premiumisation dominates as volume drops

What’s happening in wine sales in the US mirrors broader economic patterns, with a few key exceptions. The takeaway is that high-end wines are soaring and mid-to-lower-priced wines are tanking. Only it’s not quite that cut and dry. Kathleen Willcox reports.

Last year, the top 25% of wineries enjoyed revenue growth of 22%. The bottom 25% saw a -16% decline, according to the Silicon Valley Bank’s State of the US Wine Industry 2025. It looks like that’s continuing, but with many shades of grey in the black and white.

“Wine continues to face headwinds in both dollars and case volume through the front half of the year, though we are starting to see some stabilisation,” says Kaleigh Theriault, associate director of thought leadership in the NIQ Beverage Alcohol Vertical. “Premiumisation as a mindset for consumers is contributing to shifts and better-than-average trends in wines priced between US$15 and $30.”

A look at the numbers

Looking ahead, Theriault predicts a strong finish for wine in 2025, as long as consumers deliver a solid celebratory and holiday gifting season.

David Parker, founder and CEO of Napa’s Benchmark Wine Group, a leading source for rare and collectable wines, acknowledges that volume sales are down, but points to strong numbers for high-value wines and collectables.

“Rare and back vintage wines have been appreciating in the US market overall so far in 2025, being up several per cent on average,” Parker notes. “Bordeaux, Port, Champagne and Grand Cru white Burgundy are the strongest collectable categories, with red Burgundy and Rhones being the weakest.”

The shaky dollar and ever-shifting tariff strategy may play a part, he notes, adding that at Benchmark, each of the last three quarters has seen record sales.

Interestingly, people are modifying their drinking patterns, perhaps as a reflection of younger generations’ embrace of a healthier approach to consumption.

In the four weeks ending June 14, sales of domestic table and sparkling wines through NIQ off-premise fell in volume by 6%, with higher-priced wines fairing better, and those $15 and more declining by less than 3%.

When people are drinking alcohol, they tend to be doing it at restaurants or bars. NIQ’s on-premise report shows that 47% of consumers reported visiting a bar or restaurant for a drink in the past month, for the period ending July 18, with value velocity and ticket counts up 6% and 9% respectively, for the week ending July 26.

What’s behind these dynamic, evolving trends? A complex hodge-podge of financial, social and emotional factors.

Premiumisation

Like “pivoting,” “premiumisation” is overused when it comes to marketing generally and wine sales in particular. And yet, it’s tough to ignore the continued strength of high-priced wines.

“The word ‘premiumisation’ has been utilised in recent years to characterise consumers trading up in price, a multi-decade phenomenon in the US wine industry,” says David Bowman, chief commercial officer at Ste. Michelle Wine Estates in Washington. “While trading up in the wine category overall slowed starting in 2023, the secular trend remains intact.”

While Bowman acknowledges that there are few “compelling US wines below $15 anymore,” they’ve doubled down on investing more in “quality grape growing and winemaking techniques, starting with the 2023 vintage and going forward. The biggest opportunities for the industry to gain new consumers lie in improving our money per ounce quality, and in making wines by the glass more attractive.”

Affordable imports gain favour

The positive flip side of premiumisation is an educated, often younger consumer base seeking well-crafted European wines that punch above their weight class.

It’s no secret that a terroir-driven, sustainably produced wine from Europe is often cheaper than its domestic counterparts. As budgets tighten, those spending less than $50 a pop appear to be scooping up imports.

For Federico Orione, chief marketing officer of Bersano in Piedmont, whose family took ownership of the historic winery in 2021, he sees the downturn and continued uncertainty with tariffs as a distinct opportunity for brands unafraid of evolution and change.

“Since its founding in 1907, Bersano has been appealing to wine lovers because of its strong quality-to-price ratio, but that’s no longer enough in this market,” Orione says. “The wine business is changing. We need to stay relevant and connect with people in the market. That means first meeting their needs.”

Despite the company’s own economic pressures and the increased cost of producing wine, Bersano plans to keep their prices stable by splitting the tariff tax with their importers.

“In uncertain times, which we are in, if you’re a little bit better, and a little bit more reasonably priced, that’s an opportunity to take a big part of the market,” he says.

CEO and owner of the Denver-based importer Grapejuice Group, Danny Keefe, also sees room for high-quality value in the market. He says that sales of their wines that retail for less than $10 have dropped precipitously by -18%, but that sales of wines around or over $40 have increased by 47% this year, with Barolo leading the charge. Value imports are Grapejuice Group’s sweet spot, he says.

“Our imported wines that retail between $10 and $20 have grown 53%, with value wines from Spain and France leading much of that growth,” Keefe says. “Value imports are far less impacted by tariffs, as they still have a higher price-to-quality ratio than most mass-produced domestic wines.”

Younger consumers are particularly eager to drink imports, he says, noting that Prosecco sales are surging, but sparkling wines from France and Spain are also performing well.

Tapping into emotions

There are a number of ways, beyond price and quality, for brands to meet consumers where they want to be.

Nielsen IQ’s latest report, Raising the Bar: Strategies for Thriving in a Moderating BevAI World, finds that good value remains the top priority for consumers when selecting a drink, but that their definition of “value” goes well beyond money, encompassing quality, farming practices and social values.

“Longer-term growth will hinge on how well wine brands are able to adapt to younger legal drinking age generations,” Theriault says. “Challenges are real, but opportunity exists with this younger generation and casual wine consumers, though opportunities exist.”

Parker notes that “emotional marketing” and creating “once-in-a-lifetime” experiences, especially for younger collectors, Millennials now make up 30% of Benchmark’s sales, is becoming increasingly important to their bottom line.

“We have a large salesforce following our recent acquisition of Wine Spectrum, which helps us engage in 1:1 customer interaction, adding to our emotional marketing capability,” Parker says. “SMS has recently also become a major new marketing method for us. Its intrusive nature and the fact that we’re selling alcohol require us to only use this method if customers request it, but we find those customers to be far more active buyers overall.”

Wines with stories will always sell better, but you have to know how to tell and share them.

“People are not as interested in what you do, but why you do it,” says Jonathan Walters, VP of winery and vineyard operations at the Brassfield Estate Winery in Lakeport, CA. “There is a distinct difference in a passion project versus a profit project; when you have the right balance, you can achieve both.”

Brassfield has seen enormous growth this year; depletions year-over-year have grown 39% and revenue has grown 55%.

“We feel our growth is coming from market share from brands that have lost their original intent,” Walters says. “We are seeing that transparency, authenticity and having a truly unique selling proposition is resonating with our distribution network as well as with consumers.”

Orione has also prioritised in-person connections with consumers and members of the trade. He is set to visit the US 10 times this year alone to connect with old and new Bersano customers, and promote a new line of wines launched three years ago that has enjoyed consistent 20% growth year-over-year.

“Our 4 Sorelle [Four Sisters] line is designed for a younger and more urban audience,” Orione says. “It’s fruit-forward, instantly drinkable and fresh. The label is easy to understand and fun, and it’s clear that it pays homage to the four sisters who own the Bersano winery. There is a serious lack of Piedmontese labels addressing the needs of the modern customer, so that’s what we aimed to do with this line, and the sales reflect the urgent need in the market for this kind of wine.”

Ultimately, Orione hopes that the Barbera and Sauvignon Blanc SKUs will reach 250,000 bottles in annual production, with plans to roll out a Nebbiolo SKU in 2026. The Bersano line overall, at about 1 million bottles in production, has grown 6% this year.

“When we purchased Bersano, we had 32 SKUs,” Orione says. “Now we have 16, and we will continue to cut certain ones so we can truly address market needs and offer value. We see the 4 Sorelle line as the strongest grower in the future, but we also want to honour our traditional roots.”

Better for you

Ryan Hedspeth, vice president of marketing for Executive Beverage Company in Wilmington, NC, which represents domestic wines and a range of value-priced imports, concurs, adding that the surging brands also appeal to younger consumers seeking healthier and more eco-friendly wines.

Year-over-year, Hedspeth says that “low-intervention” wines like France’s Maison Riche, Portugal’s Raw Bar and Spain’s Castillo de Monleron have grown 49.7%, 28.8% and 15% respectively in retail sales.

“Low-intervention Old World wines are the original better-for-you choice, crafted with tradition, not shortcuts,” Hedspeth says. “Made without excessive additives or manipulation, they honour the purity of the grape, the land, the vintage. These wines have less manipulation than most of their domestic, lower-priced counterparts, which tracks with the better-for-you movement that all food and beverages should be embracing right now, particularly in targeting younger consumers.”

The market for organic wine is indeed booming. According to Insight Partners, the North American organic wine market is projected to grow from $1.87 billion (as of 2022) to $3.89 billion by 2028, a compound annual growth rate of 13%.

Bowman agrees, adding that social media has transformed consumers’ ability to educate themselves and shape brands’ arcs in the process.

“Growing up with more access to social media, information, and greater transparency than any other generation has made Gen Z particularly adept at valuing authenticity and spotting phonies,” Bowman says. “You see this coming through in sales trends. It really helps if they discover a rich history, a real passion and a compelling story behind the winery and the wine.”

Ste. Michelle is putting its money where its mouth is, with 2,000 acres of estate vineyards certified sustainable through Sustainable WA and LIVE in Oregon. They also have an incentive programme in place with partner growers for them to achieve sustainability accreditation, and in 2023, they became a Silver Member of International Wineries for Climate Action.

Nothing about continuing to sell well in a challenging market is easy. But it’s not exactly rocket science either.

Keep it simple, keep it good

“The wine category is complex, but the formula for winning the consumer can be simple,” Theriault says. “Keep it easy to understand, make it taste good and meet consumers where they are in their consumption journeys.”