Why the wine industry must stay innovative to survive
Some discussions have been going on as the wine industry is noticing some level of plateauing or pullback in the consumption of wine in the USA. Some suggestions have been provided to explain the reason for the observed stagnation in the wine industry in the USA. For instance, baby-boomers seem to be getting old and hence, consume less wine. The younger generation seem not to spend on wine as much as the older generation did when they were younger. This could be due to several options that they have available today including spirits, craft beer, cider, other alcoholic beverages. The increasing legal of status of cannabis across the USA also provide another option that the younger generation opt for when they want the effects of alcohol. There is also the issue of dying innovation in the production of wine and increase in price. If the price of wines is becoming too high for you, you can read about shops where you can get wine at discount prices on US-reviews.
The fact that revenues and sales have plateaued is not the only problem. There are other concerns that also needs to be addressed including state/regional laws, labor costs, distribution channel changes (winery retail models and tasting/clubs room, DtC, on and off-premise sales).
An annual study by the Silicon Valley Bank EVP, Mr. Rob McMillan, in the 2019 Report about the State of Wine Industry states that, “The total effect of damaging health messaging without mentioning the benefits that people can get from the moderate consumption of wine negatively affects the consumption of wine, especially for the current young generation”. It is difficult to know how valid available studies are regarding the advantages and disadvantages of consuming wine on the health of the person drinking it.
This has resulted in the need for business strategists in the wine industry to come up with strategies that can be used to identify new trends. It is important to start planning for the future now to avoid a situation where the consumption of wines will reduce significantly leading to lesser revenues and case sales. Good planning has no disadvantage for any business contingency and the wine industry could start thinking along that path.
There is the need for a changed focus and new direction if the wine industry in the USA wants to continue to grow. Those participating in the industry presently must innovate and grow. Failure to innovate or grow could lead to their death. The increase of price alone to make up for plateauing sales is not going to solve the problem. On the other hand, it will only make prospective customers to opt for other cheaper alternatives, thereby further reducing sales. It is important for there to be more case sales and not just more revenues. Hence, there is the need to find a long-term solution to the issues.
If there are going to be changes to consumption, consumers need to dictate the change. The first question to be answered should be, “Why do people consume wine”? The answers to this question include availability, aromas/taste, to compliment food and for sociability. Generally, there are many other reasons but these are the major reasons why most people drink wine. Irrespective of the reason, most people are aware that wines are the oldest alcoholic drink. Historically and presently, it is also widely known that wine has always been and remains a drink taken during celebrations across cultures.
Stakeholders in the wine must make efforts to leverage on the reasons people take wine and promote those reasons. They can innovate around the reasons and promote the need for such activities and reasons that will make the younger generation to embrace wine and consume them frequently, albeit, moderately.