With little growth forecast for the U.S. market, mergers and acquisitions are being driven by the new realities of the wine business. Direct-to-consumer shipment value fell compared to last year as winery recruiting also slowed and off-premise sales held steady.
The total U.S. wine market value grew 5% in the past year, but much of that can be attributed to inflation and price increases as strong headwinds to sales and consumption gather strength.
Consolidation continues in the three-tier system as a major acquisition shook up the bottom half of this year’s list of the top ten U.S. wine distributors, but new technology and changing consumer demand are resulting in major changes across the wholesale market. Winery direct-to-consumer shipment value rose in November and the total U.S. wine market also grew, but retail sales as tracked by NIQ remained flat.
No other emerging technology is as hyped and vilified as artificial intelligence, which has the potential to bring more transformative disruptions to the wine industry. Winery direct-to-consumer shipment value surged in October while other metrics such as off-premise sales remained flat and the Winejobs Index declined relative to last year.
New competitive challenges and persistent headwinds have marked turbulent, post-pandemic recoveries within the on-premise and off-premise markets. Inflation helped lift the value of the total U.S. wine market in September, as direct-to-consumer shipments, retail sales and winery hiring continued to normalize.
The second largest wine producing state in the United States is poised for what could be a painful transition as the largest winery in Washington reorganizes its business to confront the realities of the post-pandemic wine market. Total winery direct-to-consumer shipment value fell 10% and off-premise sales dipped 1% by value as winery recruiting also continues to normalize.
Low unemployment and changes in the labor pool from the pandemic are making hiring in the wine industry more challenging than in the past. Trends in the labor market are reflected in the Winejobs Index declining 24% compared to July of last year, while winery direct-to-consumer shipments fell 2.5% by value and more than 11% in volume and off-premise sales tracked by NIQ were flat.
As inflation lifts the value of the total U.S. wine market, winery direct-to-consumer shipments, winery recruiting and off-premise sales continue to fall back from the highs of recent years.
Bubbles continue to offer growth potential as well as a way for wineries to diversify their portfolios in line with changes in consumer demand. Total U.S. wine sales grew 11% in the past 12 months as winery direct-to-consumer shipment value declined 1% and winery recruiting continues to normalize.