Welcome in everyone.
Ready to uncork some knowledge about the US wine world.
Oh, absolutely.
Today's deep dive is all about separating hype from reality
in a market that's valued at, get this,
over $107 billion.
Wow.
We're swirling, sniffing, and analyzing the trends
shaping the future of this industry,
all thanks to the 2024 BMO Wine Market Report.
Yeah, this report is fascinating.
It doesn't just tell us what's happening,
but it really dies into the why.
We're talking economics, consumer behavior,
the whole dance between supply and demand.
It's a lot more complex than it might seem at first glance.
Right.
I mean, $107 billion, that's a serious chunk of change.
But the report doesn't just celebrate the wins,
it gets real about the challenges too.
Turns out 2023 wasn't all vineyard sunsets
and celebratory toasts.
Yeah, not quite.
Not quite.
Remove those supply chain disruptions that
seem to impact, well, everything.
Yeah, the wine industry definitely
felt the ripple effects.
On top of that, consumer habits post-pandemic, right?
That threw another curve ball.
We saw a bit of an inventory hangover.
OK, got to admit, inventory hangover
is a term I haven't heard before.
OK.
What exactly does that have?
OK, so imagine this.
Empty shelves during the pandemic.
Yeah.
Everyone's stocking up.
Distributors, consumers, it's the apocalypse.
Turns out, collectively, maybe we overdid it.
So like when I thought I needed a whole case of Cabernet
to get through lockdown.
Exactly.
Yeah, I see where you're going with this.
Right.
And now those overstock sellers, they're impacting the market.
Here's the kicker.
Even though total wine volume dipped in 2023,
the amount of money spent on wine actually went up.
Hold on.
We're spending more but drinking less.
Yeah.
Help me understand this.
It feels like a paradox.
Yeah, it's a key insight.
And it suggests this fascinating shift,
I think, in consumer behavior.
The report points to a couple of possibilities, right?
Maybe people are just becoming more
discerning about their wine.
They're opting for quality over quantity.
Or maybe those pricier bottles, they're
fulfilling this desire for something
special in a world that's felt, well, anything
but normal these days, right?
Yeah.
Either way, I think it makes you wonder,
what does this say about how we view and value wine now?
It really makes you think, are we after taste or status
or experience or maybe a bit of all three, right?
Right.
This is where things get really interesting.
OK, so we're spending more on fewer but fancier bottles.
Right.
But who exactly is the modern wine drinker?
Are we all becoming sommeliers in training
or is there more to the story?
Well, it's funny you should ask.
What's fascinating here is this generational changing
of the guard.
OK.
You know what I mean?
The report breaks down wine consumption by generation.
Oh, right.
And it turns out baby boomers, the generation that really
embraced wine early on, they're actually
drinking less as they age.
Makes total sense.
Priorities shift.
Right.
My parents are all about herbal tea these days.
Yeah.
You can barely get them to split a bottle at dinner.
It's so relatable, right?
Totally.
And it's not just your parents.
This trend of boomers drinking less is pretty widespread.
Stepping in to fill their glasses,
we've got Gen X millennials, Gen Z.
OK.
These generations now make up the majority of wine drinkers.
Wow.
Which has a big impact on the types of wines
we're seeing on the shelves these days.
That's a powerful shift.
So what are these younger generations
looking for in their wine?
I mean, are we talking bolder flavors, Instagrammable labels,
a deeper focus on sustainability?
Yeah.
What's the vibe?
All of the above.
I mean, this younger demographic,
they're definitely more experimental, right?
OK.
More open to trying new things, new flavors, natural wines,
orange wines.
They're also more concerned with sustainability
and ethical sourcing.
Right.
Wanting to know where their wine comes from, how it's made.
And they're also interested in the story behind the bottle.
Right.
The place.
It's like that craft beer boom.
Yes.
Smaller batches, more experimentation,
a focus on quality ingredients, and a story in every sip.
Exactly.
Got it.
Now, while we're talking trends, we
can't forget about the sober curious movement.
Oh, yeah.
Right?
It's everywhere these days.
Oh, yeah.
That's definitely a thing.
Mocktail bars, zero proof spirits, even wine alternatives
are popping up left and right.
Yeah.
I've even dabbled in some of those myself.
Right.
So with all this talk of mindful drinking,
are people actually drinking less alcohol overall?
You know, that's where the daily gets a bit tricky.
OK.
Well, the sober curious movement is definitely having a moment.
Right.
Overall, alcohol consumption in the US
has stayed relatively stable.
Interesting.
Yeah, it makes you wonder, are people just being less honest
about their drinking habits when they're surveyed?
You know, there's a lot of social pressure
around alcohol these days.
So maybe the surveys aren't capturing the full picture.
It's like the unspoken pressure to always be on, even
with our drinking choices.
Yeah, totally.
Maybe opting for a mocktail is the new it drink,
at least publicly.
Yeah.
But back to those high end sippers we talked about earlier.
OK.
The report mentioned that almost a third of wine drinkers
are regularly shelling out over $20 a bottle.
Wow.
That's a testament to the power of a good cabernet, right?
It really is.
Yeah.
But I think it goes beyond just the wine itself, right?
OK.
This willingness to spend more on a single bottle
speaks to, I think, a growing sophistication
in the American palate.
OK.
A desire for quality.
Yeah.
And a sense of adventure.
You know?
Yeah.
People are willing to invest in experiences,
even if it means buying one less bottle overall.
I can definitely relate to that.
Sometimes it's about treating yourself
to something special, something you'll
really savor and remember.
Exactly.
Yeah.
Now, beyond generational shifts and spending habits,
what I find most encouraging is that the face of the wine
drinker is changing.
In what way?
It's becoming more diverse.
OK.
Reflecting the broader demographic shifts
that we're seeing in the US.
So it's not just about age or how much you spend.
It's about inclusivity.
Exactly.
Wine becoming more accessible and appealing
to a wider range of people.
That's something to raise a glass to.
Absolutely.
And speaking of those crafting the wine,
let's turn our attention to the winery themselves.
OK.
What are their thoughts on all these changes?
Right.
What keeps them up at night?
Let's find out.
We've talked about the changing tastes of wine drinkers,
this evolving market.
Right.
But what about the people behind the scenes,
those growing the grapes, crafting these vintages?
Yeah.
What's their perspective on this whole shifting landscape?
Well, despite all these challenges, the report,
it actually reveals a surprising amount of optimism
among US wineries.
OK.
The majority are actually feeling pretty
positive about the future.
That's encouraging to hear.
Yeah.
I imagine it takes a certain resilience
to weather the storms in an industry
as dynamic as winemaking.
Absolutely.
I mean, these are people who understand
the ebb and flow of nature, the unpredictable dance of supply
and demand.
Right?
But their optimism also, I think,
speaks to their incredible ability to adapt and innovate.
Right.
It makes you appreciate that bottle of wine even more,
knowing the passion and dedication
that went into crafting it.
Absolutely.
Yeah.
Wow.
Now, that's not to say that every corner of the industry
is experiencing the same level of success.
Right.
The report kind of highlights that wineries
in different regions are seeing varying degrees of growth.
OK.
For instance, those on the Central Coast
and in the Pacific Northwest, they
seem to be particularly well positioned these days.
That's interesting.
I wouldn't have necessarily guessed those regions
would be leading the pack.
Yeah.
What's driving their success?
It's a confluence of factors, right?
Local tourism plays a role, right?
As does, I think, the growing reputation
of the specific wines produced in those areas.
It really underscores how much location or terroir,
as it's called in the wine world,
really influences a winery's success.
Terroir, that magical combination
of soil, climate, everything else that makes a wine unique.
Precisely.
Yeah.
Now, beyond those regional differences,
the report also highlights a shift
in how wineries are getting their bottles
into the hands of eager consumers.
OK.
We're seeing this rise in direct to consumer sales,
particularly among smaller wineries.
Direct to consumer, you mean like those wine clubs
that you hear about or wineries selling directly
from their tasting rooms?
Exactly.
It's a way for smaller wineries, those producing
limited quantities of really specialized wines,
to kind of bypass those traditional distribution
channels and really forge this more personal connection
with their customers.
Yeah, that makes sense.
It's like having this direct line to the source.
You're getting access to exclusive vintages
you might not find anywhere else.
I can definitely see the appeal for both the winery
and the consumer.
Yeah, you hit the nail on the head.
It allows the wineries to really tell their story,
share their passion, build that loyal following.
So is this the future of the wine industry?
Are we all going to be getting our wine directly
from the vineyard someday?
That is the million dollar question.
Right.
It's a fascinating question.
And to be honest, one, without an easy answer,
while direct to consumer is definitely booning,
particularly for those smaller boutique wineries,
larger producers, they face this different set
of considerations.
They're often looking at things like new brand creation
or line extensions.
Think new flavor profiles, variations
on existing products to capture market share
in this really competitive environment.
Line extension.
So like a classic Cabernet Sauvignon
getting a modern twist.
Exactly.
Maybe with a hint of something unexpected.
It's about innovation, right?
Appealing to these evolving palettes
and staying ahead of the curve.
But this focus on premiumization,
on these higher priced bottles, it raises a question,
I think, for the budget conscious wine drinkers
among us.
OK, you're reading my mind.
Will we still be able to find those hidden gems,
those delicious bottles that don't break the bank?
Yeah, that's where the report offers,
I think, a note of uncertainty.
The future of those more affordable wines,
it's a bit unclear, honestly, as production costs rise
and consumer preferences gravitate
towards those premium options.
The era of the budget friendly bottle
might be facing some headwinds here.
It's a bittersweet thought.
On the one hand, it's exciting to see the industry evolve,
push boundaries.
But on the other, I'll admit, I have a certain fondness
for those go to bottles that never disappoint.
Of course, yeah.
And they're usually pretty easy on the wallet.
That's right.
Yeah.
Well, as with so many things in life,
it seems like the world of wine is in constant flux.
Yeah.
But that's part of what makes exploring it so fascinating.
There's always something new to discover,
a new vintage to savor, a new story to uncover.
That's a beautiful way to put it.
And as we wrap up this deep dive into the US wine industry,
I'm struck by the resilience of the people involved,
their passion for their craft and their unwavering dedication
to producing this product that really brings people together.
Cheers to that.
Yes, cheers to that.
And the next time you find yourself browsing the wine aisle,
just remember what we talked about today.
Those bottles, they represent this tapestry of history,
innovation, and yes, even a bit of economic intrigue.
Exactly.
So go forth, explore those vineyards,
whether in person or from the comfort of your own home,
and see what treasures you uncork.
I love it.
Cheers.