correction take? “There are far too many variables to predict confidently,” says McMillan. For instance, the downturn in demand in the late 1980s was corrected in the early 1990s thanks to the French paradox—studies showing the French population had lower rates of coronary heart disease, leading to the suggestion that moderate red-wine consumption has health benefits. Recent
5 predictions from the Silicon Valley Bank State of the U.S. Wine Industry 2025: n Due to the sunsetting of baby boomer wine consumption, the industry will find a bottom and reach back to a zero growth rate in 2030. n Premium wine business will return to flat growth between 2027 and 2029 and grow at a rate of inflation plus population growth levels thereafter. n Off-premise will move to flat growth between 2028 and 2031. n Until retail sales improve, growers will have difficulty negotiating favorable contract pricing and terms. n Clearing wholesale inventory and returning to predictable depletion volumes will likely take most of 2025 and possibly into 2026.
Rob McMillan
years have seen a “no safe amount” anti-alcohol campaign negatively affect wine demand, though that narrative has been tempered with credible studies supporting alternative views, says McMillan. Still, “when demand flattens, as is currently the case, there are limited corrective strategies,” he continues. A game-changer like the French paradox “is unlikely to fall into our laps twice,” he says. McMillan believes collaboration is key, and the need for new marketing campaigns at every level has never been greater. “Anything we can do to collaborate with neighbors, friendly regions and fellow association members to market wine in wider circles can help shorten the length and severity of this cycle,” he writes. “And once this downturn ends, strengthen these relationships to bolster revenue, volume and profitability.” The risks of ignoring a rapidly changing market far outweigh the risks of trying new strategies, he stresses. “An untested idea, a novel outreach approach, collaboration with neighboring wineries and establishing a Wine Business Improvement District are all worth considering.” Concluding on a hopeful note, McMillan asserts that “wine is what younger consumers want. They just don’t know it yet.” “Wine’s characteristics fit the bill—green, plant-based, natural, minimal additives, no added sugars, often organic and more—all [those] align with younger consumers’ values,” he points out. “There is an opportunity, particularly in the 30- to 45-year-old age brackets, to change minds about wine.” g
Read on Sonoma is off to its strongest start yet, with almost 4,000 students participating and 35,000 books read so far! 3rd through 6th grade students have also scored an average of nearly 90% or higher on their quizzes. Keep up the great work!
Please email comments to jwalsh@NorthBaybiz.com
24 NorthBaybiz
May 2025
Made with FlippingBook - professional solution for displaying marketing and sales documents online