Current opinions and trends in the US wine market

The wine industry is having a hard time at the moment, what with: Geopolitics, trade wars and Gen Z. After all, according to Gallup Polls (Alcohol consumption increasingly viewed as unhealthy in U.S.): 59 % of 18–34 year-olds admit to drinking alcohol (decreasing continually this century), but 69 % of 35–54 yo (keeping steady), and 58 % of 55> yo. It might thus be time in this blog to stand back a bit, and look at the actual wine drinkers themselves.

Wine lovers are not part of an elite. Not every car driver needs to own a Rolls Royce or a Lamborghini, and not every resident needs to inhabit a roof-top apartment or a cliff-top mansion. Similarly, not every wine-drinker needs to consume an exclusive vintage. These are all status symbols for the rich.

Too much of the wine literature focuses on “the best” (intended for “true wine lovers”), not simply the above-average (The price of exclusivity: how wine lost its everyday appeal). Wine is often made into the star, a thing that people need to revere (“wine speaks to us”), rather than being created simply for pleasure. So, wine is not an elitist pursuit (not status), nor is it an unhealthy one – in both cases provided it is conducted in moderation.

Good wines are not inaccessible to my peers, provided we know where to look for them. The returns will re-pay even a small amount of effort. All we need is that the bottle contents should match the price, and choosing the latter thus chooses the former — the younger people need to be told this, and especially this. Even cheap wine can be interesting, depending on its origin; however, quality does cost money, and must be paid for.

So, now seems like a good time to look at some market trends in the United States wine industry. In the past, consumers have traditionally gone through their 20s into their 30s, and then they have naturally transitioned to wine — this doesn’t seem to be happening now. Mind you, it is repeatedly said that the modern trend is to drink less but drink better.

That said, we could start with the change in average bottle price 2013–2024, as shown above (from: Sovos ShipCompliant and WineBusiness Analytics 2025):

In 2024, the average price per bottled shipped increased by 6% to a record $51.20. The continued slowdown in the rate of price increases, which declined from 7% in 2023, 9% in 2022 and 12% in 2021, reflects a broader easing of inflation. However, this increase remains well above the pre-pandemic average annual change — we are told that this is preferentially because the volume of sales of cheaper wines is now declining, rather than the more expensive wines are increasing (2024 Beverage Alcohol Year in Review).

That said, we can also look at the sales growth of premium wineries 2000–2024, as shown above (from: Silicon Valley Bank State of the US Wine Industry Report 2025). This shows a distinct downwards trend, indicating that even the expensive wines are selling much worse, through time. There have been, however, two distinct dips and one peak.

What we have is an obvious set of evolving social norms (What if we didn't turn into our parents?), and a growing focus on health and wellness, rather than on the fanciness of the wine itself. We can see this by looking at various parts of this report: Colangelo Partners U.S. Wine Market Trends and Challenges. I will do this now.

We can start by looking at what people think about wine’s effect on their health and well-being, for the different age groups, as shown above. Wine is seen to have a notable effect for all groups, but it is the oldies (my group!) who detect the biggest effect, especially on their well-being.

Looking in more detail, we can see what these effects are thought to be, as shown above, for the three groups. Apparently wine is not really part of a healthy diet, although it has been historically important, and it does go with food (wine is always best consumed with food, otherwise you risk becoming an alcoholic). The older people are apparently much more amenable to wine consumption.

In terms of actions, the younger people do express their intent to participate in Dry January, and have done so in the past, as shown above. The older groups are much less keen (and I would definitely fit into my oldest age group). By comparison, apparently 55% of a survey of French consumers declared a willingness to abstain from alcohol in January, but ultimately only 18% declared that they had succeeded (The growth of NOLO in France). There are, of course, good reasons for not drying out your January (Yes, you can drink without guilt).

More seriously, some people have taken the recent WHO guidelines earnestly, as shown above, especially among the younger people. We older people, of course, do not (Harvard researchers and leading statistician stand up to the WHO), and things are not so simple (The complex case of moderate drinking). However, as Louis Pasteur famously noted: “Wine is the most healthful and most hygienic of beverages.”

Finally, it is worth noting other risky behavior apparently carried out, for the various age groups, as shown in the table above. It seems to me, given this, that wine is the least of their likely health problems. Eating junk food cannot be good for you; and coming from Australia, as I do, we know to put on sunscreen, or at least wear a hat (the sun is a bigger cancer risk than either red or white wine: Red vs. white wine: New study finds little difference in overall cancer risk).

Anyway, that is what some of the opinions in the wine market in the USA look like just now. Interest in wine is declining (Wine sales slipping in US as more Americans leave alcohol behind); and at the entry level, quality wines are disappearing (The cost of premiumisation). Younger people have also been starting to look more closely at ready-to-drink (RTD) concoctions based on wine (The wine-based RTDs we are too embarrassed to talk about).

We have also apparently been failing to communicate that we enjoy wine (Rediscovering the fun in wine), except perhaps through the non-educators on TikTok or Instagram (The role of wine influencers). Instead of Dry January, we have Come Over October and Share & Pair Sundays. Or, as the French campaign of 1933 noted: “Drink wine, live joyfully”. Moreover: Wine industry leaders look on the bright side; and indeed the 2024 California Grape Crush Report shows the lightest crop in 20 years, which will help address the current over-supply of U.S. wine.

Given all of this, we have apparently been making too much wine for quite some time, but we have only recently woken up to this idea (The 2025 wine industry wake-up call). We need to either reduce vineyard area or create wine demand (eg. Young adults find restaurant wine lists uninspiring). Not only do younger people tend to drink less than older ones, they lean toward lighter wines, they buy less for status and more for taste, and they are more open to new products (Year of the Snake bites for China wine).

We could perhaps take a hint from the Champagne houses, which have focused on making and offering products that their target consumers will enjoy and want to buy again, rather than trying to educate consumers about wine as a complicated accompaniment to food (Robert Joseph). That is, we need to see the importance of embracing curiosity and telling the story of wine (Alecia Moore: Pink). We also need to refocus from the concept of physical health to one of emotional wellness — from wine we get flavor, enjoyment, culture (With its health halo dimmed, wine needs new ways to win over drinkers). Hint: make consumers smile and they are more likely to engage with your brand (Tim Akin). All of these points were emphasized and amplified at the recent Unified Wine and Grape Symposium (Stressed and worried, young people need wine).

So, as a finish, this might also be “an opportune time to talk to buyers and experts about what they think wine, and wine enjoyment, might look like in the next 50 years” (The future of wine: what might the next 50 years have in store?). Presumably, given the interest shown above in diets, one of the most obvious innovations will be ingredient and nutrition labels for wine, as in the European Union (Notes of...fish bladder?!) and increasingly in the USA (Wineries promote transparency by adding ingredients lists). More seriously, some countries either already have cancer warnings or are considering them (Should Australia mandate cancer warnings for alcoholic drinks?).

Why does the world have Three-Tier systems for alcohol supply?

The United States of America has a Three-Tier alcohol distribution system, so that each commercial bottle of wine has a producer, a distributor and a retailer; and I cannot see why it is compulsory to have the distributor. Why can’t the producer sell directly to the retailer (or even the consumer), and thus save the consumer a lot of money? It seems to me that the distributor is not absolutely necessary, except to make money.

Now Sweden, where I live, also has a Three-tier system, but people in the USA usually describe it, disparagingly, as having a “government-owned retail monopoly”. Here, there is a freedom of choice for the producer and an importer / distributor, but not for the retailer — the latter is a national chain called Systembolaget, which is wholly owned by, and operated on behalf of, the Swedish government. However, the producer cannot sell directly to the retailer, any more than they can in the USA. So, the two systems are pretty much the same, in practice.

The US system is thus worth looking at here, from the perspective of its similarity to Sweden, and the European Union in general.

Now Sweden (and the rest of Scandinavia) and the USA actually created their Three-tier systems for effectively the same reason. Most of the US states (Three-tier system):

chose to become alcoholic beverage control jurisdictions after Prohibition. In these states, part or all of the distribution tier, and sometimes also the retailing tier, are operated by the state government itself (or by contractors operating under its authority) rather than by independent private entities.

By contrast, in Scandinavia the national governments took control of the retail Tier, on the claimed basis of public health with respect to the previous cultural tradition of binge drinking (Why are there wine monopolies in Scandinavia?). So, the influence of the Temperance world was at the root in both cases.

This does not mean that there is much wrong with wine availability in Sweden, almost all of which has to be imported (because of climate constraints), and where there is thus an importer by default. I have noted before that Sweden has a good wine selection (Wine monopolies, and the availability of wine), and that Systembolaget operates without profit motive, so that the wine is relatively cheap (Why is wine often cheaper in Sweden than elsewhere?).

Mind you, beer is freely available in the supermarkets, but not wine or spirits (Sweden is not actually restricted to a government alcohol retail monopoly). In the USA, by contrast, there are apparently 10 states that ban wine sales in supermarkets and 3 that ban beer (Maryland lawmakers clash over lifting ban on beer and wine sales in grocery stores).

It is also worth pointing out that, between countries within the European Union, receiving alcoholic drinks by mail or courier from online shops is perfectly legal (Eurosender). So, I can bypass Systembolaget when I want to, and I have occasionally done so. On the other hand, me sending alcohol as a private individual is another matter, which can depend on the circumstances.

Now, as I have hinted above, I cannot understand the US Three-Tier System for alcohol, as I cannot believe that Americans see this system as free trade. It clearly favours large retailers over smaller ones, as they get bulk discounts; and it also favours large wholesalers / distributors. The only exception to this, called Direct to Consumer, apparently accounts for less than 5% of sales by dollar, and almost all of these sales are for domestic wine (see also: DtC wine shipping in 2024: a year-in-review). [Note: Sweden is allowing farm sales of alcohol from June 1. Hurray!]

In the case of US wholesalers, there has been a major consolidation over recent decades. It has been noted (America’s incredible shrinking wholesale landscape):

The current wholesaler landscape is far different than it was 25 years ago. In 1995, at the beginning of the US wine boom, there were about 1,800 U.S. wineries and some 3,000 wholesalers. In 2023, there were almost 12,000 wineries and only about 1,000 wholesalers. That translates to staggering market share numbers, according to the annual Impact Databank report (which includes spirit sales, but doesn’t include beer): No. 1 Southern Glazer’s and No. 2 RNDC with a projected 53% of the market in 2024, and the top 10 companies with a projected 81.5%. That compares to some 72% for the top 10 in 2017.

This situation has all sorts of consequences. For example in politics (Follow the money: alcohol campaign contributions the last election cycle):

Wine, beer, and spirit wholesalers contributed over $17,000,000 to state-level candidates and causes in 2023 and 2024. This is more than double the entire rest of the alcohol industry combined. The explanation for why alcohol wholesalers contributed far and away more than the rest of the industry is explained by the fact that wholesalers, supported and protected by the three-tier system, have the most to lose through reform. The entire goal of wholesaler giving is to block any and all reforms to the three-tier system, and keep the alcohol flowing almost exclusively (and by legal mandate) through the wholesalers in each state.

There is also the problem of staff concentration (Giant US distributor sheds staff):

The news that Southern-Glazers (SGWS), the biggest wine distributor in the US, with a market share of over 50%, has laid off around 3,000 of its staff, including a large proportion of its fine wine and craft division, has sent shock waves through the US wine industry.

Clearly, consolidation can ultimately cause the actual market to shrink, as well, because of decreasing customer choice (Adapt or fade: the critical turning point for wholesalers).

Moving on to retail, non-Swedes sometimes rant about the fact that Sweden has a single government—mandated national alcohol retailer. But Swedes clearly get a better deal than the American system of two large wholesalers controlling nearly 50% of the alcohol market, because Systembolaget acts as both a large and a specialist retailer, simultaneously, since it does not act out of any form of profit motive (as described above).

In the US case, we would expect the wholesalers to rely, for volume sales, on a handful of big supermarket chains and a very few other big retailers. In particular, we would expect that the wholesalers would extend significant discounts to those gigantic chain retailers that buy large volumes of wines, beers and spirits. Indeed, the existence of this situation has recently been tackled by the US Federal Trade Commission, which is claiming in a lawsuit that this violates the Robinson Patman Act of 1936 (The Fed's lawsuit against wine wholesalers can’t fix the problem). With a legal outcome either way, it has been pointed out that You’re about to hear more about the evils of big alcohol, because alcohol harms are primarily a consequence of the alcohol industry pursuing profit.

We would also expect some sort of alignment between the biggest wholesalers and the biggest wine brands. In this case, it has been reported that the US wine market is clogged with thousands of brands that are proving hard to sell (US distributors awash with wine).

Finally, there is this business of on-line sales. Apparently, we need to understand Why Gen Z isn’t buying wine online. Clearly, these people are the future of US retailing, and the Three-tier distribution system is showing its limitations. The younger people apparently prefer strategic influencer partnerships and precision–targeted marketing (Investing in social influence: 44% of Millennials and 52% of Gen Z were influenced by social media when it came to wine purchasing). This may represent a paradigm shift, particularly with Gen Z and Millennials gravitating towards non-alcoholic drinks.

Finally, I cannot believe that US states still differ in whether Americans can buy from within other states than their own. [Note: Canada apparently has the same issue between some provinces.] As I noted above, I can buy from anywhere in the European Union, equally, which is between countries (the so-called Schengen zone). The European Union apparently is more united than the United States! So, it is good to see that just released was the: First-ever white paper on interstate wine retailer shipping.

As far as wholesale is concerned in the USA, Southern Glazer’s operates in only 45 states plus DC, while both RNDC and Breakthru Beverage operate in only 34 states plus DC (these are the top three companies by dollar). To a European this seems rather limited. Furthermore, there are still states that continue to block DtC shipping of wine (Where DtC wine shipping is still limited in 2025).

I should end by noting that the US is not necessarily alone in its behaviour. For example (Devil’s Advocate):

If you want to sell in the UK, there’s a limited number of importers, agents and wholesalers who rely, for volume sales, on a handful of big supermarket chains and a very few other big retailers.

Ethics in the wine industry, once more

Last year I wrote a blog post about The ethics of presenting the wine industry. Recently, another example has arisen that reflects a similar issue, which I will write about here.

Ethics in the wine industry is an ongoing topic — it usually involves questioning the (lack of?) ethics of some (many?) people in the industry. I have not written much about wine-industry ethics in this blog. This is not from a lack of interest in the topic, but for lack of anything much to say that might be a bit different from any other wine blogger.

However, in the previous post, I wrote about my experience seeing some of the vineyards in South Africa, notably the fact that those around Cape Town are right next to an enormous shanty town called Khayelitsha. I wrote:

The massive shanty town (as an Australian would call it) south-east of Cape Town was a great shock to my bus-load of middle-class Swedish tourists. The contrast with the Kruger National Park (lions, elephants, giraffes, buffalo, etc), and the lower-middle-class servers in the tourist industry, was stark. Everyone on the bus noticed, and everyone expressed concern.

One cannot miss the contrast, when you are there. However, you don’t see it in any of the wine-industry photos.

Recently, an article appeared in the Swedish media: Hot och slavlöner bakom viner sålda i Sverige. This translates as: Threats and slave wages behind wines sold in Sweden. It is based on a report from Swedwatch, a group that investigates the products sold commercially in Sweden, and the social circumstances under which those products are produced.

In this case, the object of their scrutiny is the Swedish national retail-alcohol chain, Systembolaget, insisting that they step up their sustainability efforts in the supply chain. The report concerns serious workers’ rights abuses on South African farms, linked to wines eventually sold at Systembolaget (and elsewhere, in other countries). They consequently “urge Systembolaget to better use its leverage as a large public retailer to drive meaningful change, including by implementing stricter and results-based human rights and environmental due diligence tailored for high-risk locations.”

The important point I wish to make here is much more general than this. Swedwatch target a single retail chain, but it is clear that the same claims can be made about all retailers of South African wine, everywhere. So, there are international implications for the Swedwatch investigation, which everyone in the wine industry should take onboard.

Swedwatch provide a full English-language summary of their report. However, their Key Research Findings are:

• Those interviewed reported working an average of nine hours per day, five days a week, earning R4,576 (around €223) a month — insufficient to adequately support their families.
• Various housing problems including leaking roofs (which may contain asbestos), broken electrical plugs, and limited access to drinking water and leaking toilets and taps that cause flooding.
• Discrimination against union members, for example by employers only granting permission to a leave or giving other benefits to non-union members.
• Exposure to hazardous pesticides without proper safety measures. Chemical compounds identified by the workers include Paraquat, which is banned in the EU and classified as harmful to the environment and health.

Swedwatch conclude that:

The testimonies show that the measures Systembolaget has taken so far to fulfill its obligations according to international guidelines have been insufficient. The organization also criticizes the lack of transparency in the supply chain. Systembolaget has read the report, and they claim to be aware of the problems depicted, and state that they are continuously working on the issues.

As noted above, Swedwatch target a single retail chain, but it is clear that the same claims can be made about all retailers of South African wine, worldwide, and they can all thus be asked to answer. This is, after all, an essential component of ethics in the wine industry. So, it would be interesting to know whether retailers in other countries are also willing to take onboard the issues highlighted.

The demise of the (old) wine industry?

Normally, in this blog I investigate and discuss some sort of wine-industry data; but this week’s post is more in the nature of an opinion piece. Please bear with me.

Things like global climate change (the negative effects of which substantially outweigh the positives), biodynamic agriculture, regenerative viticulture, sustainable winemaking, and worldwide over-supply are all undoubtedly big issues in the wine industry, and they rightly occupy a large amount of space in the wine-industry media. However, there is one issue that far exceeds all others — not many people want to drink wine any more. These other issues cannot be addressed properly until the latter one is addressed first; and so I will discuss it here.

The above graph shows recent world wine consumption (mhl) since 2007, as released by the International Organisation of Vine and Wine (OIV). It is not a pretty sight.

There seem to be two issues that combine to create this disaster:

• declining consumption of alcohol among younger drinkers
• declining consumption of wine relative to other forms of alcohol, especially cheaper wines.

The first of these issues is obviously important in the long term (eg. it is estimated that 30% of Gen Z drink no alcohol at all), but it is the second issue that I will discuss here.

One of the basic consequences of this issue is, of course, that global wine production always exceeds consumption, as I have written about before:

When will world wine consumption finally catch up with production?
Why does world wine production always exceed consumption?

In response to this ongoing problem with the once-vibrant global wine industry, there have been many comments and suggestions. For example, Rob McMillan (in the Silicon Valley Bank State of the Wine Industry Report) focuses on two solutions:

Industry members either have to “work together to create a resonant message that positively influences consumption”, or “use whatever means we have to increase efficiency in production, grape growing, and marketing”.

However, neither of these is actually a solution, as neither deals with the fact that production > consumption. As Albert Einstein famously noted: “We can't solve problems by using the same kind of thinking we used when we created them.” Using the same thinking, we would respond to over-supply by product discounting and price reductions, and by converting vineyards to other crops. This is short-term thinking, often following the current fashion (eg. Pink won’t save California wine). At worst, it is simply competing against each other, as “we all fish for the same consumers in the same pond” (7 ways to steal market share without lowering your price).

On the other hand, it seems to me that the fundamental problem is the wine industry itself, not the members of that industry. So, the members cannot resolve the problem, without a fundamental re-thinking of what that industry actually is. The industry has a customer problem — the current industry attitude seems to be: “we make this, and you should buy it”, whereas it needs to be: “you want this, and so we had better provide it”. That is, we must, as they say, change or die.

By this, I mean that so much of the current wine industry, as part of our culture, is exclusionary, rather than embracing. For example:

1. wine vocabulary is often exclusionary — its taxonomies and labeling confuse people, in its perceived need to “wax poetic” when describing wine sensations (discussed in Different wine talk)
2. the concept of wine tasting is exclusionary, because people need to be educated in order to appreciate wine, as well as needing to know about grape varieties and wine regions, for example (see Need to know)
3. we also have follow-on exclusionary practices, such as the Certified Wine Educator credential (see The insider’s guide to the CWE exam)
4. the price of good wine is often exclusionary, although there is definitely plenty of cheap stuff available (if you like that sort of thing)
   
5. also wine tourism is often financially exclusionary — eg. we charge large amounts for winery tastings (they were free in my day, which was the 1970s and 1980s) (see Sharing the dream: Let’s have a day of low-priced tastings)
   
6. even the labels are exclusionary, because most jurisdictions do not require an ingredients list on labels, unlike almost all other foods (although this is slowly changing).

This cannot go on. As recently noted by Rodolphe Lameyse (We need to reposition wine in a different way): “I think wine can’t go on being a product that lives by itself.” In particular, we need to explicitly take into account The digital habits of different generations — Gen X’s approach, Millennials’ money, and Gen Z on social media. These people are the customers, and we need to meet them on their terms, not ours.

As recently noted (Wine industry grapples with being something only Boomers like, as younger consumers have ‘mindshare of wine half that of their elders’):

The bigger problem is the wine-drinking consumer. Some 58% of consumers over the age of 65 — essentially, the Baby Boomer generation — prefer wine to other alcoholic beverages. All other demographics are nearly 30 points lower. Even worse for vineyards is that younger consumers aren’t as interested in wine. We must show the will to change and the creativity to evolve and adopt a new approach that retains current customers while appealing to a more diverse population.

 

In this regard, the single most sensible article about the wine industry that I have read in years appeared recently, from Jessica Broadbent:

Why branding could be behind falling wine consumption

I will go so far as to say that “could be” in that title can be changed to “is” — it just seems to be that obvious, to me. I was going to quote parts of the article, but I then realized that I would end up quoting almost all of it; so do yourself a favor and read it all for yourself.

The bottom line with the concept of branding is that a particular product is tailored for, and marketed to, a particular group of people. Provided that the product is manufactured in an acceptable manner (sustainable, biodynamic, etc), then all of the esoteric details referred to above are optional — the customer does not necessarily know them, and does not need to, unless they choose to. Put simply, no-one is excluded in any way, but they are embraced instead. If there are enough customers for the product, then it is sustainable, long-term.

Moreover, as also noted by Rodolphe Lameyse: “Some [vineyards] will no longer make wine but will produce grapes to the specifications set by others who will supply markets under perhaps generic brands.” In other words, the grapes may not only come from one huge generic region (like most bag-in-box wines do), they could come from multiple regions, and perhaps even different regions in different years. It is the brand that is important, not the region or the grape.

So, what grape varieties are involved, and where they come from, is pretty much irrelevant, in the big scheme of things. They could even change from year to year, and still be branded the same way. This idea is horrific to much of the current wine industry, especially in Europe, and also much of the USA; but the way things are going many of them won’t be there much longer, to feel that way. This saddens me, for sure, but a failure to change would sadden me even more. Stop looking in the mirror, and start looking at your (potential) customers, instead.

Einstein on the beach, by Oslo Davis.

This is how Australians market wine (you may be surprised)

Greetings of the season:
God jul! Merry Christmas. Joyeux noël. Fröhe Weihnachten. Feliz Navidad. Buon Natale!

Each country has its own way of marketing wine to its populace. That is, there are commercial, cultural and legal arrangements that facilitate and encourage the transfer of wine from the producers to the customers. These arrangements can differ greatly between countries.

Here, I will look briefly at how the Australians appear to do it, within Australia itself.

The main arrangement is via wine brands, of course. That is, wine is aggregated into volumes that are then marketed under a single name, or label. This is the most common arrangement around the world. The wine producers sometimes create the brands themselves, and thus sell the wine direct to the customers, or they sell the wine to intermediaries, called retailers, who then sell the wine to the consumers.

However, one aspect of the Australian system does seem to differ quite considerably from many other countries. How many of these wine brands are owned by huge conglomerations? That is, there are many wine brands on the retail shelves, but not quite so many companies standing behind those brands.

The web site that contains the most detailed summary of this situation for Australia is: Who makes my wine? It was put online by The Real Review back in February 2018, and was most recently updated in December 2023. This lists which companies dominate wine retailing in Australia, and for which the ownership of their brands is often not publicly disclosed. The Real Review data are summarized below.

There are, of course, wine conglomerates in Australia, who have simply purchased other wine companies. This is widespread throughout the world, as discussed at: The 10 largest wine companies in the world. The biggest of these conglomerates in Australia are shown in this first table. The largest of these, Treasury Wine Estates, is only the fifth largest wine company globally, so there is nothing particularly out of line here.

However, it addition, within Australia there are supermarket conglomerates who are (mostly) inventing wine brands out of thin air. The biggest three collections of these are shown in the second table. Note the massive number of brands (aka “bulk-shipped retailer own-labels”), compared to the first table.

Also, note that the Endeavour Group (formerly called Woolworths supermarkets) actually owns a whole series of acquired “independent” liquor retail outlets, including: Dan Murphy’s, BWS, Langton’s, Cellarmasters, Pinnacle Drinks, Jimmy Brings, and Shorty’s Liquor — these retailers may look different on the outside, but they are all pretty much the same in terms of content,

So, four times as many brands are marketed in Australia by large supermarkets than are marketed by large wine companies. Indeed, back in 2016, Tyson Stelzer (Who makes my wine?) noted that:

The growth in supermarket “Buyer’s Own Brand” wines in Australia has been substantial, estimated to have mushroomed from five percent a decade ago to between 16 and 25 percent of the market today.

Do any other countries market wine in this manner? We are told that US-style marketing is being adopted elsewhere (French winemakers adopt US-style marketing to halt falling sales), and this consists of: “In Anglo-Saxon countries, they ask what the consumer wants first.” However, trying to market the Australian supermarket wines elsewhere is not a viable proposition (Australian wine is in crisis — here’s why).

Mind you, the increase in size of the Australian wine conglomerations is likely to continue for the foreseeable future, as it also will for the other world mega-companies (Consolidation moves):

Consolidation is nothing new for the wine industry, but the pace of change has accelerated in recent years as interest rates have risen, costs of labor and supplies have jumped, and demand for wine has softened.

Treasury Wine Estates, for example, is buying a substantial vineyard area in New Zealand (Treasury’s New Zealand vineyard expansion); and it has recently made United States acquisitions (The 10 most important M&A deals in drinks in 2023) — these are intended to “strengthen its global portfolio”.

Note:
The Real Review site listed above is a large update of the original Who makes my wine? site (pictured here). It first appeared in the Wayback Machine on November 28, 2010. It listed “100 or so” wines for Coles and Woolworths supermarkets. It was archived last on October 4, 2015, but was gone from the web by January 10, 2016. The domain was later resurrected, and it was first archived by the Wayback Machine on February 26, 2021. I last accessed it in December 2023, when 81 brands were listed. For each wine, it has a pretty good description of the Australian Wine Regions.

The ethics of presenting the wine industry

Ethics in the wine industry is a continual topic, as a quick perusal of any wine industry news-site will show you (eg. Wine Industry Insight). It usually involves questioning the (lack of?) ethics of some (many?) people in the industry (especially with regard to tax compliance!). How big a difference is there between evading the law and breaking it?

I have not written much about wine-industry ethics in this blog. This is not from a lack of interest in the topic, but for lack of anything much to say that might be a bit different from any other wine blogger. However, a couple of events recently have changed that. So, here we go.

First, I was sent an email (thanks John Stallcup) drawing my attention to the blog of Scott Galloway (No Mercy / No Malice), and specifically the post on Firewater. You should check it out, as it is both interesting and very well written. The author does not shy away from ethics, or any other topic.

The second thing is that I finally made it to South Africa (see the photo above). This was fascinating, especially for me as a biologist — the plants and animals are unique, and it was great to see them in situ; and the landscape reminds me very much of my homeland (Australia). Moreover, my wife’s parents long ago worked for Svenskakyrkan (the Church of Sweden) as school teachers for the black children of what was then called Rhodesia. So, South Africa is pretty close to her original homeland, too.

What does this have to do with the wine industry? That is simple, because I have now been to wine-lands on several continents (Australia, North America, Europe, South America); and their contrast with South Africa is, in one particular way, stark.

Vineyards in Australia, for example, are nested among the bushland (as we call it), so that the backdrop is often native eucalypt trees, etc. Vineyards in northern Europe, for example, are spread along romantic rivers with scattered medieval villages. These sorts of things are part of the image that the wine industry tries to promulgate for itself; and by and large it is accurate.

However, it would be just as accurate to note, for example, that the European villages were once the home-land of abject poverty; the Middle Ages were not a time to be a poor serf — servile life was no fun, and death at a young age was rampant. The Plague (or Black Death) was not something that was easy to live through. However, we do not see any of that in the modern world, so that wine tourists can focus on the romance. Focus on enjoyment, and the quality of life, is important.

South Africa, in some ways, is another matter. Sure, there are vineyard regions that are very familiar to me from growing up in Australia, in both look and feel (although the eucalypt trees growing there are not native, but were introduced by Europeans). However, by contrast there are the vineyards around Cape Town. The massive shanty town (as an Australian would call it) south-east of Cape Town was a great shock to my bus-load of middle-class Swedish tourists. The contrast with the Kruger National Park (lions, elephants, giraffes, buffalo, etc), and the lower-middle-class servers in the tourist industry, was stark. Everyone on the bus noticed, and everyone expressed concern. Our guide, on the other hand, kept the same neutral tone as he had throughout the trip, while he explained what the government was doing about it, and planning to do.

These slums (named Khayelitsha) are possibly the third largest in the world (8 cities with the world’s largest slums), with perhaps one million residents. They are not the only slums in South Africa (List of slums in South Africa), but probably a third of Cape Town's 3.7 million residents live in its slums (The tale of two slums in South Africa). As you can imagine, Life in South African shanty towns is not easy.

The point here is that some of the vineyards of Cape Town are right next to this enormous shanty town, as shown in the photo above, and on the Google Map below (Khayelitsha is outlined, and one of the nearby vineyards is named). One cannot miss the contrast, when you are there. However you don’t see it in any of the wine-industry photos (see the second photo above).

For me, the wine industry and vineyards will never be the same again. I can no longer look at a village on the Rhine River, nested among the vineyards, without seeing life as it was in the Middle Ages, when the villages came into being. I ask myself: how ethical is it to only ever show the romance? The ethics of only showing this is one of omission, not commission — no-one is faking anything, but they sure as hell are leaving some things out.

I am also reminded of another much simpler, but equally notable, part of my own recent history. On 7 November 2023 it was 150 years since the Swedish parliament decided to formally allow women to attend the country’s universities, and this was duly noted in my local newspaper here in Uppsala. This historical event was way ahead of what happened in most other countries, which is a very positive aspect that Swedes are proud of. However, we should not ignore the fact that Sweden has some of the oldest universities in the world, with Uppsala University founded way back in 1477 and Lund University in 1666 (although it traces its roots back to 1425). So, which do we focus on — the later 150 years (with women) or the first 400 years (without women)? My argument is that, ethically, we should see both; but it seems to me that the wine industry would probably not do so.

[All of the photos above were taken by Susanne Stenlund.]

The future world of DTC wine selling

Last week, I wrote about The modern (sustainable?) world of wine packaging. Immediately afterwards, three related articles appeared during the week:

• Revino launches groundbreaking end-to-end refillable glass bottle reuse system
• Torres tests reusable packaging
• Could paper bottles be the future of wine and spirit packaging?
  

This was clearly a hot topic, at the time, and continues to be a pointer to the future.

So, this week I thought that I might write about something just as topical: modern ways of selling wine direct to the consumer / customer (DTC). After all, we have been told that in many places DTC is the lifeblood of the wine industry; and it would be in the USA if it sorts out its cross-state wine transportation problems (Wines are no longer free to travel across state lines). We have also been told, by contrast, that a third of legal-drinking-age adults in the USA say they have not consumed alcohol in the past six months (US consumers want to moderate their alcohol consumption), and especially that Young adults in the U.S. are drinking less than in prior decades. So, wine supply and sale is clearly becoming a more tricky business than it has been — as the French Agriculture Minister recently said: the industry needs to “look to the future, think about consumer changes ... and adapt”. So, DTC should be of relevance.

Obviously, the traditional way to buy wine has been to walk into a retail store and grab a suitable bottle from a shelf. However, one common DTC way to bypass this arrangement has been what is called the Wine Club Model (Clubs vs Subs):

This recurring sales model is structured to offer repeat customers a winery-curated selection of wines at a small discount, delivered to their homes monthly or quarterly. Clubs are typically free to join, and the benefits of being a club member include a discount on wines (typically 10–20%), first access to new releases of wines, and invitations to events. Some wineries will have special seating areas or experiences for participants, and members are encouraged to visit the tasting room for complimentary activities.

This model has been common during my adult life (Why are Wine Clubs so popular?), both from producers and from retailers. There are also clubs for supermarket chains, for example, which offer financial discounts each week to their members; and it has also applied to things like newspaper and magazine deliveries to your door.

However, this arrangement apparently does not quite suit modern generations (eg. Millennials and Generation Z), along with many of the other things favored by my (now aging) Baby Boomer generation. The issues seem to be (Clubs vs Subs):

This model is frustratingly rigid. Consumers who grew up with the internet are accustomed to variety, transparency, and immediate access with no strings attached. Moreover, younger consumers don’t want the same wine delivered periodically. They grew up with the internet and know what it is to have options; so, their goal is not to decide on a favorite and stick with it. Instead, they live in a perpetual state of trial.

So, the suggested alternative to the Wine Club is the more general Subscription Model (Clubs vs Subs):

Subscription models are different from Wine Clubs because they place control of the relationship in the customers’ hands. Typically, all interactions are online so that they can be managed anytime and anywhere. Many have apps. The consumer signs up and chooses the frequency and dollar amount. The focus is on new brands and products, typically highlighted with in-the-box extras containing stories about the new items.

Indeed, this seems to have become The Way for the younger generations (eg. urbanites 25-45 years old), half of whom apparently have four or more subscriptions, with various providers. Indeed, subscriptions exist these days in all parts of life, from phone usage to apps to video streaming to food delivery. Therefore, the wine industry is being encouraged to re-consider its approach (Wine clubs vs. subscriptions: which is better?); and advice is now being provided for any of we wine oldies who need to adjust to this somewhat different way of selling (Let’s discuss if it is time to move your Wine Club to a Subscription).

One of the many differences between clubs and subscriptions is that The future of pricing centers on the customers. The old approaches to pricing have been: (i) Product-centric Pricing, which is when the prices are set based on their tight link to the cost of production (plus desired profit), (ii) Value-based Pricing, which is when prices are set based on the value that the products or services create for the customers, and (iii) Demand-based Pricing, where increased demand increases the price. Customer-centric Pricing, on the other hand, is not based on maximizing profits for each individual transaction. Instead, it places priority on building long-term relationships with customers, rather than short-term yield, by doing things such as automatically adjusting prices (downward) whether the loyal customers have asked for it or not.

A wine-industry example of how these issues can be addressed is in the recent announcement about wine retail from a traditional figure (ie. my age!) in the wine industry: Wine critic Jeremy Oliver to launch online platform for wine retail:

Australian wine critic and author, Jeremy Oliver, has developed a new online retail platform for wine tailored to user experience, featuring a website and online store with a recommendation engine, an accompanying app and WeChat store, and a library of Oliver’s tasting notes, articles and videos.

This is clearly a modern approach (see here for more details: Consumers ‘being fed the lie’), which touches all of the bases highlighted above for what younger adults seem to want in their retail experiences. We should therefore all be interested in how this particular wine business (called Oliver’s Wines) gets on.

To finish on a cautionary note, however, subscriptions are very popular in many places, especially on sites like Youtube, where we are constantly being exhorted to “subscribe to this channel”. This doesn’t stop us also having to watch a set of annoying ads during the next video, or listen to the presenter advertise the “sponsors” of their channel. Even an old guy like me can see that the Subscription Model can become very annoying! You also need to keep track of all of those recurring subscription payments, lest you forget to renew one (Here are the best subscription trackers to help you stay on top of recurring payments). Newer alternatives are therefore definitely also worth exploring (People are sick and tired of all their subscriptions).

Wine packaging will change

My wife and I went to do the weekly shopping yesterday morning, and part of the process was to take the recyclable packaging with us to the supermarket. Here, out in the car-park, there are large individual bins for: paper packaging, plastic packaging, newspapers / magazines, clear glass, and colored glass, plus a small container for batteries. Inside the supermarket entrance, there are machines to accept PET drinks bottles and aluminium cans, for which one has paid a deposit, which must be reclaimed (the money will be deducted from the supermarket bill).

For us, Sweden has long had this sort of recycling arrangement, where shopping, which generates packaging, is associated with recycling that packaging. Almost all other products can be taken to specialist recycling centers (called återvinningscentraler), where there are huge industrial-sized skips. There is a skip for clean landfill (soil, concrete, etc), one for metal, one for wood, etc. We also have two curb-side bins per household, to put out fortnightly, one for non-recycling and one for organic matter (ie composting).

Interestingly, the European Union is in the process of wisely adopting roughly this Swedish scheme of recycling. This emphasizes just how important recycling is in the modern world. We should therefore be asking ourselves what the wine industry is doing to take an active part in this particular part of society.

The leading role of the Nordic countries (Sweden, Denmark, Norway, Iceland, Finland) has actually been acknowledged within the wine media. For example (Can the Nordic monopolies turn the drinks world green?): *

Scandinavia’s five alcohol monopolies have launched a joint program to combat climate change.

Across all of these regions, there is a high consumer awareness of environmental issues, and recycling rates are over 90%, rising to 98.2% for the nature loving Norwegians. Finland’s recycling rate has been encouraged by a deposit-refund system (10 cent to 40 cent depending on the size). The return ratios are with cans at 97%, PET-bottles 90% and glass bottles 98%.

Historically, until the late 1990s, the Nordic monopolies had their own refund systems on wine bottles that were then cleaned and refilled. The cheap, low–quality wine they contained, and the packaging model, went out of fashion, but there are now suggestions that it might be revived. According to Maritta Iso-Aho, Alko’s Communications Director: “All means are on the table, and we have discussed the possibility to re-introduce the concept.”  But the the discussions are evidently still only in the very early stages.

Clearly, the major issue here is the wine bottles. There is a high environmental cost to making them in the first place, and also a high cost to recycle and re-make them. The massive temperatures needed for both making and recycling glass bottles mean that they have what is called a Large Carbon Footprint (The problem with wine bottles). Indeed, the glass represents a huge percentage of the wine industry’s global carbon footprint (Assessing the carbon impacts of wine production), and we have long known this (The environmental cost of a bottle of wine).

The re-filling of bottles, as discussed above, is an obvious way forward for the wine industry, although it has rarely been tried. However, the recent London Wine Fair was to focus on sustainability, with bottle reuse scheme and education sessions, as a first data-gathering step. Unfortunately, there seem to be many objections that have been raised, as discussed by Australian Grape & Wine, for example, with regard to proposals by Australian state governments and territories to extend container deposit schemes to include glass wine bottles (We need to change the narrative around container deposit schemes).

In terms of manufacturing, rather than re–using, there are several current ways of moving forward (6 wine trends impacting climate change and consumer taste), including the two most obvious ones:

• Trend #1 — More light–weight wine bottles
• Trend #2 — The growing use of alternative wine containers

The first one, making wine bottles using less glass (ie. lighter weight), is an obvious strategy. For a discussion, see: Lighter wine bottles don’t affect quality and are better for the planet.

For the second one, most people think of bag-in-box and aluminium cans, when considering alternative wine containers to glass, but there are other packagings available. I have reviewed this topic before: How do so-called alternative wine packagings compare? For another discussion, see: Alternative wine packaging: thinking inside the box.

The carbon emissions of all of these various alternatives are compared in this graph, which should make the ultimate environmental situation clear to you.

The main issue for we consumers, of course, is the quality of the wine put into these containers. Sadly, in terms of alternative packaging, there has been considerable discussion about: Is the wine industry ready to utilise alternative packaging?

There seem to be two camps when it comes to alternative packaging in wine. One believes change is not just inevitable, but essential, the other is still firmly of the view “if it ain’t broke ...”.

The former camp argues the wine industry needs to act if it is to be in tune with growing consumer demand to buy products that are sustainable,  environmentally healthy and help cut carbon emissions. Wine brands need to adapt with these concerns in mind.

In the latter camp are those who can’t yet see the reason to change a supply chain, dominated by glass packaging, that has worked well for so long, and is so entrenched in established wine drinkers’ modus operandi.

This is a recurring theme in the alternative packaging movement, that it is the major retailers that hold all the cards and it is up to them to take the plunge to effect change. Andrew Ingham explains: “Wine doesn’t lead, it waits. It waits for the retailers to tell them what they want, and then it responds, It’s such a shame that getting a supermarket listing is the bottleneck to innovation and change”.

This last conclusion seems to me to be very sad, actually. More optimistically, much of the wine industry has already gotten used to screw-caps, so they can probably get used to other things as well.

---

* I have discussed before the seemingly endless American tendency to call the Scandinavian (government-owned) retail stores “monopolies”: Why are there wine monopolies in Scandinavia? A bigger problem, if there is one, seems to be the three-tier system of alcohol distribution and sales in the USA (The American wine media has failed their audience).

Is Artificial Intelligence right for the wine industry yet?

The answer appears to be: Continue to be careful, just at the moment.

Actually, this has been a good fortnight for the media, with regard to Artificial Intelligence (AI), hasn’t it? Several groups of the originators of this form of computing have come out of the shadows, warning all of us about the potential dangers of letting commercial companies develop this sort of computer activity unsupervised. Two good introductory discussions include these:

• ‘The Godfather of A.I.’ leaves Google and warns of danger ahead
• Elon Musk tries to direct AI — again

Way back in 2018, I published this blog post : Artificial intelligence in the wine industry? Not yet, please! Since then (2020), I have asked: Should we worry about Artificial Intelligence in wine writing? In this current blog post, I will return to the overall topic, by writing about some of the potential general problems of AI, just in case the wine industry tries to get too involved without understanding what they are doing (eg. How AI will be a game-changer for the wine industry).

The whole idea of AI is precisely what its name says — trying to develop a computer version of natural intelligence. The idea is that, if our own brain cells can be intelligent, then so can computer circuits. The basic issue is how to actually go about arranging this.

One common approach these days is called “machine learning”. The basic idea here is that we give the computer massive amounts of what we think is information relevant to some topic, then let the computer troll through it all, looking for common patterns. The computer then uses these patterns to produce apparently “intelligent” responses to future situations, by regurgitating what it deems to be the most likely response. Somehow, this is meant to mimic what human beings learn to do as they grow up.

Unfortunately, this is not quite how we do it, as there is a basic contradiction here. AI simply finds a consensus in a massive block of data, which comes from the past; but this does not necessarily say anything about the future. So, one part of the process is talking about changing things for the future, while the other is about automating access to information from the past. Maybe these are connected, and maybe they are not — this is what we are doing when we say: “I will have to think about it.”

Let’s start by looking at a couple of the absurdities that can be produced by this computerized process. My erstwhile correspondent, Bob Henry, once tried asking Bard about me and my blog. Bard is described by its creator, Google, as a “conversational AI model” (“a machine-learning breakthrough”, no less!). The response Bob got from Bard was this:

     David Morrison is an American astronomer, a senior scientist at the Solar System Exploration Research Virtual Institute, at NASA Ames Research Center in Mountain View, California. He is the former director of the Carl Sagan Center for Study of Life in the Universe at the SETI Institute and of the NASA Lunar Science Institute. He is the past Director of Space at NASA Ames. Morrison is credited as a founder of the multi-disciplinary field of astrobiology. Morrison is best known for his work in risk assessment of near Earth objects such as asteroids and comets.
     The Wine Gourd wine blog is a website that provides information about wine, including reviews, recipes, and tips. The blog was created by David Morrison, a wine enthusiast and educator. The Wine Gourd blog covers a wide range of topics related to wine, from the basics of winemaking to more advanced topics such as wine tasting and pairing. The blog also features reviews of wines from around the world, as well as recipes and tips for pairing wine with food.
     The Wine Gourd blog is a valuable resource for anyone interested in learning more about wine. The blog is well-written and informative, and it provides a wealth of information about wine. The Wine Gourd blog is a great place to start if you are new to wine, or if you are looking to learn more about this fascinating beverage.

Clearly, the first paragraph is about someone other than me; and the second paragraph is a load of nonsense. I quite like the third paragraph, though! Still, I would not rely too much on Bard, just at the moment, if I was you.

Another absurd example comes from here in Sweden. A national supermarket chain asked ChatGPT (another AI-powered language model, this time developed by OpenAI) to produce a recipe for an Easter cake. All that ChatGPT did was throw together a lot of the foods associated with Easter, as shown in the picture below. This haphazard cake did not go down well with the customers — it was disparaged as “Egg in green grass”.

Actually, it is often ChatGPT that generates the main discussion of problems, or else other chatbots. There is little point in me going into details in this blog post, so here is a list of reading for you:

• The false promise of ChatGPT
• OpenAI’s new ChatGPT bot: 10 dangerous things it’s capable of
• Why a conversation with Bing’s chatbot left me deeply unsettled
• ChatGPT proves that AI still has a racism problem
• OpenAI’s chatbot spits out biased musings, despite guardrails
• AI can be racist, sexist and creepy; what should we do about it?
• What ChatGPT gets right — and wrong — about Washington wine
  

In addition to all of this stuff about chatbots, there are many other concerns, as well, such as:

• Amazon CEO Andy Jassy says ‘really good’ A.I. models take ‘billions of dollars’ to train
• 14 million jobs worldwide will vanish in the next 5 years, new economic report finds

To counter-balance all of this negativity, there does seem to be enormous potential, if we can only get things right. So, here is another list of reading, for you:

• Google to launch AI-driven ad campaigns
• What is your winery's origin story? How context can elevate ChatGPT!
• VinterActive introduces AI-assisted text messaging for DTC wine marketing
• Gloria Ferrer vineyards a Sonoma County pioneer in using AI to monitor crops
• The driver-optional EV tractor at center of agtech boom right next to Silicon Valley
• ChatGPT makes wine in south of France
• Democratizing wine investment using AI and blockchain for authentication and valuation
• Here are 34 jobs AI could never take — and how much they pay

I conclude that the answer to my title question does appear to be: Not just at the moment, thankyou.

Now, maybe I am just a Grumpy Old Man, bemoaning that the world is changing around me, at a time when I would like to slide into a quiet old age. However, I have lived most of my adult life throughout the Computer Revolution, and so I’ve seen too much unjustified hype before, and I am therefore not so easily fooled any more.

A suitable analogy here is guns and gunpowder (the latter was introduced to Europe from China). These were used to feed us at first; but so-called “bad actors” quickly learned to use them for attacks on humans, instead. This started off small, but gradually increased, with hordes of horseman sometimes streaming in on placid settlers. Then the guns became cannons; and then the powder became part of bombs. Eventually, we developed nuclear weapons — this is a long way from a few single-shot rifles. So, at that stage we backed off pretty quickly, because not every product of the human mind is necessarily in our own best interest, globally. As a young man I was very glad about that, because the alternative future looked pretty bleak to me, back in the 1970s. Furthermore, we can easily detect when someone detonates an atomic bomb, but we currently have no idea what AI is doing behind the scenes.

Anyway, all that Machine Learning does at the moment is take huge amounts of data, and then searches for patterns in it, which it regurgitates upon request (Can today’s AI truly learn on its own? Not likely). There is more to intelligence than this. To me, the success of chatbots simply shows us how many lonely people there are in the world. Chat with your friends, instead; and if you don't have any, then use your own intelligence to learn how to make some, rather than relying on the artificial kind. However, all of this does not mean that AI is not useful, for many tasks.

Fortunately, at least some politicians are apparently listening (White House says it will look at AI regulations, legislation): their basic principles are said to include the need to “evaluate, verify, and validate the safety, security, and efficacy of AI systems.” We shall see!