U.S. Wine Market Size, Share & Trends Analysis Report By Product (Table Wine, Dessert Wine, Sparkling Wine), By Distribution Channel (On-trade, Off-trade), And Segment Forecasts, 2022 - 2030

Report Overview

The U.S. wine market size was valued at USD 63.69 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 6.8% from 2022 to 2030. Wine consumption has become a sign of social status, especially among the millennials and young generation, which is driving the market. Wine sales have surged across the U.S. owing to innovation in flavor, color, and packaging of the product. Furthermore, the continued importation of high-quality wines into the U.S. is likely to sustain a solid customer base and propel market growth in the near future. The emergence of COVID-19 triggered a worldwide catastrophe, on a scale never seen before. Aside from endangering human health and life, the pandemic had a significant detrimental influence on companies all around the world. However, not all industries have been equally affected. While the great majority of on-premises stores were required to close during the start of the pandemic, the off-trade wine business in the U.S. has enjoyed good sales. The COVID-19 pandemic has led many people to use e-commerce for day-to-day operations as well as for ordering alcohol, thus driving the off-trade distribution channel segment.

Many manufacturers prefer to purchase grapes in large quantities from local vineyards for wine production to create a product at a reduced price. Further, locally made wine has also been gaining traction in the U.S. owing to consumer demand for organic and natural products. Though organic wine is still a niche segment in the overall wine category, its production and consumption have increased in recent years due to rising consumer awareness regarding health and wellness. Further, some manufacturers think that organic is a necessity for their business growth.

Mergers, acquisitions, and consolidation have been occurring among wineries worldwide. For instance, in September 2021, Justin Vineyards & Winery announced that it has acquired Lewis Cellars. It makes around 9,000 cases of wine per year and is known for high-end wines such as Cabernet Sauvignon, Syrah, Merlot, Sauvignon Blanc, and Chardonnay. According to National Wine & Spirits, Inc., regarding distribution, the 20 largest wholesalers control 70% of the U.S. distribution. Large distributors enjoy economies of scale and can pass some of their lower costs to the retailers, thus increasing the total efficiency of the supply chain.

Companies are increasingly focusing on producing new products to gain market share in the world. For instance, in May 2020, E. & J. Gallo Winery announced the launch of Maison No.9, a new French rosé, created and developed by Post Malone, a Grammy-nominated record artist, in partnership with Global Brand Equities and Dre London. E. & J. Gallo Company has exclusive distribution and sales support for the brand. Maison No. 9 has been made available in shops and online since June and will be sold exclusively by E. & J. Gallo Winery. Gallo offers a world-class distribution network as well as sales skills for one of the most diversified portfolios of wines and spirits, ranging from category leaders to boutique luxury bottlings.

The increasing production of wine, supported by the growing cultivation of grapes, can prove to be harmful to the environment owing to its questionable sustainability. The environmental impact of production is a global cause for concern as most vineyards are monocultures that rely significantly on preventive spraying of herbicides, fungicides, and pesticides to keep disease and pests at bay. The widespread spraying of pesticides has been diminishing insect and bird populations, while the intensive use of herbicides and fungicides contaminates groundwater and degrades the soil, making it even more dependent on fertilizers. This could restrain the market growth.

Product Insights

The table wine segment led the market and accounted for a revenue share of over 80.0% in 2021. It is one of the oldest and most common types of alcohol consumed in the U.S. The availability of true table wine with a premium appeal to customers, easy availability, and affordable prices have resulted in increased sales in the U.S. Furthermore, it is expected to continue growing due to the increased consumption of liquor and the rising demand for it as a celebration wine.

The sparkling wine segment is anticipated to expand at the fastest CAGR of 7.7% from 2022 to 2030. The market is likely to be driven by a rise in the consumption of champagne and prosecco. In addition, manufacturers have offered a diverse selection of low-cost items in the sector category, which has played a significant role in driving the segment. Furthermore, sparkling wine is expected to grow fast due to the benefits it provides to the heart and skin. It also helps to improve gut health and digestion as it contains polyphenols from red grapes, which promotes the growth of good gut bacteria.

Distribution Channel Insights

The off-trade segment held the largest revenue share of over 80.0% in 2021. Offering a variety of products at lower prices as compared to on-trade channels has increased the popularity of retail counters across the U.S. An off-trade distribution system is one of the most effective sales methods for delivering a product to the market. Supermarkets, convenience shops, specialty stores, and other retailers are examples of off-trade channels. Some of the popular stores in the U.S. are Walmart, Kroger, Costco, and Publix. Offering a wider range of items at lower prices than traditional trade channels has expanded the appeal of these stores.

The on-trade channel is projected to register the fastest CAGR of 10.0% from 2022 to 2030. The demand through on-trade channels was severely impacted during the COVID-19 outbreak as pubs, bars, and clubs were closed owing to the fear of the spread of the virus. Further, there was a significant drop in international tourism caused by the strict lockdown measures. However, as the economy is opening, consumption is increasing and is likely to grow at a faster rate than off-trade channels. Millennials and youth have started to socialize like before and tourism is also gaining pace, which is likely to positively impact the segment growth.

Key Companies & Market Share Insights

The market includes both international and domestic participants. Key market players focus on strategies such as innovation and new product launches to enhance their portfolio offerings in the market. For instance, in March 2021, Constellation Brands announced that it has awarded Southern Glazer’s Wine & Spirits distribution of 70% of its wine and spirits portfolio in the United States. The agreement came into effect on April 1, 2021.

In another instance, in March 2021, The Wine Group purchased Beringer Main & Vine, Beringer Founder’s Estate, Coastal Estates, and Meridian for USD 77 million from the wine conglomerate Treasury Wine Estates. Moreover, in January 2021, E. & J. Gallo Winery acquired a portion of Constellation Brands’ wine and spirits portfolio at an aggregate transaction value of approximately USD 810 million. The acquisition entails over 30 brands held by Constellation. Some prominent players in the U.S. wine market include: -

• E. & J. Gallo Winery

• Pernod Ricard

• Deutsch Family Wine & Spirits

• Trinchero Family Estates

• Constellation Brands, Inc.

• Accolade Wine

• Bronco Wine Company

• Castel Frères

• The Wine Group

• Casella Family Brands

U.S. Wine Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the U.S. wine market report based on product and distribution channel:

• Product Outlook (Revenue, USD Million, 2017 - 2030)

  • Table Wine

  • Dessert Wine

  • Sparkling Wine

• Distribution Channel Outlook (Revenue, USD Million, 2017 - 2030)

  • On-trade

  • Off-trade