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Wine biz doing okay despite recessionary fears

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The national media is discovering the news, already several months old, that the U.S. has now become the world’s top wine consuming country. CNN and Bloomberg News actually had it last night as a top story: “Move over France, USA topping wine consumption,” CNN headlined it.

This doesn’t mean America has the highest per capita consumption. We simply drink more in total tonnage than any other nation, because we have so many people.

The Wine Institute says the average amount of wine consumed per resident last year was 2.54 gallons, up .04 gallons from 2009, and about 30% more than the 1.96 gallons per person in the year 1978, which is when I moved to Califronia and discovered wine.

Some pessimists lately are predicting that the lousy economy will reverse this upward direction. “Downturn to slow US wine consumption,” Decanter blared last week, but I don’t buy it. Americas continued to drink more and more during the worst of the recession, 2008-2009, although they also drank cheaper, and I expect we’ll continue to enjoy our wine, no matter how bad things get. Americans like to drink alcoholic beverages. We already were a beer and spirits consuming country before wine got big; now, we’re a wine drinking country too. Case sales of wine have been up in this country for 17 consecutive years, and it would take a catastrophe of unprecedented volume for that to reverse.

Last April, when the news about U.S. wine consumption came out, I blogged that Millennials get the credit for driving sales. My take on them is that they’ve got the wine bug now. They may be having problems getting jobs, or good jobs; they may have returned home for a spell to live with mom and/or dad, ‘til things get better. They may be sharing a two-bedroom flat with four of their friends, to make ends meet. Or they may be doing perfectly well, holding down well-paid gigs in our big cities. But one thing the recession isn’t going to rob them of is a nice glass of wine, at home or in a bar.

In fact, check out this article, by a marketing analyst. He says that, even though “this is not the best of times for Millennials,” they are “More likely to splurge on expensive alcohol brands [and] more likely to purchase wine and hard liquor than their previous generations.” It may sound cynical, but, the analyst concludes, even as the “Economy Crushes [the] Average American [the] Liquor Industry Rejoices.” Consumers, including Millennials, are spending less on everything from clothes to autos to vacations, but they’re drowning their troubles in wine.

  1. Finally, an article mentioning Millennials that doesn’t make us look like a bunch of know it all morons and or the beacon of hope for the Wine World (although I am both a beacon of hope AND a moron, so I have that going for me).

    You have this right Steve! First, on the economy: I have a number of friends making wines EXCEEDING $50 a bottle and they are in some cases closing their public tasting rooms because demand is so high they simply can’t provide wine for a tasting room.

    I think this recession has been hard on the big brands that make expensive wines (the guys selling $50 wines at grocery stores across the Country) but good for the genuine craft producers who have heart and soul.

    I can tell you this, young consumers (in addition to ironic mustaches, The Arcade Fire, bikes with no brakes, and PBR) like quality, genuine, honest products. That’s why craft beer is EXPLODING!

    You are also right in the fact that while Gen-X spent a lot of effort chasing the BMW and a $750,000 condo they got on a sub-prime loan, my friends are largely keeping it simple but spending decent money on good food, good drink, and good music. I for one think it is a culture shift and a good one at that. Less material focus, more substance.

    However, if you are a Millennial like me and think what I am saying here is “we are so great, we ARE changing the World!” get a grip. Without everyone before us, who cut the trails, we would not have all of this great wine to enjoy. We are but a component to a big beast. I learn everyday from people twice my age and I hope I continue to do so.

  2. Wayne, you sound like a pretty smart guy. Thanks.

  3. If you look at the long term data in the U.S. and quite a few other developed countries, there actually isn’t much of a correlation between per capita wine consumption in volume and the state of the economy. It’s probably not that the economy has no effect, but this effect seems to be overwhelmed by trends in culture, taste, demographics and marketing. The economy does have a significant influence on spending on wine, but not necessarily in a straightforward way.

  4. Ryan Flinn says:

    During the recession, a lot of people stopped going to restaurants and ordering bottles, and instead stayed home and drank (off-premise sales increased while on-premise declined). I think it’s clear the US is finally, finally emerging from Prohibition, in a sense that people are viewing wine as part of a meal versus something only for special occasions. The millennials are certainly part of that — as a generation they’re drinking more wine on a regular basis than previous generations. Maybe it’s because many of them study abroad during college and get used to the European lifestyle.

  5. Donn Rutkoff says:

    Well, still not mostly part of a meal. Just fun and pleasant to drink. Per capita is so low, it can only go up. 2.5 gallons per person here, in Europe the numbers are in the 20s per person. Millenials or not, people here on the coast are making up for the still dismally low numbers inland, I bet.

  6. Steve, you continue to be by turns mystified and charmed by those wily, wining Millenials. My two cents? It’s very simple. We’re talking about YUPPIES. Nothing pejorative meant by this: in the original sense of Young, Urban Professionals of the Baby Boom gen who liked nice things, and when they got some money they got into wine, in their 20s and 30s. Check out any Saturday or, and I’m not recommending this, barrel tasting weekend in wine country, and you will see young urban professionals from Sunnyvale who like to drink and buy nice wines. And that’s a good thing for wine!

    This is just not really the handlebar mustache crew that the ahistorical Wayne describes. For many in Generation X, wine and “wine bars” were tainted with the perceived excesses the Boomers enjoyed in the 1980s, and during the Recession (the one in the 90s? hello? anyone remember?) many turned to cheap beer like PBR as well as brew pubs, bicycles, retro facial hair, and later Burning Man-style…Anyway, just about everything that the more artistically inclined members of the “millenials” are currently still riffing on. But they did not inherit a fear of wine, and bully for them.

    Small points indeed, and I don’t mean to engage in a generational pissing contest on your blog, Steve, but you’re a journalist and I hate to see you accept on face value that the so-called “GenXers” invented the BMW. I mean, c’mon!

  7. James, thanks for contributing to an ongoing conversation. I hope to be around to arrive at some definite conclusions.

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