Is the wine industry in trouble in the US?

Declining wine sales in the US loom as a major problem for the industry in 2024, a new report says. 

The annual Silicon Valley Bank’s wine industry report reveals “near 0% value growth” and warns that “flash sales” and “increased discounts” will become more commonplace in the US, industry authority The Drinks Business reports.

Wine sales in the US are predicted to continue their slow decline during 2024, although tasting room visits and direct-to-customer sales are expected to slightly increase during the year, as will premium wine sales, according to the 23rd annual wine report issued by the bank this week. 

Preliminary 2023 year-end estimates show a decline in wine volume sales of 2%-4%, and final value sales figures for 2023 are expected to “hover near 0% growth,” the report says, although adding, “Total premium wine sales by value will improve in 2024.”

A further issue for US producers is that exports are relatively minimal with global markets not keen on wines made with sweetness and lashings of new oak. 

A continuing healthy American economy is key to predictions, says the report’s author, Robb McMillan, who predicts that “the US economy is  unlikely to enter a recession in 2024.

“Wholesalers are full up, as far as they can go,” McMillan says, which is making them “more picky” in what they buy from wine producers. 

Wholesalers “are more afraid of being stuck with inventory that they may have to discount,” McMillan says, than they are with inflation and “the costs of carrying inventory.”

One concern the report cited was continued over-production in two of the three major wine states - California and Washington - even though sales have declined for three years. Oregon production was assessed to be “in balance with demand”. 

Image: Filoteo Ventiuro, Scop.io