Trouble ahead for wine industry as young consumers snub the drink for spirits and hard seltzers

GLOBAL – The Wine Industry is facing a difficult time ahead as young drinkers snub the drinks for other more popular such as spirits and hard seltzers, a new report by IWSR has found.

According to the report, fewer new drinkers are entering the wine category, particularly from the younger legal drinking age groups (LDA) age groups.

Consumer research data from Wine Intelligence, a division of IWSR Group, shows that participation rates in wine among the LDA-34 age group endured a steady slide over the 10-year period from 2010-to 2020.

This was true across a number of markets, in particular the US, UK, Sweden, and Japan, with the US and UK reporting the biggest changes.

In 2010, around half of UK adults in LDA-34 drank wine once a month, and by 2020 this fell to 26%; in the US, the corresponding fall was 36% to 21%.

The drinks market analysis firm reported that during the same period, participation rates of wine drinkers among the Boomer generation rose in both markets.

Competition, moderation keeps consumers away

Industry stakeholders attribute wine’s declining popularity among young drinkers to a number of factors including increased competition from other drinks to moderation and the Covid-19 pandemic.

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“Many industry stakeholders believe that wine isn’t connecting with the mainstream of younger LDA adult consumers as well as it could, and the pandemic has both accelerated and exposed this,” comments Richard Halstead, COO Wine Intelligence.

“The on-premise was a key channel for consumption of wine at social settings amongst younger LDA consumers prior to Covid. Shutting down the on-premise during lockdowns closed off a key channel for these consumers to encounter wine.”

Halstead further notes that moderation is further narrowing beverage repertoires among wine drinkers with many consumers preferring to choose their favourites over something they rarely drink.

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Brandy Rand, COO Americas, IWSR Drinks Market Analysis is of the opinion that wine is facing increased competition from spirits and hard seltzers, especially in the US.

“Even though the wine category in the US holds an 11% volume share – equal to that of spirits – wine volumes are expected to continue on a downward trajectory,” notes Brandy Rand.

Similar factors are influencing the UK wine consumer as well, says Humphrey Serjeantson, Research Director, IWSR Drinks Market Analysis.

A silver lining for wine makers

Wine Intelligence insights do however point to a silver lining: those younger LDA adults who are connecting with wine tend to be more engaged, enthusiastic, and above all high-spending, especially compared with older Boomers.

This suggests a future of wine ceding ground to other categories as a mainstream, accessibly-priced beverage, whilst retaining and building its premium consumer base – those who are drinking less, but want to have a special product when they do buy wine.

For this reason, IWSR notes that although the wine-drinking population in the US & UK is skewing older, wine brand owners would be remiss to discount younger LDA consumers entirely.

The research company instead advises wine brand owners to simplify the wine education process to help engage consumers who are not sure if wine is for them anymore.

“Similarly, changes in consumer priorities and habits mean that wine brand owners need to re-engage with an audience that’s increasingly older and more affluent, and one that is seeking more premium and interesting wines,” IWSR said.

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