Yet this year McMillan takes on a particularly foreboding tone in his introduction to the report, likening the need for wine industry reinvention to the Darwinian theory of evolution: Those wine businesses which don’t adapt to changing circumstances will be selected out. McMillan begins the report with one of The Origin of Species’ greatest hits: It is not the strongest nor most intelligent of the species that survives. It is the one that is the most adaptable to change. And if that little nugget—routinely attributed to Darwin, but actually a paraphrase of natural selection made in a 19th century speech to American businessmen—doesn’t drive the point home, McMillan lays it out a bit more bluntly: “Waiting for a fictive cohort to age sufficiently to discover wine or believing that our strategies ‘have always worked before’ is toxic to adaptation when the context driving demand changes,” says McMillan, before adding: “That is something the weakest businesses will do. Their lack of adaptation will cause a predictable outcome.” And for those who think that “predictable outcome” is one of thriving success, we’ve got some shares of Underground Cellar we’d like to sell you. Here’s a brief overview of the 2024 State of the U.S. Wine Industry report, NBb-style… Alcohol, Demographics & Health While this topic falls as chapter 8 of the report, we’re moving it to the top because it’s the topic that deserves the most attention from the industry—younger consumers aren’t as
Rob McMillan, of the Silicon Valley Bank Wine Division, is raising a red flag about age-related shifts in the alcohol-consuming market.
into wine as their older counterparts. “There is no clear trend for most age bands except the youngest,” writes McMillan, who points out that beginning around 2000 spending among those under 25 began to shift away from wine toward other beverages, goods and services. While variable factors are involved in the ongoing downward trend—greater choice in beverage options, health consciousness, rising cost of living and the mainstreaming of cannabis among them—this could be the single-greatest threat to the industry: Those who will have the most money to spend in the coming decades may not be spending it on wine.
: Wine is facing rising competition from other alco’ options like spirits, craft beers and seltzers.
20 NorthBaybiz
March 2024
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