Lack of Millennial Interest, Labor Shortage Among Factors That Could Cripple Wine Industry
Pandemic-related restrictions and closures hurt most businesses during the initial spread of COVID-19, but while many industries are now on the path to recovery, the wine business has been on the decline. According to a new report, millennials’ preference for premium spirits and craft beers could have a big impact over the next decade — unless the wine industry changes the way it markets to younger consumers.
The 2022 State of the Wine Industry Report, released Jan. 19 by Silicon Valley Bank, found that people over the age of 65 are more likely to choose wine over other alcoholic beverages, UPI reports. The report indicates that baby boomers drink more wine than millennials by nearly a 2-to-1 ratio.
Unless something is done to attract younger generations, the report stated that wine consumption could drop by 20%.
A rebound was expected in 2021 as bars and restaurants reopened their doors to the public, but wine market shares were lost to spirits, UPI added.
“Total wine sold through wholesale declined through most of the year despite tasting rooms, restaurants, hotels and travel resuming business,” the report stated. “We predicted there would be a reopening celebration, and it turns out we were correct, but the reopening celebration that took place in 2021 didn’t include the wine industry.”
Wine yields were also affected by droughts and wildfires per the report. Meanwhile, property insurance costs — as well as supply and labor shortages — pushed up prices. UPI noted that one survey found that 42% of producers had indicated they intend to raise their prices in 2022.
“If we really want to reach the millennial, we need to move away from lifestyles of the rich and famous and add cause-based marketing to our outreach,” the report explained, per UPI.
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