Consumer demand remains lower than expected amid rising economic concern and inflation. Winery recruiting and total sales stayed strong as direct-to-consumer shipments declined in both value and volume.
Wine on-premise sales have rallied but the sector remains very different than it was three years ago as ongoing and new challenges imperil further growth. Total U.S. sales in June grew 12% even as winery direct-to-consumer shipments fell in both value and volume compared to last year.
The domestic and global wine markets continue to recover based on sales of higher-priced wines yet ongoing disruptions and inflation could slow that growth. Winery recruiting remains strong, as direct-to-consumer shipment value grew by 8% and sales of domestic wine grew by 9%.
One of America’s most popular red winegrapes was a pandemic winner thanks to direct-to-consumer shipments (DtC) and premiumization, but costs and supply challenges could limit future growth. Total DtC shipment value fell 3% in April while the entire U.S. wine market grew 19% to $80 billion.
As the packaging trends of the pandemic ebb, glass sales increase with premiumization while a demographic shift is sustaining the growth of smaller, alternative packaging. Winery recruiting and import wine sales also showed strong growth in the latest Wine Industry Metrics.
Total U.S. wine sales, winery direct-to-consumer shipments and winery recruiting all continue to post positive gains while the grape market remains active despite worsening challenges from inflation, global turmoil and the pandemic.
Mergers and acquisitions within the wine industry jumped to a new high in 2021, and many expect that increased activity to hold through the coming year. Sales for higher priced wines continue to lead growth in both direct-to-consumer and retail channels as the on-premise recovery continues as well.
The U.S. wine market has bounced back from the disruptions of 2020, but a new year comes with ongoing pandemic challenges and a crowded and competitive beverage alcohol market.
As another disrupted year comes to an end, the U.S. retail market has stabilized but looks very different than it did before the pandemic. The coming year is expected to bring price increases as wine brands face an intensifying fight for market share. In this month’s Industry Metrics, winery direct-to-consumer shipment volume saw an all-time monthly high of more than 1 million cases while the average bottle price of shipments also reached a record high point for November of more than $50.