U.S. WINE SLOWDOWN COMING?

BRACE YOURSELVES, there’s a wine slowdown coming! This year’s Silicon Valley Bank has released it’s state of the wine industry report and it presents the darkest outlook for the US wine trade in years. After more than 2O consecutive years of growth, a decline in US per capita wine consumption is forecast for this year. Tens of thousands of grape acres will also be permanently removed from the California Central Valley this year, it says, while the supply of land for premium grapes across the country will continue to dry up, pushing up prices even further. Imports are also expected to continue eating into the domestic fine wine market, while the growth of the fine wine category will slow to 9 to 13% from 14% last year. However, premium and value sales will remain strong.

Generational shifts are being blamed for the predicted drop in per capita consumption, as the spending power of baby boomers becomes replaced by more thrifty millennials with less of an attachment to wine. This latest report appears to go against an IWSR analysis commissioned by Vinexpo last year which predicted that consumption in the US would grow by 11% between 2O15 and 2O18. But the potential for the premium category in the country will continue to improve.  Domestic wine over $1O per bottle will show growth of between 4% to 8% in 2O16, the report says. But trends are unpredictable and can change on a dime. In the end, of course, it’s time that will tell.