Small California Wine Producers in 2019: An Industry Note

Abstract

After 25 years of rising wine sales, 2019 revealed that growth was slowing. An oversupply of grapes and finished products, coupled with diminishing sales volumes and shifting buyer preferences, were impacting smaller California wine producers. Additionally, wine marketing in the U.S. focused primarily on the Baby Boomers, the large and affluent generation that has been the main wine consuming cohort over the last 25 years. But, as the Baby Boomers hit retirement age, their wine purchasing is moderating in both price and volume. Can winemakers shift their selling strategies from the Baby Boomer to the Gen X, and subsequently, the Millennial generations? The product-focused approach that led to success with the Baby Boomers might not be enough to cater to the likes of Gen Xers or the Millennials, as the younger generations have very different consumption patterns, preferences, and values. Branding is likely to remain important, but the tactics to attract and appeal to younger buyers is changing. How will wine producers appeal to the three different cohorts as they move through their respective life stages?