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U.S. Consumption of Wine is Falling
USAgNet - 01/22/2020

U.S. wine consumption decreased in 2019 for the first time in 25 years, posting a -0.9% volume loss from the year prior, according to preliminary figures provided to Food Dive by IWSR Drinks Market Analysis. FoodDive.com reports that beer volume also slipped 2.3% in 2019, its fourth straight year of declines, led by a 3.6% drop in domestic brews.

There were bright spots in the beer category, with craft beer consumption increasing 4.1%, low- and no-alcohol posting gains of 6.6%, and imported beer rising 3.1%. Overall, U.S. alcohol consumption in 2019 edged higher by 0.3%, reversing a 1.6% drop from the year prior.

Distilled spirits and ready-to-drink products had a strong 2019, with sales rising 2.3% and 49.7%, respectively. IWSR said consumption of RTDs is being driven by hard seltzers, which account for 43% of the category.

The fact that sales in the beer industry have been in a long, gradual decline is no surprise. And 2019 was no exception. Beer volumes dropped 2.3%, the fourth straight annual slide, IWSR noted.

But last year also marked a surprising drop in wine, one of the stalwarts of growth for the alcohol industry in recent years that until now has previously posted more than two straight decades of annual increases. The analytics firm found even though sparkling wine in the U.S. grew last year by almost 4%, it wasn't enough to offset the drop in the larger still wine category (-1.5%), bringing total wine volumes down 0.9%.

Wine represents about 11% of the total beverage alcohol market in the U.S., IWSR says. Similar to beer, however, the drop in wine volume can be associated with what the firm cited as "changing generational habits."

"Millennials are just not embracing wine with open arms compared to previous generations," Brandy Rand, chief operating officer for the Americas at IWSR Drinks Market Analysis, told The Wall Street Journal. "With the rise in low and no-alcohol products and general consumer trends toward health and wellness, wine is in a tough place."

Some alcoholic beverage companies are overhauling their wine portfolios. Constellation Brands announced last year the sale of some of its lower-end wine brands to E. & J. Gallo Winery for $1.1 billion, a much-lower price than the $3 billion initially expected. The fact that the maker of Modelo and Cornona beers sold the products for less could be indicative of the problems wine is facing.

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