Wine Trends From 2023: A State of the Union
What do some of the wine industry trends from 2023 tell us moving forward? How does the central coast fit into all this?
With 2023 firmly in the rearview mirror, we’re taking the opportunity to do a state of the union of sorts on the wine industry as it currently stands. We’re covering all the trends, news, and data that we could find on what the industry currently looks like, both at large and, more crucially to us, along the central coast. We also make some predictions for the coming year.
Wine State of the Union: 2023
Acquisition Spree
If there’s one big item to lead with from 2023 it has to be the group of acquisitions that occurred. While larger wine brands acquiring more boutique offerings hasn’t been unusual in past years, some of the acquisitions in 2023 were markedly large and the central coast took center stage for many of those.
In Paso Robles we saw Daou get snatched up by Treasury Wine Estates for $1B (!!) and Hahn Family Wines get bought out by Gallo for an undisclosed sum, although one could surmise that it’s close to the price tag of Daou considering the similar levels of case production.
In Santa Barbara, Brewer Clifton was bought by Jackson Family Wines which, in addition to their Cambria and Byron properties, expands their central coast portfolio. Buttonwood Estates ended up selling to TMC Hospitality Group and will continue to develop the property. Lastly, Presqu’ile bought roughly 1K acres in the Sta. Rita Hills and we’re excited to see the wines that come out of that acquisition.
All of this points to a trend that was already well underway prior to 2023 and is still heating up: big brands want access to premium wines. The days of big branded wines seems to be declining while “boutique” brands are in (and there’s much more on those trends below).
Aging Consumers
The most concerning piece of data coming out of 2023 is the continued lack of adoption of younger consumers towards wine. Beer and cocktails continue to dominate the mindshare of consumers under 35. While it may seem natural for consumers to begin to purchase more wine as they age, the trend line shows that younger consumers are not adopting wine at the same rate as older generations. This phenomenon largely explains the next trend…
Up and to the right?
Overall, wine sales trends across the country are negative… for the third year in a row. While there was a bump in sales during 2020 due to COVID, the overall decline is part of a long running pattern that started in the mid 2000’s. It’s not an ideal situation, especially when coupled with the lack of young consumers.
It’s not all bad news though. Higher priced bottle purchases ($20 and up) is actually growing quite dramatically. This helps explain some of the acquisition sprees the last few years. While inflation may play a minor role in this, it still appears that it’s the premium brands that are drawing more consumer attention. Additionally, the fastest growing segment of consumer sales for individual wineries is direct to consumer. This continues the strong trend that started in 2020.
Lastly, when it comes to average spend per consumer when visiting a tasting room, Santa Barbara ranks as one of the lowest spends per consumer while Paso Robles is in the middle of the pack. This is a bit surprising considering the effort behind marketing the Santa Barbara region at large as a premium wine destination the last few years, not to mention its proximity to LA.
Predictions for 2024
Let’s quit looking back and look at what we think may happen over the next year.
Consumer demand continues to soften: Continuing the longer trend, it seems almost inevitable that consumer demand and sales will continue to soften. This seems even more likely considering we’re just getting inflation under control and interest rates could remain high for a prolonged period of time.
Average bottle prices continue their upward march: This has more to do with increasing wages than inflation. Workers are demanding high pay and this will ultimately be reflected in the bottle prices passed onto consumers.
Further Consolidation: This could come in the form of an outright acquisition of a brand or the acquisition of vineyards along the central coast. This is driven primarily by climate, but also by the attractiveness of smaller premium brands.
Italian varietals popularity grows: There’s been a slow rise in popularity and planting of various Italian varietals. We love seeing more diversity in wines being planted and think consumers will want to branch further out from the popular staples.
If you’re interested in reading the full reports that we used to condense some of these insights head to the links below.
SVB State of the Wine Industry
Uncorked
Timbre Supergroup Pinot Noir
Timbre Winery is based in San Luis Obispo and focuses on minimally invasive winemaking techniques. This supergroup pinot noir is sourced from 5 of the best Pinot Noir vineyards along the coast: Gold Coast, Pali, Mission Ranch, Riverbench, and Spanish Springs Vineyards.
Nose: raspberry, cherry, cedar
Palette: oak, cherry, blackberry, smoky finish
Pairs well with: anything with bacon in it, beef ribs
Available at: many grocery stores, Timbre tasting room, Goodland Wine Shop in Goleta
What’s Happening
BINGO Night at La Lieff Wines: Head to the Funk Zone in downtown Santa Barbara tonight, Wednesday, January 10th, to win wine and merch from La Lieff from 5-6 PM.
Oysters and Wine Pairing: “On Saturday, January 13 Margot from Flying Colors is back with an oyster tasting paired with [6 different] wines other than the predictable lineup of sparkling wines.” This event is at WineSneak in San Luis Obispo for only $35/ticket from 3-5 PM.
WineSneak is also having an epic “Damp January” sale. Every day they are highlighting a different wine on their online shop for 15% off! The wines are available at the discount through the end of the month, while supplies last.
Tercero Winemaker Dinner at Black Sheep: Join Larry Schaffer of Tercero Wines at Black Sheep in Santa Barbara on Thursday, January 18th. Tickets are $150 and include a multi-course dinner and wine to pair. (P.S. If you need some convincing to attend check out our full interview with Larry last year.)
Stars of Cabernet: Calling all Cab lovers! The 14th annual Cab event is Thursday, January 25th in Beverly Hills and features the absolute best Cab that California has to offer. Tickets start at $150 and go up in price on January 20th, so buy now!