Despite dire warnings earlier in the year that U.S. wine sales had decreased in 2021, the recently released Gomberg & Fredrikson report, based on government tax paid data, shows wine dollar sales up a surprising 16.8% in 2021 over 2020. Total wine sales, including domestic and imported wine were $78.4 billion, compared to the previous year’s figure of $67.3 billion. Yet the reasons behind these increases suggest the wine industry still needs to focus on being more innovative and reaching out to new wine consumers. Fortunately, some of the most popular wine categories of 2021 point the ways to hot trends to consider capitalizing on for the remainder of 2022.
According to Jon Moramarco, Editor & Partner with Gomberg & Fredrikson, as well as Managing Partner for bw166 – both well-known wine research firms – “The wine category performed well in 2021, but not great. A headline increase of 16.8% in consumer spending sounds good, but this was primarily driven by channel shift from off-premise (retail stores) to on-premise (restaurants and bars). The reverse had occurred in 2020 with a decline in overall consumer spending.”
So obviously Covid had a part to play in this increase in wine sales, as many consumers felt more confident to return to restaurants, bars and other on-premise establishments in 2021. The price mark-up on wine in on-premise is usually around double the retail store price – mainly because restaurants and bars need to recoup their costs in service, glassware, and other over-head costs.
Overall, according to Gomberg & Fredrikson, U.S. wine sales volume in 2021 was 452.4 million 9-liter equivalent cases, compared to 434.8 million in 2020, or an increase of 3.8%. These figures were based on not only domestic and imported on and off premise sales, but also include direct to consumer shipments from wineries and U.S. winery cellar door sales.
Demographics of the American Wine Consumer in 2021
A look at 2021 demographics of U.S. wine consumers also highlights the need for the wine industry to reach out to new consumers. According to the 2021 Wine Market Council Benchmark Segmentation Survey of 5,724 American consumers, only 32% of adult Americans drink wine, down from a previous high of 35%. However, given the fact that this is a consumer group of 79 million adults – larger than many European countries, such as France, which is only 67 million people, including children – it is understandable how the U.S. is the largest wine market in the world.
According to the study, the current demographics of American wine consumers are 59% female, and 41% men. This shows that the number of male wine drinkers is dwindling from a high of 45% several years ago. The age of wine drinkers may also be of concern because the survey shows that only 25% of 20-29 year old consumers (Gen Z and younger Millennials) drink wine, whereas 38% drink beer and spirits but not wine. This is in comparison to higher wine consumption for older consumers, with 30% of ages 50-59, 34% of ages 60-69 and 38% of ages 70+ drinking wine. However there is a bright spot with 33% of consumers aged 30-39 consuming wine, compared to 29% of consumers aged 40-49 drinking wine. It is useful to note, however, that other research on wine consumption shows that many people in their 20’s do not drink much wine, but wait until their 30s to adopt it as part of their lifestyle.
A more concerning portion of the survey illustrates that not much progress has been made by the U.S. wine industry in encouraging multi-cultural consumers to enter the wine category. Currently, 70% of U.S. wine drinkers are White-non Hispanic, while 13% are Hispanic, 12% are Black, and 4% are Asian. These numbers are almost identical to statistics published by Nielsen Spectra in 2016, suggesting the need for more attention on the wine style and advertising preferences of multi-cultural consumers.
Hot Wine Trends for 2022 in the U.S. Wine Market
Part of the solution for expanding wine market share in the U.S., as well as adopting more innovative wine products, may reside in some of the hot wine sales trends from 2021 that are continuing to grow in 2022. According to year-end Nielsen scan data in Wine Business Monthly (March 2022), Sipsource, and the Nielsen IQ Beverage Alcohol Review for 2021, the following wine categories are performing well, with a good chance of continued growth.
Zippy Sauvignon Blanc – while almost every other wine varietal did not see much dollar sales growth during 2021, sauvignon blanc, with its fresh, clean style achieved 3% dollar growth. Americans seem to be gravitating more towards zippy refreshing white wines, and this trend is expected to continue in 2022.
Bubbles Persist – Sparkling wine continues to show growth, especially Champagne & Prosecco, with a 27.9% volume increase in 2021, according to Gomberg-Fredrikson data. On the dollar side NielsonIQ reported that all sparkling wines priced above $20 grew double digits. It seems Americans are in love with bubbles, with predicted continual growth. It is especially popular with younger consumers, making it a good on-ramp to welcome new consumers to the wine category.
Big Reds $15+ – Cabernet Sauvignon, Red Blends and Merlot showed double digit volume growth in 2021 in the $15+ price range, especially during the last quarter of 2021, according to NielsonIQ and SipSource. Premiumization has continued, and it seems as if Americans want to treat themselves after the Covid scare with higher-priced wines. This trend is expected to continue further into 2022.
Wine Cocktails – The wine cocktail category is exploding, especially those in single serving sizes that are Ready-to-Drink. Americans want convenience, and they also want to experiment with new flavors and styles. Sangria, spritzers, fruit-flavored wines and other innovations in this category grew at an amazing 48.5% in value and 35.5% in volume in 2021, according to NielsonIQ, and it is expected that this trend will continue in 2022.
No-Low Alcohol Wines – As Americans become more focused on Health and Wellness, they are seeking products that are “Better for Me.” No and low alcohol wines fits this category, as well as natural wines and those using these types of descriptors: “no taste additives, gluten free, low carb, vegan friendly, sulfite free, low calorie, low alcohol, no sugar added, organic, paleo friendly, plant-based, clean, etc.” NielsonIQ reported that the non-alcoholic wine category grew 27% in volume in 2021, and IWSR forecasts show that across 10 key markets, the no-and low-alcohol category as a whole will grow by 8% volume CAGR (2021-2025).
Eco-Friendly Wines – Many wineries are making great progress in sustainability, but not doing a very good job telling consumers about it. According to NielsonIQ, 17% of consumers are more likely to purchase products that are sustainable/environmentally conscious and 16% are more likely to purchase products that are socially responsible. Given that many U.S. wineries are certified sustainable, it is important to communicate this fact on labels as well as websites.
Smaller Sizes and Alternative Packaging – Related to the wine cocktail craze, Ready to Drink (RTD) single servings and wine in smaller containers, especially 375 ml glass bottles along with tetra and 187ml plastic bottles showed growth in 2022. Canned wine performed well in the summer, but lost traction towards year end. With more and more Americans concerned about the environment, there is opportunity for the wine industry to promote alternative packaging as a way to decrease their carbon footprint, and meet consumer needs.