health-focused options like low-calorie wines or experiment with wine-based cocktails. Ensure these products align with wellness trends without compromising on quality.

To succeed in the U.S. wine market, it's essential to balance traditional strengths with modern approaches. By prioritizing premium products, improving DTC capabilities, and embracing health-conscious innovations, wine businesses can create a path for growth. Tools like B2B Wine Prospects provide valuable market insights and connections, helping businesses uncover opportunities and build strategic partnerships in this competitive landscape.

FAQs

What is the wine market outlook for 2024?

The U.S. wine market in 2024 is expected to face declining volumes but shows promise in premium wines and new product categories. Direct-to-consumer (DTC) channels highlight this shift, with average bottle prices increasing by 6% to $48.96, even as sales volume drops by 11%. These trends reflect changing consumer preferences shaping the wine market this year.

Wines priced above $10 are leading growth, indicating a strong preference among buyers for quality over quantity. This shift aligns with the broader movement toward higher-value products and unique experiences.

Key Market Trends for 2024:

Segment Trend Key Drivers
Premium Wines ($10+) Growth Focus on quality
Still Wine -3% CAGR Shifting consumption
Innovative Products Expansion Appeal to new demographics

The 2024 BMO Wine Market Report highlights on-premise sales and wine-based cocktails as areas with strong growth potential [4]. For industry players, success will hinge on capitalizing on premium wine trends while introducing creative product and distribution strategies.

Staying competitive in 2024 will require businesses to embrace these shifts, focusing on premium offerings and innovative formats that cater to evolving consumer tastes.