The U.S. wine industry, which dates to the 1560s, rapidly expanded from a series of scattered, small-scale vineyards to widespread production over several centuries.
Though it’s now centuries old, the industry is still growing with an estimated compound annual growth rate of 6.8% and could exceed $115 billion by 2030.
However, a new generation of wine consumers is transforming the industry from one tied to tradition and luxury into a more casual and fun hobby that’s accessible to wine drinkers of all experience levels. Here’s a quick look at the history of winemaking in the United States and how new consumer trends are changing the shape of the industry.
A Brief History Of Winemaking In United States
When Europeans arrived in the United States in the 16th century, they immediately began making wine using a local grape called muscadine. Growing along most of the eastern seaboard and as far west as Texas, muscadine lent itself well to sweeter wines with a medium body and intense fruity flavors.
While every state still produces wine, the industry has become heavily concentrated in California where approximately 81% of U.S. wine is produced. The state’s Mediterranean climate made it the perfect site for importing Spanish and Italian grape varietals that needed dry, sunny conditions to thrive.
That helped the country become one of the leading wine producers in the world, surpassed only by Italy, France and Spain. It’s also helped the American wine industry grow into a $63 billion market by 2021.
Market leaders like Constellation Brands Inc. STZ have traditionally dominated the market through sheer variety, producing and marketing a wide range of beverages, including wine, beer and spirits.
Meanwhile, others in the industry make a name for themselves by niching down into specific regions or varietals. Willamette Valley Vineyards Inc. WVVI, for example, exclusively produces a variety of red and white wines in Oregon’s Willamette Valley.
Others, like Duckhorn Portfolio Inc. NAPA, compete by building up a portfolio of small, local wineries to offer a broader product line without sacrificing the premium, handcrafted quality of wines from smaller wineries.
But as consumer trends change and the market evolves, winemakers are finding new ways to make a name for themselves in a market where tradition has reigned supreme for centuries.
Younger Consumers Are Driving Innovation In An Old Industry
While reputation and tradition are still key to winning over older wine consumers, younger consumers want fun, innovation and a more casual wine-drinking experience while still being able to learn about different varietals, regions and what makes a premium wine.
As millennials and Gen Z account for a rapidly growing segment of wine drinkers, producers are answering those demands with more unique branding, alternative packaging and improved shopping experiences.
One of the most successful of these adaptations has been on-the-go packaging. Boxed wine, bagged wine, canned wine and other alternatives to the traditional glass bottle have helped the industry meet the needs of younger consumers who want to enjoy wine as part of a larger experience like hiking, boating or spending the day at the beach with friends.
Splash Beverage Group Inc.’s SBEV Copa di Vino, for example, packages premium wine in a portable hourglass-shaped cup that’s easy to carry and comes with a splash-proof cap so it can be closed and saved for later. There’s no bulky glass, no need for a corkscrew, and the wine is already portioned out into glasses.
These often smaller formats also make it possible for millennials, who typically drink less than older consumers, to enjoy wine on these adventures without committing to an entire bottle. It’s also better suited to adventurous wine drinkers who can more readily sample diverse wines by buying smaller, more affordable formats.
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