Ah, it was a heady wine time while it lasted. Wine enjoyed more than 50 years of vineyard and winery growth, more than 50 years of improving quality, more than 50 years of consistent year-over-year market expansion. Those were the days, my friend. We thought they’d never end. We’d sing and dance forever and a day.
Reality: nothing lasts forever. Pendulums swing both ways, as the wine world is painfully coming to grips with now.
In 2024, California wine production fell to its lowest level since 1999. United States production fell to its lowest since 2004. Both total wine consumption and per-capita demand in the U.S. fell together for the first time in modern wine history. Worldwide wine production is down to 1961 levels even though there are more than five billion more people on Earth today.
On a granular level, winegrowers leave grapes on the vine, knowing they cannot recoup their harvest expenses. Wine stores close. Wineries close or dial back, drop labels, trim staff. Newspapers drop wine columns as wine advertising dollars dry up. Restaurants pare their wine list. Supermarkets reduce shelf space devoted to wine.
Let’s examine what is happening and put it into some perspective. Spoiler alert: the sky is not falling, Chicken Little.
Wine drinkers fall loosely into two categories. Members of the largest cohort are not that interested in where the wine came from, how it was made, who made it. They want a relatively inexpensive alcohol delivery vehicle that tastes good, maybe pairs with food. They enjoy wine, but they also can hang with beer, hard seltzer, premixed cocktails. They also may have cut back or eliminated alcohol consumption.
The second cohort is into wine. Members of that cohort care about all the details, food pairing, vintage conditions, particulars about how it was made. They can be labeled as “wine geeks.” Wine is their go-to alcoholic drink, and they are willing to search for quality and pay for it.
The first cohort is the principal source of the wine decline. They are the reason the hardest hit wine segment is commodity value bottlings, aka “supermarket wines.”
The wine lover cohort has much less impact on the decline. In fact, while sales of lower-end wine has significantly tumbled for the past seven years, sales of higher end wines have weathered the storm. Wineries are selling fewer bottles of wine but maintaining their cash flow because people are buying higher-priced efforts. Those drinkers are drinking better, a trend that is more than a decade old.
The commodity, supermarket wine segment has a hard row to hoe. There are too many “next big things” in that alcohol silo. The market will remain, but will not be as robust as it was the past half century. And, of course, the cohorts are not black and white, but have shades of gray between them.
The better wine cohort has an emotional connection to wine. For them, wine is joy, pleasure, deliciousness, and rewarding, with fascinating back stories. And—yes—some snob appeal that quality wine is not pop-the-top and slurp-it-down to get-a-buzz stuff. For them, wine’s cementing attraction is pleasure. On the palate, in the mind, and—yes—pleasant satisfaction that you are smart enough, educated enough, and successful enough to enjoy and appreciate a liquid that has been treasured by fellow human beings for more than 8,000 years. There is conclusive evidence of a winery in Armenia dating back 6,200-plus years, including botanical evidence the wine was made using the areni grape. You can buy Armenian wine made with areni grapes today from a winery near the archeologic find in Armenia. Not many enterprises can match that claim.
Bottom line: while this is a somewhat turbulent time in the wine business, especially in the cheaper, factory-produced wine segment, wine is not going away. Worldwide wine production may be down to 1961 levels, but it remains a half-trillion dollar business. Production is almost six billion gallons—30 billion bottles. In the United States, wine generates more than $325 billion in economic impact. Various research groups forecast wine’s worldwide economic impact will be between eight hundred billion and more than one trillion US dollars by 2033. The wine world is changing, but it is not going away.
Sure, the wine trade faces headwinds. Every product, especially a discretionary product like wine, faces headwinds on a cyclical basis. Sometimes you are the hammer and you strike. Sometimes you are the anvil and you bear. The likelihood is after testing times the strong will survive and flourish, while the weak will suffer their Darwinian fate. Wine has been here before—my goodness for 13 years in the United States you could go to prison for making and selling wine. Let’s all take a deep breath, relax, and figure out what wine we are going to joyfully enjoy together tonight.
Tasting notes:
• Karas Areni, Armenia 2023 checks an amazing number of boxes in the wine world. First, it is a delicious wine that sips in a space between pinot noir and sangiovese. Second, archeological finds discovered evidence of this very grape dating back 6,100 years and the first clearly identified winery in the world. The winery is in the shadow of Mount Ararat, believed by Christians and Jews as the possible location of Noah’s Ark. You get to drink history, the very beginnings of wine, and drink superb wine. And do so for $16-20. Link to my review
• Val delle Rose Litorale Vermentino Maremma Toscana DOC 2024 is delightful iteration of vermentino’s lighter, fresher style. While it has good acidity, there is a smooth creamy texture and slight oiliness that creates excellent mouthfeel and tension. Clean, crisp winner from a highly regarded, long-time player in Tuscany. $15-20 Link to my review
• Herzog Wine Cellars Lineage Pinot Noir, Clarksburg 2022 is affordable, fruit-forward, kosher wine from America’s largest fully kosher winery. It is a value play in pinot noir rather than sophisticated, but is very serviceable in what it is intended to be. Wallet pleaser; smooth and easy crowd pleaser. $18-22 Link to my review
• Stoller Family Estate Reserve Pinot Noir, Dundee Hills 2022 is rich, elegant charmer with lingering finish, polished, refined fruit. Excellent balance of fruit, oak, restrained alcohol. Civilized pour that demonstrates why Willamette Valley pinot noir deserves to be in conversation as some of the world’s premier pinots, especially at this price point. $50-60 Link to my review
• Early Mountain Vineyards RISE, Virginia 2021 is a very smooth, well-behaved, merlot-led Bordeaux blend only produced in exceptional years. Just now entering its best drinking window, this easily can be held another decade-plus. Early Mountain is Virginia’s flagship winery. All winery profits are directed to Virginia communities and innovation in the Virginia wine industry. $135-150 Link to my review
Last round: How do I determine how much wine to drink? I take it on a case-by-case basis.