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America Drank Less Wine for First Time in 25 Years

America’s love affair with wine is waning.

Americans bought less wine last year, the first such drop in a quarter of a century, as millennials opt for alternatives like hard seltzers, cocktails and nonalcoholic beer.

The volume of wine purchased in the U.S. declined 0.9% in 2019, the first time it has fallen since 1994, according to industry tracker IWSR. The trend was ascribed to a generational shift as the number of millennials surpasses baby boomers, who drove strong demand for wine in America.

“Millennials are just not embracing wine with open arms compared to previous generations,” said

Brandy Rand,

IWSR’s chief operating officer for the Americas. “With the rise in low and no-alcohol products and general consumer trends toward health and wellness, wine is in a tough place.”

Sales of wine under $10 a bottle have recently made up most of the category—but have fallen in recent years, offsetting a rise in more expensive bottles. Lower-priced wines are more likely to be drunk more quickly rather than stored, one reason IWRS believes its data show a drop-off in consumption.

Overall, U.S. wine sales by value rose 1.1% from a year earlier to $38.3 billion.

The figures highlight how changing demographics and tastes are affecting the alcohol industry. Americans have drunk less alcohol in recent years amid rising concerns about health and competition from other beverages such as ready-to-drink tea, sparkling water and coffee. In 2019, the nation drank 0.3% more alcoholic drinks, after two years of annual declines.

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The Wine Institute, a California trade body, said while consumption has fallen off in recent years, it expects millennials to start drinking more wine as they get older, just like baby boomers did. It said its own figures don’t align with IWSR’s and show wine volumes grew last year. IWSR said its data show consumption and not shipments to distributors, which the Wine Institute measures.

For decades, wine benefited from the theory that drinking in moderation—particularly red wine—was good for the heart. More recently, studies have disputed that finding, suggesting any amount of alcohol can raise cancer risks and that the benefits of drinking are more limited than once thought.

And baby boomers are drinking less because of lower disposable income, smaller homes—making wine harder to store—and health concerns, said IWSR.

Many baby boomers, typically considered people born between 1946 and 1964, are loyal to specific brands or categories, sticking mainly to wine or beer, but millennials tend to drink across categories, said IWSR’s Ms. Rand. The industry tracker’s data show a U.S. preference for strong, smoky and sometimes spicy flavors, a trend illustrated by the popularity of mezcal, volumes of which grew 40% last year. The flavor choice offered by wine, compared with spirits and craft beer, has remained “relatively stagnant,” Ms. Rand said.

For 2019, volumes of ready-to-drink products consumed rose 50%, driven by hard seltzers and canned cocktails, according to IWSR. Spirits volumes grew 2.3%, helped by mezcal, tequila, cognac, bourbon and other whiskey. Beer continued to decline, falling 2.3%, as demand keeps ebbing for big domestic brands such as Budweiser. Craft beer volumes increased 4.1%, while low and no-alcohol beer climbed 6.6%.

Wine could be further hit by U.S. tariffs on European imports. The U.S. last year levied a 25% tariff on bottled table wines from France, Germany, Spain and the U.K., and has threatened further measures.

Staci Garcia,

a 47-year-old Realtor based in Boca Raton, Fla., recently stopped buying wine after noticing she felt unwell after drinking it. “I’m going to stay away from wine while I attempt to lose weight,” Ms. Garcia said. “I don’t miss wine like I thought I would.”

Some big companies are selling off mass-market wine brands and doubling down on high-growth areas.

Constellation Brands Inc.

—which owns Robert Mondavi wines, the Prisoner Wine Co. and Ruffino—is selling a string of its low-margin wine brands so it can focus more on its premium products. Last year it said virtually all growth came from products priced $11 and higher.

Diageo

PLC has also sold most of its wine brands.

Winemakers are also selling more in cans and cartons. Traditional wine bottles don’t lend themselves to casual outdoor drinking, or consumers wanting a single glass—a problem given more Americans live alone than in the past, according to Census Bureau data.

As more people cut back on booze, non-alcoholic breweries, bars and spirits alternatives and are popping up to give the so-called sober curious a range of options beyond conspicuous non-consumption. Photo: Adam Falk/The Wall Street Journal

Wine could see a boost from online shopping. IWSR forecasts U.S. online alcohol sales to rise from $3 billion in 2019 to $13.4 billion by 2024. Sales have so far been driven by wine, which has fewer state-level restrictions than other drinks. San Francisco-based online wine retailer Wine.com said its revenue rose about 16% last year and that millennials are about a third of its customers.

“The old way of buying wine where you’re standing in front of a wall at retail with nothing to go on but labels, that’s not good enough for this generation,” said

Rich Bergsund,

Wine.com’s chief executive. The site allows customers to chat with sommeliers and watch videos before they buy.

Mr. Bergsund said millennial customers spend as much on a bottle as baby boomers, with the average selling price per bottle on the website being $30. They currently buy less often, which he expects to change over time. “It’s a very predictable pattern, spend more on wine as you go through life.”

Write to Saabira Chaudhuri at [email protected]

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