What the Wine Industry Can and Cannot Do About the Nine Conditions Harming Sales

The first thing is to say a little prayer

Those of you who have embraced the 12 steps due to some battle against dependence will intimately know the Serenity Prayer. Most of you will have heard it, even if you have not given it much thought:

“Oh, God, give us the courage to change what must be altered, serenity to accept what can not be helped, and insight to know the one from the other.”

This prayer came to mind as I was thinking of the total tide of circumstances currently impacting wine sales today.

By my count nine important trends currently are negatively impacting the sale of wine. Most of these trends cannot be helped by those in and around the wine industry. They are systemic conditions, rather than contrived (read: Political) issues. In fact of the nine major circumstances and conditions most impacting the sale of wine today, only two can be affected by industry pushback. We should know what can and cannot be counteracted.

INFLATION
Few economic cycles are more incendiary and dangerous than inflation, particularly when wages don’t rise at similar or greater rates. This has been the circumstance in the United States and many other parts of the world for the past four years. There is nothing the industry or its participants can do about it. We can only adjust to it and hedge against it.

INTEREST RATES
As with inflation, the wine industry and those who work in it can do nothing about the cost of money. And yet, growth is almost completely dependent upon borrowing money at a reasonable rate. With higher interest rates, there is less borrowing, less innovation, and less growth.

ALTERNATIVE ALCOHOLIC BEVERAGES
Try to tell an entrepreneur who sees an opportunity that they should not create a novel beverage as an alternative to beer, wine, and spirits for the sake of the alcohol beverage industry. It’s no different than instructing the rock you’ve thrown up in the air to defy gravity. Traditional alcoholic beverages are competing against a new set of upstarts, dividing the pie between more categories. It’s going to continue and there is nothing the wine industry can do about it.

RISK-AVERSE YOUTH ESCHEWING ALCOHOL
Of the nine circumstances conspiring against wine, it is younger, risk-averse people drinking less alcohol than previous generations that I think is the most complex. Younger people are not drinking as much, not having as much sex, not driving as frequently, not fighting as much, among other ways they are shielding themselves from adverse consequences. Personally, I primarily blame online existence for this kind of trend. And there is nothing we can do about it as an industry. However, I’m almost positive it is a trend that will reverse. But don’t ask me when.

CANNABIS
Forgive me: Cannabis has definitely cannibalized alcohol sales. (Sorry). Over two decades ago I predicted this and was told that, no, it would be a complimentary vice. We know now this isn’t true. The way I describe it is that each person budgets a certain amount of “Inebriation Dollars”. Those dollars might go to alcohol. They might go to cannabis. They might go to something else. Legalization has made cannabis more easily attained (in so many forms) and more acceptable in society. This has led to the consumption of cannabis now being more common than the consumption of alcohol. There is nothing the wine industry can do about this. There is a percentage of folks who, now, will choose cannabis over alcohol—reducing the size of the alcohol pie.

CLIMATE CHANGE
Even if the cause is under debate, few deny that the climate is changing and there is little that we can do about this save for some drastic, innovative new technology. And it’s impacting wine sales and wine consumption. While it seems unlikely in the near term that the changing climate will deter those who want to make or who want to drink wine from doing so, it will have a disruptive impact.

OZEMPIC/GLP-1 DRUGS
Yes, there may be side effects. However, anyone who has read about the myriad positive impacts of this class of drugs should find it hard to deny that if anything can be legitimately called a “miracle drug” it’s this stuff. Not only do they effectively cause weight loss, but they also cause a reduction in alcohol consumption. They cause a reduction in most substance consumption. More recent evidence suggests that, when micro-dosed, they can cause a reduction in many compulsive behaviors (like over-shopping), as well as reduce depression and improve feelings of well-being. These drugs will come down in price and will certainly impact the sale of wine. There is nothing the wine industry can do about this.

TARIFFS
Tariffs will harm the wine industry and anyone who doesn’t think so is probably selling a wine they think will benefit from the higher prices of Bordeaux, Burgundy, and Champagne. Even if they are right (and I’m not convinced) Tariffs will most certainly harm many in the wine industry including importers, wholesalers, and retailers. However, THERE IS SOMETHING WE CAN DO ABOUT TARIFFS AND WE SHOULD. Tariffs are a political tool. They are not a result of economic activity or general societal trends. And politics and politicians can be influenced. Anyone in and around the wine industry should be following and paying close attention to the United States Wine Trade Alliance—a unique multi-tier industry organization that is fighting against wine tariffs, making the case they do more harm than good to America, and giving everyone in the industry a way to help push back.

ANTI-ALCOHOL CRUSADERS AND RESTRICTIONS
Though they have always been with us, it is only in the past decade that this group has eyed alcohol as a target rather than a concern. With the World Health Organization now a prominent sponsor of anti-alcohol/anti-alcohol industry efforts, the push to use government levers to achieve the goal of the cigarettification of alcohol is well underway. But this effort, like tariffs, is political in nature. That means THE WINE INDUSTRY CAN DO SOMETHING ABOUT IT. Left unchecked and without pushback, the effort to cast wine as the equivalent of tobacco will lead to some pretty ugly consequences including higher taxes, restricted consumer access, and greater controls on the marketing of wine. What members of the industry should do is support a collective, industry-wide effort to dispel the hysterical claims made about moderate alcohol consumption, such as “no level of alcohol is safe”. However, no such effort exists due to fear of liability by the largest alcohol companies. But this is no excuse for us to sit on our hands and wait for what seems like the most unlikely turn of events: Funding by the largest wine companies and trade associations for a concerted pushback against the health extremists. Instead, if you work in wine, simply arm yourself. Know this study. Also, know this person. Follow the writings of Felicity Carter, David Morrison, and W. Blake Gray. Arm yourself with solid knowledge so that you can individually push back against extremists’ nonsense when they come for your livelihood.

Addicts on the mend understand what can and what cannot be changed to make things right, or at least better. The same holds for an industry in decline. Knowing what can be changed and focusing efforts on those things is the only rational thing to do if you want to be part of the solution.