Four Things You Need to Know about the U.S. Wine Industry

The U.S. wine landscape continues to evolve dramatically. Whether packaging or product, there’s a lot happening. Here are four themes you should be following in the U.S. wine industry today.

1. Who is Drinking Wine.

According to Euromonitor’s Wine in the U.S. (June 2017, subscription only), the wine category saw total volume growth of 2% (and is projected to continue growing at the same rate), driven by aging boomers on one end and “demanding millennials” on the other.

They’re two very different groups – and millennials are forcing change upon the industry. As Euromonitor asserts, they’re frugal consumers – demanding quality at an affordable price point – and tech-savvy.

To continue growing the category, the focus needs to be on “selling wine in the style, packaging and price points to meet the evolving needs of our consumer,”  says Stephanie Gallo, VP of marketing at E&J Gallo, in an excellent interview with the U.K.’s The Drinks Business. “Millennials are fueling the growth of the wine category, and their behavior is dramatically different than their predecessors. As a winery, we’re witnessing a paradigm shift in how and when people learn about and enjoy wine.”

2. Bubbles are Big.

Sparking wine continues to be the fastest-growing wine category (10% growth by volume in 2016). Led by Prosecco, wines such as French Cremants, cava and Sekt are also driving sales due to lower price points than champagne and in part the simplicity of consistent offering that don’t delve into vintages, varieties and terroir.

3. Format Matters.

The historic debate between cork, screwtop or synthetic closure has been obviated by the diversity of packaging options from tetra-pack, bag-in-box, to what I find most interesting, wine-in-can. E&J Gallo Winery, which is the largest wine producer with a whopping 24% in total volume share in 2017 (Euromonitor) is leading the charge with Barefoot Refresh, which taps into the sparkling trend. Barefoot is a single-serve can that is low in alcohol and lightly carbonated making the wine ‘sessionable’, says Stephanie Gallo, VP of marketing at E&J Gallo, “Placing it in single-serve cans it has enabled us to secure placement in on-premise accounts that have not traditionally promoted wine in a major way such as sports stadiums, outdoor festivals and concert facilities.”

4. Low-Alcohol Options are Growing.

Savvy brands are developing products that behave more like “grape-based alcoholic beverages” (credit: Robert Joseph) than wine in the traditional sense. Format innovations like wine-in-can have created opportunities for consumers to easily swap in low-alcohol wine for beer or cider. Flavored wines can even compete as a soft cocktail, offering variety of flavor options (see Fun Wine) that can compete in the space with poolside or beach-appropriate offerings that beer brands are already exploring (think Bud Light Lime-a-Rita). Stephanie Gallo says of the Barefoot Refresh brand: “We have concentrated on category expansion to capture sales from consumers who too often shy away from the wine category choosing to purchase a craft cider, cocktail or beer.”

In short, these trends and innovations are creating new marketing opportunities focused on consumer experience and engagement, and new placement opportunities within retails and other consumption occasions. As Stephanie Gallo states, in The Drinks Business interview, “a strong population demographic coming of age should benefit the wine industry for years to come ‘provided we continue to meet the needs of current and future wine drinkers.’”


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