The 2024 U.S. Wine Industry: New Trends and a Need for New Data

In this conversation, Adam Beak, Managing Director and Head of Wine and Spirits with BMO, and Jon Moramarco, Managing Partner of beverage alcohol advisory bw166, discuss the industry's need for reliable, relevant information, current wine business pain points and the U.S. Wine Industry Partnership they formed to address both.  

The partnership's forthcoming 2024 BMO Wine Market Report will, for the first time, focus squarely on the dynamic B2B U.S. wine market at every stage in the value chain, from grapes to glass.  

Armed with accurate, relevant data and knife-sharp analysis, those in the wine business will be able to face challenges head-on — and emerge stronger. 

Adam Beak: At a time of so much change for the wine business, there’s so much to navigate right now. What challenges stand out to you, Jon? 

Jon Moramarco: Consumers are being pinched by the rising cost of living and wineries are being hit by higher overheads. Wine shipments were down 7 percent by volume and 2 percent by value in the first half of 2023.1 The first time both volume and value dropped was in 2022, and we're just seeing that trend continue.2 

Beak: It would be easy to blame inflation alone, but I think that’s too simplistic. 

Moramarco: I agree. This is more than a blip. I do think we’ll see the market stabilize. Pandemic pantry loading by customers – and by retailers and wholesalers, too – meant shipments surpassed consumption. That must level out. 

Equally, I doubt we’ll see the market bounce back as it has in the past. Tastes are changing, and Millennials just aren’t drinking wine in the same way previous generations had. There’s no rising tide to lift all ships – or shipments. 

Beak: Then there’s the issue of getting bottles to market. The distribution funnel is so narrow now, with around one distributor per 13 wineries. Thirty years ago, there were more wine distributors than wineries. That makes it pretty tough for a smaller winemaker to get their bottles of Grenache or Pinot Gris into restaurants and stores. 

What can those in the wine business do, in your opinion, to overcome these challenges? 

Moramarco: A lot of these trends are beyond most wine businesses' control, but there are opportunities within them. You’ve got to focus on market share. Look at consumer habits, look at opportunities to scale and collaborate. Learn what others are doing in your category and consider how you could do it better. Consider how you can win.  

It comes down to knowledge, no matter how big or small your wine business is — or what your role is in that business. 

Beak: You’ve worked at pretty much every level of the business yourself. Literally from the ground up, all the way from the vineyards to CEO, before you started bw166. How does that background affect your approach to data? 

Moramarco: On the most basic level, I have a good understanding of what people in the wine business need. Not having access to comprehensive data is frustrating. Being presented with inaccurate data — even more so. 

My company has a huge amount of data on the wine business, but there are gaps. For example, what are the biggest competitive challenges for wine companies as 2024 unfolds? What is the top way that leaders in the wine industry plan to increase sales this year? Are wineries selling more direct-to-consumer, in the tasting room, or wholesale? 

Beak: Questions such as those are exactly why we formed the U.S. Wine Industry Partnership, along with WineBusiness Analytics. I see our mission as providing a clear, full picture of the state of the U.S. wine industry that businesses can really use and apply to their own day-to-day operations. 

Moramarco: I completely agree. The partnership should be the go-to source of information and analysis at every stage in the wine value chain. And I really mean everyone at every stage, from planting and harvesting, distribution, and bottling and selling. We’re firmly geared toward those for whom wine is a business, as well as a pleasure. 

Beak: The B2B wine market here in the United States is the world’s largest and, in my opinion, the most dynamic. We're seeing a generational shift in drinking preferences, as you said, and the shrinking distribution funnel means wine businesses are having to think outside the box. Scaling up might become more important to attract a distributor, while some wineries are focusing on direct-to-consumer sales, which just blew up during the pandemic. 

Moramarco: Other industry reports have tended to focus on overarching trends and soundbites that, while interesting, aren’t necessarily helpful to wine’s workers and decision-makers. They’ve also lacked scope. It’s often all about the boutique, premium wineries – ignoring the big guys, other small wine businesses, and everyone in between. Or they lean too heavily towards one region. 

Our report will illuminate the bigger picture while also shining a light on all corners, delving into each stage of the wine value chain on a granular level. 

Beak: For me, this really is a first of its kind. The scope here is huge, with thousands of wineries taking part in the survey. 

For the first time, a single report will distill trends and patterns across wineries of all sizes across the United States. How can we really tease out the issues that really matter to wine businesses, from grapes to glass? 

Moramarco: This is very much designed to be a useful report in the most fundamental sense, for every type of wine business. 

For example, an owner of a garagiste wine label, as a small company without the infrastructure of a household label, should find insight into managing supply and distribution issues. Equally, a tasting room supervisor or buyer can trace trends in consumer habits and preferences. 

The report will be broken down by winery size, location, and price point. Representation of all U.S. wineries, and at all levels of the business, is so important here. 

Beak: Absolutely. Knowledge is power, and the 2024 BMO Wine Market Report will arm wine businesses with knowledge that’s truly relevant to them. We need that more than ever. 

^{1 Sovos ShipCompliant, Mid-Year Direct-to-Consumer Wine Shipping Report Shows Decline in Overall Volume and Value, July 2023.} 

^{2 Sovos ShipCompliant, 2023 DtC Wine Shipping Report, January 2023}