The State of the Wine Industry session at the Unified Wine & Grape Symposium in Sacramento recently featured four distinguished speakers sharing insights into various aspects of the wine industry’s current state. The session delved into both the demand and supply side of the industry, as well as an international perspective. This two-and-a-half-hour session, known for using the best available data, did not disappoint. Speakers provided a comprehensive overview of the wine industry’s substantial challenges and valuable insights into the wine market trends for the coming year.
Unpacking Decline on the Demand Side
Danny Brager, an authority in the beverage alcohol industry, explored the current state of the wine industry from the demand side. The data strongly supports a declining consumer demand for all alcoholic beverages, with wine experiencing the most significant shift. As the wine industry’s core consumers are older and white, he pointed to an underdeveloped wine market among young adults, particularly those from multicultural backgrounds. The lifestyle of moderation continues to gain momentum, with rising interest in zero or low-alcoholic beverages. He also delved into the competitive landscape within and beyond the alcohol industry.
Bragger proposed key considerations for the industry’s path forward, emphasizing the use of data and analytics to gain insights into consumer behaviors and market trends. He stressed the importance of understanding price tier nuances and the need to drill down into the sales data. Experimental-driven products, such as flavor-forward wine, and the demand for convenience were highlighted as key drivers. Wellness considerations for individuals, society, and the planet remain paramount. He also advocated for more collaboration within and outside the industry.
Navigating Excess on the Supply Side
Steve Fredrickson from Turentine Brokerage shifted the focus to the supply side of the wine industry. Since 2023, the industry has grappled with an excess of grapes for various reasons, including a large crop this year due to a late harvest. The result is lower prices for growers but bargains for consumers. The excess of grapes impacts prices, quality, and the financial health of the wine industry. Fredrickson stressed the need for alignment between buyers and sellers to address excess grapes, stimulate innovation, and increase economic efficiency. He also stressed the importance of growing consumer demand through new products and coordinated efforts to counter the anti-alcohol narrative.
Strategic Planning on the International Side
Susana Garcia Dolla from the Interprofessional del Vino de Espana provided an international perspective on the state of the wine industry. Spain is a world leader in the wine industry, most notably for its large number of vineyard acres, long tradition, and quality in winemaking. She focused on the challenges and opportunities facing the Spanish wine industry today. The market has struggled with fragmentation, production variability, and export dependence. Threats to the industry include climate change, anti-alcohol trends, and low profitability. Spain is addressing these issues by developing a national strategic plan to address the wine industry’s challenges, including ten pillars, 22 initiatives, and 101 related actions.
Facing Reality on the Grape Supply Side
Jeff Bitter from the Allied Growers Alliance shared insights into the challenges grape growers face in the industry. Although factors were tempering the crush, such as mildew or rot concerns, one of the most challenging issues is an estimated large crop from the 2023 harvest. The Nursery Survey, in which all the major nurseries participate, indicated that in 2023, 19 million winegrape vines were sold, and 19,000 acres were planted. Of those planted, 37% were white grapes, and 63% were red grapes. This number is similar to the 20,000 new acres bearing this year. Jeff concluded by emphasizing to the grower the need for immediate action by removing 50,000 acres to adjust the bearing acreage.
In summary, the Unified Wine and Grape Symposium provided a comprehensive overview of the challenges and opportunities in the wine industry, covering aspects of demand, supply, international perspectives, and grape supply. The speakers highlighted the importance of data, planning, and collaborative efforts to address the industry’s complex and evolving landscape.
