Thursday, July 29, 2004

US consumption per capita vs. other wine-producing countries

How is it that the US, the fourth-largest global wine producer, ranks 35th in per-capita consumption? Countries with 3rd world level standards of living (Moldova, Uruguay, South Africa, Bulgaria, etc.) manage to consume more wine per capita. What drives US consumption to lag behind every other major wine producing country? What allows countries like Uruguay and the UK to consume more wine even after they have to import it?

I believe this is due to three factors:

1. Historical perception of wine in the US market
Long before the US became a major producer of wine, you could only get two kinds of wine here. Imported wines (French and Italian) that were expensive because its cost-prohibitive to ship wine in the bottle overseas, and poor-quality domestic wines (so-called "burgundy" and "chablis"). If you wanted decent wine, then, you had to pay for it. This reinforced the elitist image of wine that pervades the US unlike any other country. The rest of the wine-producing world sees wine as an everyday beverage because it is produced locally, at prices that are affordable. Hopefully, this has changed for the better in the US with increasing production of very affordable everyday wines.

2. High cost of wine domestically
Until the latest grape-glut (2001-2004), US wine prices were too high to encourage everyday consumption. The cheapest varietal wines of decent quality were $6 and up, well above a sixpack of similar quality beer or the per-drink cost of vodka. Wine-production techniques from Australia, coupled with an oversupply of grapes have encouraged producers to find more efficient ways to bring their product to market and have encouraged more competitive pricing. Fruit from the central valley of California that was once destined for Peter Vella in the box is now being crafted into higher-quality wines and creating new opportunities for profits at price points once untapped. Continued consolidation of production (Gallo and Constellation) will also continue to help prices.

3. Neo-prohibitionist sentiments in much of the US
Wine consumption is virtually non-existent in most of the midwest. Consumption, and therefore the focus of most wineries' salesforces, is centered around several major markets: New York, Los Angeles, Chicago, San Francisco, Miami, Dallas, Seattle, etc. Many in the "heartland" don't drink alcohol of any kind, let alone wine and many others drink only beer or hard liquor. Oddly, the consumption pattern in the US is very similar to the county-by-county election results in 2000:
The larger cities consume more wine per capita (which makes sense, as they tend to have better restaurants, more hotels, conventions, tourists, etc.).

The bottom line is that consumption trends need to change. In order for them to change we need more affordable wine options (which we are getting) and a different cultural attitude toward wine (which we have failed at). However, continuing trends like screwcaps and more whimsical brandnames are a start, albeit a start down a very long road. . . . .


Anonymous Harley said...

You need to investigate the data on consumption of wine in the Midwest. It is the fastest growing segment of the alchoholic beverage industry. The home-grown wine industry is the fastest growing segment of agriculture. Change is here, now!

December 10, 2009 12:07 PM  

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