The annual Silicon Valley Bank Wine Report is out, and as always, it’s full of robust information detailing the state of the industry to a tee. So what what are the trends that will be impacting the everyday wine consumer? Here are our top three:
- Red blends are hot. While Cabernet Sauvignon is still the fastest growing varietal, younger consumers are open to red blends. Naturally, the value for winemakers to churn out more red blends is clear. They have the flexibility to swap varietals in and out based on harvest yields and quality, and they can also add their own unique branding and blend names to help the bottles pop on shelves.
- Cheap wine will get cheaper. Demand for wines $9 and below has been weak due to changing consumer preferences, particularly amongst Millennials. The only saving grace for low-end wines is tetrapaks: wine giants (Constellation, Delicato, Gallo) repackaged these wines into 3-liter boxes that have been immensely popular with consumers. Otherwise, expect price cuts to drive $9 and below bottles lower.
- Premiumization continues. Unfortunately for us, that means wines in the $12-25 price point will continue to rise. This trend has been a long time coming, and it hasn’t stopped. There’s a finite supply of quality land to farm premium wines, and Millenial purchasing power is on the rise.
View the full Silicon Valley Bank report here.