What Is Happening to Premium Wine Demand and What Every Spirits Brand Should Pay Attention To

Every year Silicon Valley Bank publishes its State of the Wine Industry report and every year the beverage industry pays close attention. The 2023 edition delivered a finding that deserved more discussion than it got outside of wine circles: consumers younger than 60 now have a lower share of wine consumption than they did in 2007. Meanwhile consumers older than 60 are the only demographic where wine consumption is actually growing.

That is not a blip. That is a structural demographic shift playing out in real time, and its implications extend well beyond the wine category.

For anyone building or investing in a premium beverage brand in 2023, the wine demand story is one of the most instructive data sets available. Not because wine's challenges are unique to wine, but because wine is far enough into the cycle that the pattern is visible and legible in ways it is not yet in spirits and other categories that are earlier in the same dynamic.

What the Wine Data Actually Shows

The premium wine market did not collapse in 2022 or 2023. That is important to say clearly because the nuance matters. What happened is more subtle and more consequential than a collapse.

Premiumization in wine slowed. Older consumers, those over 60, continued to trade up and pay more for premium bottles. They have the disposable income, the established palates, and the consumption habits that make premium wine a durable part of their spending. That segment held.

What did not hold was the engagement of younger consumers. Consumers under 40 were not just buying less wine. They were increasingly indifferent to the category altogether. They were not trading down from premium wine to value wine. They were trading out of wine entirely into spirits, RTDs, and in growing numbers into non-alcoholic alternatives. The category was not losing them to a cheaper version of itself. It was losing them to categories that felt more relevant to who they are and how they want to drink.

The Bordeaux market made this even more visible. Bordeaux, the most prestigious wine region in the world, entered 2023 with unsold inventory, softening secondary market prices, and serious conversations among producers about cutting release prices by 30 percent or more just to stimulate demand. When the wine with the most storied brand equity in history is having trouble moving product, the signal it sends about the broader category is worth taking seriously.

Why Younger Consumers Are Moving Away From Wine

The reasons younger consumers are disengaging from wine are worth understanding specifically because they are not primarily about price.

The first reason is complexity without accessibility. Wine has a steep knowledge barrier that many younger consumers find unwelcoming rather than intriguing. The vocabulary, the regional knowledge, the vintage variation, the scoring systems -- these create a category that feels like it requires homework before you can participate confidently. Spirits, RTDs, and the non-alcoholic category have generally done a better job of creating entry points that do not require the consumer to feel educated before they feel welcome.

The second reason is identity. Younger consumers choose beverages that say something about who they are. Tequila says something. Craft spirits say something. Liquid Death says something. A bottle of Bordeaux says something too, but it says it to an older consumer who grew up with that cultural vocabulary. For a 28-year-old in 2023, the identity signal that premium wine sends is not necessarily the one they want to broadcast.

The third reason is occasion. Wine is heavily indexed toward the dinner table and the restaurant setting. Younger consumers are drinking differently, at concerts, outdoor events, casual gatherings, and in formats that travel easily. The category's packaging and occasion associations have not kept pace with how that consumer actually lives.

What Spirits Brands Should Take From This

The wine category's challenges are a preview, not a unique pathology. The same demographic forces that are reshaping wine consumption -- younger consumers disengaging, older consumers holding the category together, premiumization dependent on a narrowing demographic base -- are present in varying degrees across beverage alcohol.

The spirits category is in a better position than wine right now primarily because tequila, whiskey, and RTDs have done a more effective job of building relevance with younger consumers. But that relevance is not automatic or permanent. It has to be earned and re-earned with every new cohort of legal-age drinkers who have more choices than any generation before them.

The specific lessons worth carrying into spirits brand strategy are these.

Accessibility is not the same as dumbing down. The wine category's complexity barrier is partly inherent to the category and partly the result of decades of marketing that prioritized connoisseurship over welcoming new consumers. Spirits brands that make it easy for a new consumer to understand what they are buying, why it is good, and how to drink it without feeling ignorant are building something more durable than brands that assume knowledge the consumer does not yet have.

Identity alignment is not a marketing add-on. It is the product. The brands gaining share with younger consumers are the ones that have thought clearly about what choosing their brand says about the person who chooses it. That is a brand strategy question that has to be answered at the foundation, not solved with an influencer campaign after the fact.

And occasion expansion is one of the highest-leverage investments a beverage brand can make. Wine's over-indexing on the dinner occasion is part of what constrains its younger consumer growth. Spirits brands that actively build their brand around a range of occasions, not just the glass at dinner, have a significantly broader addressable consumer base.

The Bigger Picture

The wine data is ultimately a story about what happens when a category stops renewing its consumer base and begins to rely on the loyalty of an aging cohort. It is a slow process and it does not look like a crisis until it is well advanced. The brands and categories that avoid this outcome are the ones that do the work of building relevance with the next generation of consumers before they need to.

That is one of the most consistent conversations we have at Liquid Opportunities with founders thinking about where their brand sits in its category's long-term trajectory. The time to build relevance with a new consumer cohort is before the existing one ages out, not after.