The pathway is clear. Wine has to change what no longer works.
By Damien Wilson
I recently had the pleasure of being invited to attend Santa Rosa Junior College‘s inaugural Sonoma County Agriculture Summit, which took place at the school’s Shone Farm. Spending much of that day hearing about the challenges being faced by local farmers got me thinking about how the wine industry is coping in the face of the current challenges across much of the sector. As I pondered impassioned pleas to streamline administration and for the government to review taxation regimes, I recalled a fact that made me smile at the prospects of wine’s likely future.
Any good economist will tell you that economic downturns subsequently reveal that the businesses using such time to innovate and invest in opportunities are the ones that recover the most rapidly when economic conditions start expanding. Accordingly, now is the time that wine businesses need to invest in research and development as the means to be best prepared to recover as the wine market begins to head north.
Innovate to attract new consumers
In recent years, we’ve seen wine’s appeal to new consumers wither, as more and more wineries chased elusive profits further up the price curve. Consequently, as wine’s on-boarding price categories started culling the number of product offerings, a demand vacuum bore witness to the emergence of new alcohol categories that captured the attention of new consumers. When I arrived in California from France in 2015, the wine section dominated alcohol SKUs in grocery and liquor stores. In 2025, that’s infrequently the case. So how does wine recover with a rosy future in the face of such endemic challenges?
A good start would be to evaluate the impact of the various factors that have led to wine’s recent struggles, and to recognize that there is no quick or silver bullet solution. Some of the challenges are industry-wide, such as the anti-alcohol movement, while others are specific to each business. Collectively, we need systems that facilitate change and collaboration. The craft liquor industry is rife with collaborations, and these have come about from innovation and the desire to emulate and grow.
It wasn’t all that long ago that Scotland’s Hendrick’s Gin pioneered a cucumber and rose-petal flavor profile. This innovation (and an accompanying global expansion) inspired the Four Pillars distillery in Australia to lead with an olive leaf gin (for martinis), a spiced Negroni gin, and a new style of ‘bloody’ gin from maturation in red wine barrels (procured from collaborators in the local wine region). Such innovative efforts inspired rapid growth in the category — and further cooperation — as emerging Canadian gin specialists, Copperpenny, won international acclaim with a gin flavored with local oyster shells (for crafting impeccable martinis). So, what can wine learn from these mad scientist distillers?
Study (and learn from) competing categories
Part of wine’s challenge is that it’s an industry perceived as being resistant to change and slow to adapt to evolving market conditions. On a recent trip to Australia, the wine aisles in liquor stores looked very similar in design and offering as I recall them from my time working in the industry from the late 20th to early 21st century. However, the most stunning contrast was witnessing the breakneck speed in which the hard seltzer category evolves. That category barely existed in the United States prior to 2015. However, since White Claw grew from an idea to market leader, that category’s value is estimated at close to $15 billion in 2025 — somewhere close to 20% the size of the U.S. wine market.
Seeing that hard seltzer barely existed at the time the wine sector’s growth began to slow, it’s hard to ignore the stark contrast between the respective industries’ market trajectories. Wine can learn lessons from the success of these other industries by finding a way to bridge that difference between traditional brands’ sustained successes, and hard seltzers’ rapid fire fads.
The focus on attracting new consumers is clearly being won by hard seltzers in this new liquor market, and wine needs an influx of innovation to catch up. As we recognize the brands and practices that lead wine into markets that attract new consumers, it is important to recognize those practices and products that contribute to that appeal.
I’m impressed by the way in which Australia’s wine industry has been able to navigate a tumultuous global export market. Challenges, including a mid-pandemic 270% tariff-slapped on the most important market, winegrape oversupplies, static domestic demand, new competing categories, the full pandemic impact and the loss of financial support from the leading wine body, have all forced the industry to become more flexible and innovative in response. To that end, a litany of new packaging, placement, pricing and promotion innovations are suggesting an emergent and slowly recovering industry.
React decisively to challenges
The lessons are clear, in that the chaotic nature of the hard seltzer category goes way too far, but some of those practices and successes have lit up a pathway for us to use what we know and love about wine as a means to help reduce the distance between what people know and the appeal of the new. Wine needs to learn some of those lessons on collaborating for mutual benefit.
Whether it’s on innovations adopted in applying the 4Ps of marketing (product, price, place, promotion) or, as mentioned in conversation at Shone Farm, through alternative land uses (such as leasing vineyards out to hobby or microfarmers) or even transitioning production into new industries (for example, transitioning from vineyards to cash crops or finding new uses for the land based on real estate value).
The pathway is clear. Wine has to change what no longer works, so innovation is the key to new opportunities. The implications are that even though wine’s future may be hazy at this time, the pathway to a successful future is clear as we innovate our way to fulfill the needs of our consumers.
Damien Wilson
In August 2015, Damien Wilson was appointed as the inaugural Hamel Family Chair of Wine Business Education with Sonoma State University’s Wine Business Institute. Dr. Wilson arrived in California following leadership roles at Burgundy’s School of Wine and Spirits Business and the University of South Australia. Wilson’s research background started with the prestigious Wine Marketing Group, where he worked on a series of projects investigating wine consumer adoption patterns, purchasing motivations and retailing strategies. His professional and research interests have realized an extensive list of trade, consumer and academic publications. He also writes prolifically on regionality and conjunctive labeling, tourism and technology.
