2023 numbers tell a story of wine’s continuing decline
and provide little hope for a quick turnaround.
By Jeff Siegel
Wine ended 2023 with one of its worst holiday performances in recent memory, seeing sales drop 8.1% in the final three months compared to the same timespan in 2022. That was even worse than its overall performance last year, a 7.5% decline in volume.
The gloomy news continued in January, according to figures released March 4. Wine on-premise declined 5.4%, two percentage points lower than the December data, while off-premise wine dropped 8.4%, one-half a percentage point lower than the previous period. There were also losses in table wine across all prices, though the smallest decline came at bottles priced $11-$14.99, down -4.7%.
And, yes, there are some caveats when looking at the numbers compiled by SipSource, which tracks wholesaler depletions. But they still tell a story of wine’s continuing decline, and provide little hope for a quick turnaround.
“Wine has taken a step back,” says SipSource analyst Dale Stratton, who oversees the annual survey, which was released at the end of January. “In 2024, it’s not going to get any worse and should level out — maybe even improve a little bit. But wine isn’t going to get back to significant growth any time soon.”
Data without price points
Why do the SipSource numbers matter? Because the group, owned by the Wine & Spirits Wholesalers Association (WSWA), uses aggregated distributor depletion data for its analysis. The depletion figures represent more than 60% of wholesale wine and spirits products by volume, both on- and off-premise, and from distributors in all 50 states. This makes it one of the most accurate sales snapshots in the fragmented world of wine statistics.
Stratton says the 8.1% holiday decline was tempered by retailers who, despite a variety of discounts and deals offered for the first time in several years for what’s known as “OND,” bought less and kept fewer SKUs on hand because they didn’t want to be caught with too much inventory if holiday sales were slow. It’s also worth noting, Stratton says, that SipSource data doesn’t measure value, so that 8.1% shortfall may not have been as bad when measured in dollars.
Still, even with those caveats, the SipSource data jibes with similar surveys from Nielsen (2023 down 4% from 2022) and BW166 (down 7.6%) for all of last year. There is little getting around that the 2023 SipSource numbers were grim.
Even stalwarts are down
Sales of Chardonnay and Cabernet Sauvignon, the traditional heavy hitters for wine sales, fell by 8% and 7.5%, respectively. Even red blends and rosé, which had been holding their own over the past several years, saw steep declines of 10.7% and 14.3%.
Red wine, in fact, saw a slump across all varieties and blends. None of the eight categories that were tracked showed a sales increase in 2023, based on combined on- and off-premise sales for wines costing $11 or more. By comparison, two of the seven whites showed gains.
“Younger consumers prefer lighter, more refreshing wines, and I think that’s what we’re seeing here,” says Stratton. “It’s just not in beverages, either, but food, too. When’s the last time you heard younger consumers talking about going on a date to a steakhouse?”
The $11 to $25 table wine category, though all in decline from 2022, didn’t fare as badly as the other price points. It was down around 5%; wines costing less than $11 were down about 9%, and $25 and higher showed double digit losses. However, says Stratton, that may have more to do with super-premium wine drinkers shifting channels from retail and restaurants to direct-to-consumer.
Inventories at capacity
Meanwhile, says the report,”Wholesaler alcohol inventories remain bloated.” The gap between inventory and sales, which had remained relatively level from 1992 to 2010, began to grow in 2011 and exploded — not surprisingly — during the pandemic. The inventory gap has remained at near-pandemic levels since then.
Restaurant sales, which were lagging even before the COVID-19 shutdown, are nowhere close to recovery, according to the SipSource data. On-premise wine sales started the year down 10% from the same time in 2022 and never really recovered. December sales fell 3.5% compared to December 2022.
Bits of good news
There were, however, a couple of bright spots. Prosecco, up 5.3% year over year in volume, was the only sparkling wine to show a sales increase; the entire category dropped 7%. New Zealand Sauvignon Blanc, “which has established a good reputation around $15,” says Stratton, and fits the lighter and fresher consumer mantra, outperformed most of the rest of white wine.
Finally, spirits — which the study also analyzed — showed mid-single digit losses compared to 2023, but were buoyed by the performance of canned cocktails and RTDs. This might bode well for canned wine, says Stratton, as younger consumers seem more willing to accept wine in something other than the traditional glass bottle.
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For more information about the state of wine industry sales as well as access to sales and marketing experts, join WIN at the Wine Sales Symposium on May 16, 2024, in Santa Rosa, Calif. This year’s program will kick off with an in-depth look at how the wine category is performing overall and what the key indicators could mean for sales in the near future. The conference will also touch on other aspects of sales and marketing efforts including 3-Tier and direct channel strategies, pricing, public relations programs, and more.
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Jeff Siegel
Jeff Siegel is an award-winning wine writer, as well as the co-founder and former president of Drink Local Wine, the first locavore wine movement. He has taught wine, beer, spirits, and beverage management at El Centro College and the Cordon Bleu in Dallas. He has written seven books, including “The Wine Curmudgeon’s Guide to Cheap Wine.”
