A trend called Neo-Prohibitionism combined with less wine consumption by younger generations has left baby boomers as the wine industry’s sole BFFs.
Those are three main takeaways from a sobering analysis of U.S. wine consumption by the wine division of Silicon Valley Bank (SVB).
“Prepare yourself and take a deep breath,” Rob McMillan, wine division executive vice president and the 102-page report’s author, noted in the introduction.
Each year, the Silicon Valley Bank Peer Group Analysis database collects insights from wine producers, consumers, retailers and on-premise sources regarding the wine landscape from California and across the United States.
One of the few pieces of good news, the analysis says, "that should be underlined and shouted from the rooftops” is that sales of premium wines saw an average revenue increase of 9.7% last year.
“The more difficult news is that for the industry as a whole, we aren't measuring up. Wine sold below $15 continues to slide and we will have a second year of negative volume growth in the industry as a consequence,” McMillan wrote, with reference to 2022.
The term Neo-Prohibitionism is a reference to a Constitutional amendment barring the production, importation, transportation and sale of alcohol from 1920 to 1933 — a period known as the Prohibition Era.
According to McMillan, Act 1 of Neo-Prohibitionism dates to the early 1980s, when government agencies and private-interest groups aligned with the goal of “reducing or eliminating the harmful effects of alcohol consumption.”
One result was the addition of a government warning on alcohol labels under the Anti-Drug Abuse Act of 1988.
Things began to flip, however, following a 1991 CBS “60 Minutes” broadcast on the so-called French Paradox — which suggested that wine consumption had health benefits — resulting a spike in red wine consumption.
That led to Act II, which was characterized by a slew of conflicting research about the impact of alcohol on healthy and safety. One “bellwether win” for those who opposed alcohol emerged in 2018 when United Kingdom Chief Medical Officer Sally Davies stated publicly that “There is no safe level of drinking.”
This week, the Canadian government released strict new alcohol health guidelines that recommend the consumption of a maximum of two drinks per week — accompanied by a report that concluded “any amount of alcohol is not good for your health.”
It is the confluence of Neo-Prohibitionism and the “sober-curious” and wellness movements that generates wine-industry headwinds among younger consumers.
According to SVB, baby boomers still lead all age cohorts when it comes to wine drinking, while consumers younger than 50 drink it but “more often drink across categories.
“But a sizable number of alcohol consumers under 50 fall into the category of consumers who imbibe but have chosen not to drink wine.”
The report also cites an “embarrassingly low” level of spending on wine advertising — which represents just 5% of all alcohol beverage advertising spending.
“Our category isn't playing in the same league as beer, spirits or even flavored malt beverages when it comes to creating interest in the products,” wrote McMillan.
“Wine was last cool with young consumers 30 years ago.”
As an older, mainly wine drinker the problem isnt with the under $15 vs. Premium wines but the lack of education that to find a quality, highly rated wine under $15 isn't difficult and you dont need to spend a fortune!
Being in a state liquorcontrolled state, their Premium collections are generally excellent, and if you just go by the rated wines by Wine enthousiasts etc. 80% of the time you can find Premium quality wine for under $15!
Of course if you prefer to fulfill your need for snobbery and pay 3-4x more be my guest!