Will millennials be the death of overpriced wine or wine altogether?
By W. Blake Gray | Posted Friday, 18-Jan-2019
Crappy chain restaurants. Canned tuna. Home ownership. Now, perhaps $100 wine can be added to the list of things millennials are killing.
Silicon Valley Bank released its annual state of the industry report on Wednesday, and it was gloomy. Overall wine sales in the US are actually down over the last six months – the first such drop in 25 years. Even during the 2008 recession, people kept drinking more wine.
The reason, according to Rob McMillan, executive vice president of Silicon Valley Bank’s wine division, is the inexorable changeover of the main market from boomers, who love expensive wine, to millennials, who do not. For years, we have been writing “do not love expensive wine YET.” But McMillan questions whether they ever will.
“Millennials’ outside age is 38 now, and I expected to see them take on a larger component of wine,” McMillan told Wine-Searcher. “They’re sticking with spirits and beer. Spirits are doing fine. Wine is dropping.”
This puts the US in line with western Europe, where wine sales have been dropping steadily for years, and should send shivers through the wine industry around the world. The US is not only the world’s largest wine market: it has been one of only two bright spots, sales-wise, in the world. Overall wine sales continue to grow in China but the Chinese appetite for expensive wines hasn’t proven to be unlimited. Now the same appears to be true in the US.
Several factors are coming together to form heavy storm clouds over the expensive wine industry, and if you want to pinpoint the storm center on a map –
Napa and Sonoma Counties.
First is a series of negative reports lately about alcohol’s impact on health. The boom in US red wine sales started in the 1990s after a 60 Minutes report on the so-called French paradox – that French people had fewer heart problems than Americans despite a diet of rich foods. Red wine got the credit.
Lately, health news about alcohol is almost exclusively negative, and it has spurred local governments to consider stricter regulations, such as tighter standards for blood-alcohol level while driving.