Last week, financial and management professionals from the wine industry gathered at Copia in downtown Napa for the highly anticipated annual Wine Industry Financial Symposium. The packed venue set the stage for an in-depth analysis of the state of the wine business, consumer trends, policy impacts and innovative practices. Below, we highlight key takeaways from several sessions, which laid the groundwork for actionable insights for other sessions across the two-day event.
Balancing Supply and Demand
Jeff Bitter, president of the Allied Grape Growers, set the tone for the symposium with a stark overview of the industry’s challenges. The urgency of balancing supply and demand was underscored as California wine shipments fell 8% last year and 6% in the first half of 2024. The 2024 harvest is 15% below average, predicted to be in the low three million tons, compared to the four million tons of grapes California can produce. Bitter’s message was clear that we are at the peak of the listed gallons for sale on the bulk side, with an excess supply of 25 million gallons. He believes the current market difficulties will persist until inventories flatten, with analysts expecting a recovery by the end of 2025. Vineyard removals have begun, but more are needed to strengthen recovery. Bitter also stressed the need to address lagging demand through innovation and targeting demographic shifts, as growing Hispanic, Asian, and African American populations remain underrepresented among wine consumers.
Consumer and Retail Trends
Kaleigh Theriault, Beverage Alcohol Thought Leader at Nielsen IQ, expanded on consumer behaviors and retail trends shaping the future of wine. Moderation of consumption, such as drinking less or choosing non-alcoholic, is a trend that might continue. Premiumization appears to be tied to moderation. People will choose one glass of premium wine instead of several glasses of value wine. In looking at off-premise value and volume by beverage category, RTD is the only growing category. Theriault said wine continues to compete with Ready-to-drink (RTD) beverages and THC products among younger consumers, as they are often used for similar occasions. She feels there are growth opportunities in the $15–$20 price range, “better-for-you” wines, organic certifications, and non-alcoholic options.
Insights from Wine Executives
Emily Porter and Nigeria Cole from the Wine Business Institute at Sonoma State shared findings from the 2024 Wine Executives Survey, based on 362 respondents. Strategies for boosting profitability included cutting costs, raising prices, and improving consumer-focused sales. Survey results highlighted shifts in tourism offerings, with wineries offering more luxury experiences and promoting local wines. Sustainability programs, particularly sustainable farming, remain common, though initiatives targeting younger generations dropped from 60% to 30%. Nearly half of wineries are now disengaged from diversity programs. Additionally, 42% reported reducing product lineups. Panelists Janet Llamas (Cliff Lede Vineyards) and Alicia Cronbach (Cronbach Law Group) advised focusing on retention, preserving employee benefits, and ensuring compliance.
Predicting the Next Four Years
Callum Williams, a senior economics writer for The Economist, shared a global economic outlook and the potential implications for the wine industry under shifting American political leadership. While the economy rebounded strongly after the pandemic, inflation has strained consumers. These daily economic concerns had a significant impact on the recent presidential election. There is a lot of uncertainty about the next four years for the wine industry, including more tariffs and reduced regulations. However, the increases and changes during Trump’s previous term were not substantial. Nevertheless, it should be something to watch. Williams emphasized paying attention to America’s relations with China as the slow movement to end globalization continues. He also warned that proposed mass deportations of immigrants could severely disrupt the labor market and broader economy.
These particular sessions at the Financial Wine Symposium set the stage for the two-day event, offering a comprehensive look at the challenges and opportunities shaping the wine industry’s future. From supply-demand imbalances and evolving consumer trends to global economic uncertainties and policy shifts, industry professionals were provided with a better sense of the state of the wine industry. The rest of the Symposium focused on sessions with actionable insights and solutions to the challenges.
