The Advisor Magazine: Issue #15 –

Wine Sales Struggle With Millennial Interest Lagging

The next time you uncork a bottle of your favorite cabernet or sauvignon blanc, ask yourself if seeing the nutritional information listed on the back changes the experience for you? Would the experience be less enjoyable because you were concentrating more on the sugar content and calories per serving than the hints of cherry in your pinot noir, or the smooth taste of your chardonnay? How important are a winery’s social and environmental convictions to you, and would knowing them affect your consumer behavior?

Current data indicates that millennials, who have a large impact on the alcohol industry, prefer having the nutritional, social, and environmental information presented to them, and they aren’t getting it from the wine industry. Wine sales and interest are both lagging the increasingly popular seltzer and ready-to-drink cocktails, and it appears that the culprits behind this shift are millennials.

A recent New York Times article reveals concern over the current state of the wine industry, and according to the article, millennials are not drinking enough wine. Baby boomers and their tendency to opt for wine has led to a healthy wine market in the past; however, as these boomers reach retirement age, they have less influence on the market because they aren’t spending as much. Millennials, on the other hand, do have much more influence on the market and have an agenda as a health-conscious, socially aware, environmentally concerned generation.

Rob McMillan, an executive vice president of Silicon Valley Bank in Santa Clara, California, and a long-time analyst of the American wine market, states that “Sales of American wine could plummet by 20% in the next decade,” and this decrease could be because the wine market has not addressed millennial concerns yet.

“It [the wine industry] has failed to recognize the changing demographics that millennials represent,” according to the article. McMillan suggests that in an effort to adapt to what millennials want, winemakers could list ingredients and nutritional information, for example, or make their social and environmental values clear.

Millennials are a generation of hard seltzer and premade cocktail fans, less often opting for the glass of wine than for their can of choice. They are not only making a stance on noting that their calories count, but they also want to know how and where these calories were made – – and wine producers haven’t offered that information yet. They also haven’t made professing their social and environmental views a priority, which apparently has not settled well with this extremely health-conscious, socially and environmentally aware generation.

Another factor contributing to the decline in wine sales amongst millennials is that wine tends to be a more expensive beverage option, whereas hard seltzers, RTD cocktails, and craft beers are less expensive, and millennials are generally more financially burdened than their parents. Millennials are entering a world where everything costs more, including their education and homes, and they will cut costs where they can.

As more “organic”, “sugar-free”, and “low and no alcohol” wines appear on the shelves, it does cause consumers to take pause and consider why these options are suddenly appearing. The future of the wine industry is yet to be determined: Will shelves will soon be lined with “healthier” wine varietals, with declarations of environmental responsibilities and social commitments plastered on their bottles? Do wine lovers want that? Does the wine-loving generation have enough of a market pull to maintain wine’s classic image?

The verdict is out, and upcoming trends and sales will tell. 

For more articles on the liquor industry – check out The Advisor Magazine – Issue 14.

The Advisor Magazine: Issue #14 –

DTC Wine Shipments Hit $4 Billion in US

Although pre-pandemic activity has begun to reemerge as consumers return to restaurants, bars, and wineries for their favorite glass of wine, DTC (Direct-to-Consumer) wine shipments in 2021 surpassed $4 billion for the first time in the U.S. What does this surge mean for wine sales in the on and off-premise markets?

The reason for this advance could be that although wine shipments jumped 28% in 2021, the year-on-year increase in volume was small, and the jump in shipments could be due to the surge in price per bottle – which increased a record 11.8%. However, consumers still spent their money on higher priced wines via DTC channels.

Andrew Adams, Wine Analytics and report editor at Wines Vines Analytics, commented, “Increases in price per bottle shipped helped balance out the decreases in volume that some regions experienced, creating an overall increase in value for the West Coast”. (Napa enjoyed an almost $400 million increase in value of DTC shipments in 2021!)

Another reason for the staggering increase could be that although eating and drinking establishments are reopening, many consumers enjoyed the convenience of DTC purchases that they discovered during the pandemic. Although the need for such a service has lessened with restaurants, bars, and wineries reopening their doors as some restrictions lifted, the service had such a positive impact that it seems to have continuous power.

According to beverage alcohol consultant Danny Brager, “as COVID-19’s impact on travel and tourism lessens, there is every reason to believe DTC shipments based on winery visitation and new club memberships will be strong in 2022.” Perhaps consumers will enjoy the best of both worlds.

Combining consumers’ enjoyment of DTC convenience with the enthusiasm of returning to restaurants for their favorite glass of wine must leave liquor store owners wondering, how can we position ourselves to remain relevant and indispensable in today’s market?

For more articles on the liquor industry – check out The Advisor Magazine – Issue 13.

The Advisor Magazine: Issue #13 –

MassPack Continues To Fight Against Bill Expansion

A recent Massachusetts Package Stores Association (“MassPack”) newsletter and message to MPSA Members from Executive Director Robert Mellion provided some great insight into the work that his association did in 2021 and continues to do in 2022 regarding the many circulating bills that could impact alcohol beverage retail as we know it. According to the newsletter, more than 190 bills were introduced during this legislative session that would impact alcoholic beverage retail – 100 of which would directly overtake local retail by replacing them with out-of-state choices for consumers.

Some of the 2021 highlights from MassPack include:

· Cumberland Farms was derailed from filing another ballot question initiative which would allow unlimited food store licenses to sell beer and wine.

· MassPack prevented industry disruptors from using Covid to further modify alcohol beverage regulations, advance online lottery, and allow for direct shipping of distilled spirits.

· MassPack testified at more than 25 hearings on over 180 bills; a third of the bills filed this session expand off-premise licenses or repeal state and municipal quotas.

· MassPack testified against bills by out-of-state chain stores, supermarkets, and big box retailers that dismantled local licensing and state quota systems.

· MassPack is the only alcohol industry participant to testify against five bills increasing excise tax on alcohol.

· Only MassPack challenged six bills that either ban or place a deposit on miniature bottles and testified against “Nip Bans” at more than 20 municipal hearings across Massachusetts.

· Adding alcohol shipments to the U.S. Postal Reform bill was a top priority.

And as the new year begins, MassPack is already testifying against remaining bills that seek to expand licenses, such as:

· An Act that would further regulate certain licenses for the sale of alcoholic beverages, which is very troublesome because this bill increases the number of allowed all-alcohol retail licenses from 9 to 18.

· An Act concerning the sale of wines and malt beverages by food stores would allow marketplace control of the cheap to moderate alcohol beverages marketplace.

Although the number of bills to monitor and consider is considerable, MassPack asks that we “weigh how [these bills] impact the ABCC’s ability to regulate, consequences to the marketplace and whether these bills undercut public health and safety.”

For more articles on the liquor industry – check out The Advisor Magazine – Issue 12.