Consumption of Beer, Wine and Spirits Slows

SAN FRANCISCO—Consumption of certain alcohol drinks seems to be slowing, according to a report in the North Bay Business Journal. Experts at the 24th Vineyard Economics Symposium held recently at the Culinary Institute of America at Copia in Napa discussed that topic, as well as the changing tastes of U.S. consumers.

The buzz around non- or low-alcohol beverages and fast-growing categories, such as cannabis-infused beverages, is having an impact on the industry.

"Alcohol per-capita consumption in the U.S. is in a holding pattern,” said Jeff Nowicki, chief strategy officer of Bump Williams Consulting. He pointed to sobering statistics: Nearly half of wine consumers are making efforts to cut back on how much alcohol they drink.

“That’s over two-thirds of 21- to 23-year-olds we know we need to have in our arena,” he said. Also consuming less are those “occasional” consumers, who reach for wine at least once a month.

Of adult-beverage regular consumers, 46% want to consume less wine, 52% less beer and 48% fewer spirits, per IRI Consumer Network Panel data for 2018. According to the Wine Market Council, the amount spent on wine per household is up (1.4%) and the amount spent per trip is up (2%), but trips per buyer are down 0.6%, and the number of households buying wine has dropped 0.2%.

Households led by those age 21-34 are consuming more wine (12.6%) but spending less (down 0.4%), he noted. “If we lose this group totally, and we lose the group ahead of them totally, we’re going to continue to see some really dramatic drops in our business,” Nowicki said. He added that the wine industry needs to embrace cannabis-friendly consumers and suggested combining vaping with the tasting room experience.

The sales of spirits, wine and beer have been flat overall for the past several years, while cannabis beverages, such as nonalcohol wine and beer with buzz-inducing (THC) or non-halucinogenic medicinal compounds (CBD), grew 61% between September 2017 and September 2018, according to Headset, a hemp industry market research firm.

Cannabis beverages are gaining converts fastest among younger adults and women, Nowicki said. That growth could get a boost if federal regulators open the door to cannabis-alcohol blends. Currently, California and federal beverage alcohol regulators prohibit the mixture of cannabis compounds, even CBD, with adult beverages. In addition, ready-to-drink brands, Mexican beers, hard seltzers, low-calorie or low-carbohydrate drinks, and sparkling wine are attracting consumer attention.

Nowicki recommended the industry revive medical research from years past that connected moderate consumption—two glasses of wine daily—with healthfulness. “Fact is, we’ve given up on talking about something that is very important for the industry,” he said.