Wine Sales Continue Expanding!

Whew!  Some good news arrived over the weekend, in the form of a report stating U.S. wine consumption eked out another increase again in 2009, continuing our hitting streak into its sixteenth straight year.  If my memory serves correctly, this is the first time such sustained growth has occurred in our 233 year history as a nation.  So why was last year so painful for so many of us in the wine industry?

So before we break out the party hats and pop corks on bottles of bubbly, let’s put these findings in perspective. Here are some highlights from this weekend’s report:

— 2009 marked the 16th straight year of growth in wine sales, up 0.6% over 2008.

— Wine sales have shifted from on-premise (restaurant) to retail stores (especially grocery stores) as consumers increasingly choose to dine in, but still want wine.

Consumers are buying less expensive wine,  which will have a long-term effect on the market.  (emphasis is mine)

— Direct sales to consumers at tasting rooms, or through wine clubs and the Internet, are gaining in popularity.  (emphasis is mine)

First, let me calm the fears of anyone who might think America is becoming a nation of drunkards.  The average American adult consumes less than one case of wine every year – that’s less than a bottle of wine per month, for those who appreciate math subtitles.  That puts our population at #18 on the chart of per-capita wine consumption, in case you’re keeping track at home.

And while I’m pleased to hear  that wine drinkers are buying more from wine clubs (like mine!) and online stores (like mine!), my bet is that most wine club purchases are occurring directly from the winery, where club membership recruitment is far more effective than in most retail stores, despite the greater access to quality of the latter distribution channel.

In addition, the less expensive wines that enjoy an inordinate share of the consumption growth (1.1% for this sector vs. 0.6% overall) are the exclusive domain of large physical stores (Grocery, big box stores, discounters, etc.) , since shipping expenses run as much as the cost of the wine.  I believe this trend will develop in two ways.  First, one portion of those drinking less expensive wines will continue to do so for the rest of their drinking days.  But another, probably far smaller group, will find the aromas and flavors of inexpensive wines to be limited and predictable and far too similar.  This is the group that will grow into upscale wine drinkers in years to come.

Now, how do I get hold of those folks, begin a conversation, and stay in business until they see the light???  hmmmm.

Dave the Wine Merchant

Quote of the Day
“WINE, n. Fermented grape-juice.  Known to the Women’s Christian Union as “liquor,” sometimes as “rum.” Wine, madam, is God’s next best gift to man.”
~ Ambrose Bierce, American Wag, Writer, and Journalist (1842-1914)