Short of a return to legal Prohibition in the U.S., I don’t think there is much the wine industry needs to worry about over the long term. Neither do those of us who love drinking good wine everyday…and great wine occasionally.
Of course, we should be concerned about health studies, including the bogus ones, concerned about too many people deciding to drink something other than wine or no alcohol at all, about Trump tariffs, about the no-drinking-is-safe-for-driving movement, and about the general slump in wine sales in the U.S. and across the world.
Be concerned, yes. But worried, no.
Naturally, individual winegrowers and other wine-related businesses may be in danger of not surviving. But, as cold as it may sound, winegrowing has always been like any other business, and survival is not guaranteed even in the best of times. We can hope those who fail will have first enjoyed a glorious romp in the sun.
But wine? Wine is a survivor.
The Fall of France. A recent front-page Financial Times article was headlined “French Red Wine Faces ‘Existential’ Fall as Youngsters Shun Alcohol or Opt for Beer.” The article reports consumption of red wine in France has fallen about 80 percent since the 1970s, according to the Bordeaux Wine Bureau (CIVB), and that total wine consumption in France is down by about 90 percent since 1945. Wow!
Yet “back then” was hardly a halcyon time for French producers.
As I wrote in an article entitled, “When Bordeaux was Broke” in The Drinks Business in 2023, the post-WWII years (particularly the 1960s) were dreadful times financially for Bordeaux producers in particular, with bad vintages, many bad wines, indifferent markets and over-production. It wasn’t until the late 1970s that the French wine renaissance as we know it today began. Whether I live in Paris or Delaware, I can now easily buy glorious, outrageously expensive French wine—or decent French wine for under $20.
In short, the French domestic market for cheap plonk dried up, a loss for farmers who were not able to adapt to the new economic and social realities, but could anyone argue that the French wine industry hasn’t flourished? I’m not saying there was cause and effect, but merely that if people want to buy good or great wine, they can do it and will into the future. Isn’t that what counts?
Turning of the Tide. There is no doubt that the tide is going out on wine sales in the U.S. Whether or when it will come back in, and at what force, is open to debate. The recent Silicon Valley Bank report thinks it may not happen before the end of the decade, if then. But the ocean isn’t going anywhere.
Valuation of a publicly traded company is almost always tied to growth, not to quality of earnings – the percent of income that is profits. Simply, how much more product was sold over the previous period? There are reasons for this yardstick. Businesses must keep up with the competition – market share is important – and they must reinvest in research and upkeep of its facilities.
But too often the market ignores good times and good management, and I argue that is the case today with the wine industry. While growth has fallen off, and while total production and consumption may never return to the heights of both pre- and immediately post-Covid, wine quality at all levels has never been higher, and our choices at all price and quality levels have never been better.
Look at the market for watches. Many of us who once wore a watch don’t do so now. A huge number of people under 40 have never worn one. Yet the demand for luxury watches of the highest quality has never been higher, and the same for vintage timepieces. Meanwhile, you can buy a reliable digital watch with a plastic band for practically nothing.
Not long ago I was talking to a California winegrower about the slump in wine demand. “There are people in the wine industry who never should have been winemakers,” he said, indicating they had not made wine at the right quality for the price, had not found the right market niche or didn’t have the sales acumen or resources to support their product. “The wine market has long needed an adjustment or shake-out, and we’re seeing it now.”
Wine Is Unhealthy, Even Deadly. I won’t argue that wine can be healthy, although I believe that can be the case. But I have seen enough medical research being done – during a former industry career – to know that trials can be designed to be “friendly” to whatever outcome the researcher is seeking. Almost all research on alcoholic beverages today is being financed and executed by people who don’t like wine, spirits and beers as a consumable product. You can look it up. And few researchers design trials to prove their thesis is wrong.
I personally am much more concerned about the health dangers of overly processed food (which I eat too much of) than I am about moderate drinking. But anyone who is very concerned about getting cancer or other major disease from drinking wine should certainly quit drinking.
At the same time, the argument “there is no safe level” is one of the most ignorant I have ever heard. I have been drinking wine for five decades with no traceable ill effects, so obviously there is a safe level for me. Each of us is prone genetically and by lifestyle to be affected by certain health dangers more than others, and no one health warning on what we eat or drink fits all of us. There are excessive levels, but there are also safe levels.
Even if additional dire warnings on wine labels are required, as proposed early this year, the industry will still be able to sell wines of all qualities and prices to those of us who want to drink and feel that it is safe to do so.
Let’s not prematurely start crying into our wine.
Global Warming – Yes, But. If it gets to the point where it’s too hot or too intemperate to grow quality grapes somewhere (England, Scandinavia, Patagonia, the Russian steppe!) at reasonable prices, then we have a lot more to worry about than drinking wine.
History Is on Our Side. Years ago, I attended a symposium in Tel Aviv celebrating Israel’s blossoming wine industry with its commercial vineyards stretching from the Negev Desert to the Golan Heights. Adam Montefiore, then a member of the wine Israeli trade, noted that all Israel vineyards were growing international grape varieties. “If you want to find indigenous Israeli grapes, you’ll have to go to Cyprus,” he joked, explaining that the vineyards celebrated in the Bible were totally eradicated during the reign of the Ottoman Empire.
But times changed, and Israeli growers reversed history and brought back grapes and wine. Just as American winegrowers reversed history after Prohibition.
Writers of the Purple Prose. I have watched in amusement when, with every vintage, my British colleagues declare the sky is falling as Bordeaux producers set their prices higher than the writers think the industry can handle. Dire things will surely happen!
First, if Château Latour sets its prices so high that no one wants to buy, why is that my concern? The market will say OK or not OK. Second, if Jeff Bezos or Elon Musk wants to pay $1,000 for a bottle of second growth wine, do they need me to warn them they’re being duped?
So, yes, we writers and drinkers would be remiss if we weren’t concerned about the multiple factors undermining wine consumption: health problems (real or imaged), the stupidity of Dry January, Trump tariffs (actual or threatened), the fact that some people may be depriving themselves of the joys of a really well-made wine, and / or the effects of climate change.
But it’s hard to solve problems when you’re wringing your hands.
Wine is a survivor.