5 Macro Trends and Their Potential Impact on the Wine Marketplace

The potential Impact of these trends could be huge for the wine industry

I try to spend a good deal of time watching the trailing indicators of the health of the wine marketplace. These are the most immediate gauges of the current state of the market. But sometimes I let myself dabble in the macro influences on the wine marketplaces. These are the trends likely to impact the wine marketplace to one degree or another.

First, the current trailing indicators of the wine marketplace aren’t super rosey. For example, the International Organization of the Wine and Vine described the worldwide retreat from wine. According to Decanter:

“Wine consumption fell 2.6% to an estimated 221 million hl last year, slipping for a second year to the lowest level since 1996, the International Organisation of Vine and Wine (OIV) said in its annual report on the state of the industry. That’s equivalent to around 800 million fewer bottles being uncorked around the world.”

Meanwhile, WineBusiness reported the news that winery direct-to-consumer shipments of wine in March decreased 10% year over year:

“Direct-to-consumer (DtC) shipment value fell 3% versus a year ago to $457 million in March, WineBusiness Analytics/Sovos ShipCompliant reported. Volume for the month fell 10% to 661,231 cases. The declines saw shipment value fall to its lowest level since 2020, while shipment volume approached 2019 levels. Nevertheless, the average bottle price of shipments remained strong, rising nearly 8% versus a year ago to $57.61. This was the third-highest average ever recorded.”

These are short-term indicators of the state of the wine market. But I keep wondering about the long-term trends that will have an impact on wine consumption here in the U.S. Here are five societal and economic trends that could have an impact of one degree or another on the U.S. wine industry and wine consumption.

1. Falling Birthrate
The U.S. birthrate (or Fertility rate) continues to fall in the U.S. In 2023, 1.62 children per woman were born in the U.S., down 2% from 2022 according to the Centers for Disease Control and Protection. This is the lowest U.S. birthrate in nearly a century.

Without other means to increase the population, a lower birth rate means a smaller and older population in the future. A smaller and older population most likely means slower or no economic growth. That’s a wine market killer right there.

The only other way to increase the population and sustain economic growth is through immigration. The most likely source of that immigration is from countries south of the U.S. border and with individuals of lesser means. It’s notable that this demographic is not traditional wine drinkers. Beyond immigrants from Mexico and the south, the top geographic sources for U.S. immigration are India, the Philippines, China, and Vietnam. Again, not traditional wine-drinking countries.

There is no indication or reason to believe that the U.S. birthrate will turn around.