The challenges facing wine industries globally are now well-established, with demographic shifts, economic pressures and moderation trends driving significant declines in consumption.
Given that Australia is currently the fifth-largest wine producing nation globally with an estimated value of $45 billion and associated workforce of over 160,000 people, these challenges are of particular concern to Australian wine producers, all the more so given the current domestic trends.
As Wine Australia’s Manager of Market Insights Peter Bailey recently told Drinks Guide, “the volume of wine consumption in Australia peaked in 2016 and has been falling since, with the decline accelerating following the COVD-19 pandemic in 2020.”
Recognising the breadth of the global problem, IWSR’s Chief Operating Officer of Consumer Insights and Custom Analytics Richard Halstead adds that, “for wine, the battle to recruit younger legal drinking age drinkers in sufficient numbers is intensifying, as many mature markets become increasingly reliant on older generations to shift the volume.
“However, despite this largely pessimistic outlook, there remains plenty of potential for wine to innovate and harness opportunities in this challenging new landscape.”
To help wine producers navigate these challenges, the IWSR has identified five key trends it believes will shape wine industries globally in 2025 and beyond:
1: “Demographic challenges”
In spite of adult population growth, the number of wine drinkers in key global markets plummeted by five million people between 2021 and 2024, finds IWSR. However, the news isn’t all negative, with the fewer category entrants typically being more engaged.
“We have an emerging paradox in wine, where we are missing a chunk of recruits we would normally expect from younger generations, but those younger consumers we are recruiting are typically much more involved and higher spending,” Halstead said.
“Meanwhile the bulk of volume sold is to Boomers (over-60s), who constitute the majority of drinkers, and tend to report lower levels of involvement than younger drinkers.”
2: “The moderation trend”
In addition to shining a light on the growing better-for-you health trend, moderation in wine is also reflective of current economic pressures. According to IWSR consumer research conducted across 17 markets, 40% of consumers are drinking less wine due to a general reduction in their alcohol intake, 28% to reduce their amount spent on wine, and 23% because wine has become more expensive.
In the top 10 global wine markets, between 80 and 90% of consumers who have moderated their wine intake “report little intention to return to previous consumption levels, even if their motivations are seemingly short-term,” Halstead said.
Within Australia, the proportion of Australians purchasing zero alcohol versions of alcoholic drinks has more than doubled since August 2020, finds recent analysis from Circana, with 29% of shoppers having purchased less alcohol in the six months up to January 2025 when compared to the six months prior.
3: “Financial pressures”
Building on this, volume declines in wine globally have been significantly skewed towards lower priced wine categories. Meanwhile, IWSR forecasts growth in premium-and-above price tiers between 2025 and 2027. This served as a basis for Treasury Wine Estates to divest its sub-$10 Commercial Brand portfolio via a non-cash impairment charge of $290 million in August of last year.
Already, TWE has registered growth as a direct result of this shift towards a luxury focus: “Our interim 2025 performance highlights the benefit to the quality of earnings and key metrics from our multiyear transformation to a Luxury-led business, with this segment of the market continuing to be healthy in our key trading regions,” said CEO Tim Ford in its half-yearly report.
4: “Innovation opportunities”
IWSR also recognises opportunities for wine producers that are able to innovate in order to adapt to changing consumer demands. Many producers have already started experimenting with new formats, styles, flavours, and marketing approaches to increase wine’s suitability to different consumer demographics and consumption trends.
Drinks Trade recently tasted through seven new wine innovations from three different producers, each championing a different non-traditional winemaking approach. This included a wine release infused with marine collagen; Australia’s first hard wine brand; and two ex-whisky barrel-aged reds.
This tasting followed on from a previous wine spritzer tasting and discussions around the emerging innovations in wine packaging and format.
“We’ve just scratched the surface on format,” Co-Owner of Fourth Wave Wine Nicholas Crampton told Drinks Trade last year. “I was really surprised at how successful the bagnum launch in Australia was … Cans [also] had a huge launch and … are really working albeit more in sparkling and standing up occasions.”
When asked about Taylors Wines’ approach to innovation, Export Manager Justin told Drinks Trade yesterday that “it’s got to be that combination of innovation that consumers are after, but innovation that we can deliver on … there’s been other pieces of innovation, like cans. We looked at it and have gone, I can see there’s a future for that. I can see why the consumer might like that. But it’s just not deep enough in our DNA to pull it off.”
5: “Valuable Millennials”
Despite the slower rate of entry into wine, Millennial consumers represent a highly valuable market segment as they enter their prime earning years. Furthermore, they are typically more engaged with the category and – in key markets including Australia, the UK and the US – report drinking more at a time when the average drinker is reducing consumption.
“Millennials who drink wine regularly report buying more expensive wine than the average for the market as a whole,” said Halstead. “Attracting more of these consumers into wine – and hanging on to the ones already there – will be an important future driver of value in the category.”
One area of opportunity for achieving this will be by catering to the exploratory tendencies of younger wine consumers who typically consume an above-average number of grape varieties.
“As the general wine drinking population is the oldest bracket of wine consumers, [they] are probably still drinking more traditional Australian styles, and as younger groups of consumers come through, they’re eating more diversely, they’re drinking more diversely,” Kim Chalmers of Chalmers Wines told Drinks Trade last year.
“I think there’s also interest in provenance of products … Modern consumers and younger consumers are less likely to just go and buy the same brand every time because it’s a brand name, they’re going to go and look for products that actually have a story and some sort of meaning or purpose or whatever behind them that they can feel connected to.”
Halstead adds, “they frequent more wine-buying channels, giving extra opportunities for engagement, such as personalised experiences and storytelling to build awareness and loyalty; and local points of engagement, including pop-up events, wine dinners and wine clubs.”
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In summary, Richard Halstead says that, even though “structural threats to the wine industry persist,” opportunities remain for producers and markets that are able to adapt to changing consumer requirements.
Wine Australia’s CEO Dr Martin Cole adds that “the year 2025 presents an opportunity for the Australian wine industry to reset its course for a vibrant and sustainable future. Through innovation and diversification, embracing sustainability and strengthening industry collaboration, Australian wine can solidify its position as a global leader and ensure its continued success well into the future.”
Read more from Martin Cole’s Drinks Guide letter to industry here.
Navigating the ‘subdued but opportunity-rich’ 2025 liquor landscape