I don’t think we should minimize the many factors that threaten the wine industry. The current fashion for producing health scares around the consumption of even small amounts of alcohol, the indifference younger consumers are showing toward wine, and the over-production of wine grapes will surely wreak havoc on the profit margins of many wineries. Some people will lose their livelihoods as a result, and the wine industry may have to undergo some retrenchment to get supply back in line with demand.
But it’s also important to remember that there are really two wine industries (or perhaps three or four depending on how you want to count). There is an industrial winemaking business consisting of a few mammoth holding companies that produce the vast majority of the wine sold around the world, much of it generic and uninteresting. And then there are tens of thousands of smaller producers that make a fraction of the wine sold but account for most of the wine that wine enthusiasts would deem of higher quality.
It isn’t obvious that the threats to the wine industry fall equally on these two quite different markets.
So I was pleased to see this article by Simon Woolf in which he argues that it is really the industrial wine sector that is most deeply affected by these threats.
He points to the massive reduction in sales suffered over the past few years by industry giants such as Constellation:
For example, take a look at these figures for Constellation Wines, which owns brands such as Robert Mondavi, The Prisoner and Kim Crawford. Between 2016 and 2022, their annual sales of wine reduced by $1 billion, from $2,700,000 down to $1,700,000. See the SVB report for figures from all top seven players in the US wine market – all mostly down 2-3% in 2022.
Most of this reduction in sales is in the budget wine category that sells for under $15 per bottle.
He then argues that small production wineries are not similarly affected. He points to the Silicon Valley Bank report for 2023 which shows modest increases in sales in the premium wine category.
But much of his evidence for his thesis is anecdotal:
My anecdotal evidence from visiting or meeting with hundreds of (mainly) European growers each year, and talking with importers, retailers and sommeliers is that the artisan or ‘craft’ end of the wine market is healthy in terms of sales. Its issues are not a lack of customers or declining consumption, but rather climate change, forest fires, shortage of harvest labour and the extraordinary rise in prices of commodities such as glass bottles and corks.
He furthermore points out that it’s only wineries with shareholders that need to grow every year. Artisan wineries usually can’t grow quickly because it takes several hears to develop a vineyard. Their strategy is best called a strategy of resilience. They reduce vineyard holdings when necessary and focus more on passing a healthy business on to the next generation, especially by combatting environmental issues including climate change
He closes on a positive note:
The world has all the components to build a resilient wine industry, and to engage new generations. We just need to use those components more effectively. Wine production in the 21st century is more geographically distributed and stylistically diverse than it has ever been in history. Wine is produced on every continent, and in more than 50 countries. Wherever you live, someone is making or at least selling wine that didn’t have to travel too far to get to you.
One point he doesn’t raise but I think is central to this debate, especially in light of reports that younger generations are not fascinated by wine.
Are industrial wines really the gateway that gets people interested in wine? I doubt it. There are a few interesting wines that sell for under $15 but they are difficult to find and you have to know where to look for them—it isn’t in a supermarket.
I suspect commercial wine does more harm than good when it comes to encouraging people to take a deep interest in wine. There is simply nothing there to fascinate.’
Aside from the pain it causes to people who will lose their jobs, I’m not sure we should be overly concerned if “big wine” has to shrink a bit to remain profitable.
Exploring the Philosophy of Food and Wine 
Robert, I don’t think we should write off concerns about the “gateway” wines that are disappearing, many of them marketed by these wine giants. Constellation, in particular, has chosen to get out of that end of the business, selling off most of its under $15 a bottle portfolio. They did this both because sales of those wines continue to drop, and because profit margins in that end of the business have also shrunk.
The problem, as I see it, is that smaller, artisan wineries simply cannot sustdainably produce wines at those lower price points. I fear that we are in danger of losing the very wines that will serve as entry points for new consumers. True, Chile and Spain, and some other, lesser-known regions may be able to supply the demand–but those countries, too, are aiming to escape from the economic suicide of producing wines that can compete, on a price level, with beer.
And why do I mention beer? Because it is competing with wine for the attention of consumers. And it’s where Constellation has found the sales volume to compensate for it’s loss of revenue in wine. Wine runs the danger of becoming a very specialized beverage that has priced itself out of the market. Given the fact that we are losing marketshare, this may have already happened. We need those large, inexpensive, commercially viable brands to be successful, because we need them to help consumers begin to taste and get interested in wine.