Demand for fine imported wine is fizzing in the United States, supported by the strong dollar and thirst for authenticity, as post-boomer generations turn to more complex, authentic wines for new tasting experiences. Sales of premium wine are forecast to rise 9-13% in the US this year, according to the “State of the Wine Industry 2016” report by Rob McMillan, Evp and founder of the Silicon valley bank (Svb) wine division. Italian wine is growing in the Us, with exports up 19.7% to 1.409 billion euros in the first 11 months of 2015 from the previous year, according to the latest available data by the Us Department of Commerce elaborated by the Italian Trade Agency-Ice in New York.
OPPORTUNITIES FROM THE MILLENNIALS – An estimated 70 million millennials aged 21-38 live in the Us, and 44 million are from the Generation X (39-50 years old), according to Us Census Bureau data cited by the Wine Market Council. Their combined number is much higher than boomers (77 million). “Unlike their parents, millenials are eager to discover new varietals, new blends, similarly to what they have done with craft beers” said Bill Earle, president of the National association of beverage importers (Nabi). Generation Xers are expected to surpass baby boomers around the year 2021 to become the largest fine wine consumers in the U.S, according to the Svb’s report. Five years later, by 2026, the millennials are forecast to take the lead.
RENAISSANCE FOR RED WINES – Boomers have a bigger purchasing power than millennials, who are indeed discovering wines but have a lower income and enjoy beers as well. As a result, McMillan’s report predicts per capital wine consumption in the Us in 2016 to drop for the first time in 20 years. Interestingly, a trend influenced by millennials is the revival of red blends, which is coming on the back of the big success of sparkling whites like Prosecco. Red wine priced between 8-11 dollars a bottle is very popular among new drinkers. Of the major varietals, chardonnay, cabernet sauvignon, and sauvignon blanc are growing the most in the 11-15 dollar-price category.
SELLING DIRECTLY TO CONSUMERS – US on premise sales (i.e. restaurants) are expected to remain flat in 2016 as diners look for alternative channels, the Svb’s report shows. Since premium Italian wine is mostly consumed at high-end restaurants, producers and marketers will have to think of new locations, from clubs to tasting rooms. On the bright side, off premise sales (wine shops, grocery stores) are growing double digit. Despite restrictions still existing in several US states, direct-to-consumer sales (including online) are rising.
