Beer Marketer's Insights - Wine Won't Flatten Out 'Til 2027-2028, SVB Expects; "No Bright Spots"; Winning Wineries Look Outward

US wine volume and $$ sales declined again in 2025, down every yr since 2020 and it's likely to stay that way for the next yr or two, Silicon Valley Bank exec veep Rob McMillan projected during annual state of the industry presentation today. The scale of the decline depends on the precise measurement and the source. SVB serves high-end/small wineries primarily and pegs wine's decline at low single digits. Other sources suggest a mid-single-digit decline, while distrib depletions are down more like high singles. Rob sees "some signs that we're flattening," tho, and expects to "get to a bottom in '27, '28," or so. But it'll be a "bumpy bottom," showing up first at retail, then wholesale, wineries and growers in turn. And the category is likely to remain flattish thru 2030, he figures. So he's "a little afraid" that "a lot of us are just waiting for the bottom to hit." But it's "not going to flip on its head," Rob reminded. All the problems facing wineries won't be solved by a macro industry-level trend, he advised: "you've gotta jump in and figure out how to improve your top line.""No Bright Spots" on Varietal, Price Tier Trends Analyzing off-premise retail sales trends, Rob found very few varietals or price tiers improving for 26 wks compared to 52 wks thru Nov 1. And all the trends are negative. "There are no bright spots out there right now," said Matthew Owings, VP/genl mgr of Rombauer Vineyards. "There's no saving grace varietal," he continued. And most got worse as 2025 went on. In terms of price, "pretty much everything under $12" is down high singles at least, Rob observed. Things aren't quite as bad in the $15-25 per bottle range, but again, all trends are negative in NielsenIQ data.Distrib Disruption on Periphery Panel focused on premium winemakers largely skirted around current upheaval within the distrib tier. Both Matthew and Janie Brooks Heuck of Brooks Wine stuck to viewing distribs as "partners," tho Janie only works with relatively small outfits, none of "the big guys," as Rob put it. He asked and then immediately retracted whether wholesalers were "repping your wine" or simply "moving boxes."Gotta "Pour the Heat on" Moderation The panel also briefly touched on last wk's release of the new Dietary Guidelines for Americans, which Rob called "kind of a mixed bag." It was "a victory in some respects" and "better than the bag that could have come out," he said, citing efforts of what he calls the "anti-alcohol industry." In his view, the "follow-up" is what will matter most in terms of impact on the industry. "We need to kind of pour the heat on" in the aftermath and keep emphasizing "moderate consumption."Trading "Reverence" for "Levity" to Recruit New Drinkers Folks in the wine biz continue to face steep challenges recruiting younger drinkers as wine still wins against other alc bev types among those aged 60+. Laying survey responses about consumption habits across census data, Rob found 31-45 yr olds as the biggest oppy for wine, with about 25% more beer and spirits drinkers than wine drinkers in this age group. Emphasizing "fun" may help recruit more folks, he suggested. "Status" may be a big driver for older wine drinkers, Kristin Marchesi at Metis M&A commented, but "dialing back the reverence" to bring a bit more "levity" may be necessary to attract a younger consumer set with different values.Bad Year, But Not for All; Top Performers +8%, Bottom Quartile -10% While overall outlook of SVB survey respondents was negative (especially on the economy, consumer demand and competitive "substitutes"), just 7% of respondents said 2025 was "the most difficult year in our history." But that's up consistently in the last few yrs, with another 44% describing 2025 as either "one of our most challenging years ever" (22%) or just "a disappointing year" (another 22%). Still, 30% of respondents felt positive about their performance.To wit, the top quartile of SVB's premium winery clients grew sales 8% last yr, sporting a gross margin of near 70% and a net margin of 11.4%, Rob showed. The middle 50% declined 1.3% with a gross margin under 60% and negative net margin of -1.5%. And the bottom quartile declined 10.2%, seeing gross margin under 50% and net margin of -18.6% last yr. Summing up views of these different groups, Rob observed that the bottom quartile tend "to talk about the problems" and "have more of an inward view." But those outperforming "have an outward view" and focus on investments needed to "change our pattern for a new consumer."

Wine Won't Flatten Out 'Til 2027-2028, SVB Expects; "No Bright Spots"; Winning Wineries Look Outward

Publishing Info