The Crush February 2023 - 2

to the number four white at 3.6 percent, down from 4.3
percent in 2021. Next came French colombard at 3.1
percent, up from 2.4 percent in 2021. " Other whites "
were 4.4 percent of sales up from 3.8 percent in 2021.
Bitter summarized, " The winegrape market might be
frustrating in 2023, running hot and cold, up and down,
and start and stop. " He observed, " An above-average
crop can still cause market disruptions and will likely spur
more vineyard removals. " On a positive note, he said,
" Opportunities exist side-by-side with challenges. "
Danny Brager of Brager Beverage Alcohol Consulting,
shared data indicating total alcohol beverage
consumption is flat or declining globally and in the U.S.
and across most age groups, while at the same time,
consumers have many more product choices and places
to buy. " Servings per capita are relatively flat, but spirits
are expanding their market share, and the growth gap
between spirits sales and wine sales continues to widen, "
Brager said. However, he said the U.S. market share
of California-produced wines is generally expanding
or flat across price tiers and varietals, except sparkling
and rose' wines, based on 2022 NielsenIQ data for offpremise
Brager said 18 percent of wine drinkers drink only wine,
but 18 percent of wine drinkers also drink spirits and
beer and should be a bigger target consumer for wine
sales. Premiumization still is, and will be, a driver of
long-term growth, but the rate slowed in 2022. Growth
continues above $11/bottle, but continues to decline
at lower prices. COVID accelerated DTC growth, but
DTC fell back to more traditional growth levels in
2022. The on-premise market is recovering, but is still
below pre-COVID levels, and wine share lags behind
beer and spirits. On the positive side, wine is viewed
by consumers as a healthier alcoholic beverage, and
sales of organic, better for you brands, and lower/noalcohol
wines are rising but from a much lower baseline.
Brager advised the industry to extend off-ramps to
older consumers and build on-ramps to new consumers,
especially younger and multicultural consumers. " Our
key demand challenge is having younger consumers
choose wine on more occasions, " he said.
Providing a California overview with a focus on the bulk
market, Greg Livengood of The Ciatti Company, said,
" California's inventory level is higher than at this time
last year, and although much of the market is in balance,
this is not true for all regions and varietals. " He noted
that domestic market wine sales volume continues to
show signs of weakness. Premium wines have seen
moderate growth but value-end wines are struggling
For the 2023 grape market, early buying activity is
sporadic, although there is stronger activity for certain
varieties from specific areas (Sonoma chardonnay and
pinot noir, and Napa whites and cabernet sauvignon.)
Page 2 | February 2023
" Growers and buyers are facing inflation and margin
pressure at all levels (labor, supplies, transportation,
etc.) but it's also hard to raise shelf prices, so everyone
is feeling the squeeze, " Livengood said. He concluded,
" We're fortunate we had three consecutive short harvests
that allowed us to back into the relative balance we
have. "
Dr. Liz Thach, Master of Wine (MW) and Distinguished
Professor of Wine and Management, Sonoma State
University, listed major drivers of future market change:
demographics, economics, environment, social trends,
technology, and regulation. She suggested opportunities
to connect with future wine consumers.
Connect with younger multicultural consumers. Thach
said, " The reason younger, multicultural consumers do
not drink wine is because they do not like the taste. "
She suggested producing " gateway " wines that taste
attractive to these consumers. Positive first experiences
are often with sweeter wines. Historically, such wines
were white zinfandel, riesling, and chenin blanc, and
more recently, moscato, sweet reds, and sparkling wines.
Use inclusive ads with younger, multicultural consumers,
and create lifestyle linkages to occasions and activities.
Thach also suggested enhanced loyalty efforts with older
consumers, still a higher consuming demographic, and
noted that by 2040, one in five Americans will be over
65. Update loyalty programs, expand DTC wine club
options, provide thank-you gifts to loyal customers, and
solicit feedback about desired changes, she suggested.
Incorporate growing consumer desire for transparency
in food and beverages by being an early adopter of
ingredient and nutritional labeling; add info or a QR
code to the label to link to more detailed information;
and use positive, honest terms on the label such as
no-sugar-added, only 120 calories, etc. Engage the no/
low alcohol consumer by promoting rose' and sparkling
wines that are already lower in alcohol and consider
offering varietal grape juice. Bottled pinot noir and
chardonnay grape juice are popular products from
Navarro Vineyards, for example.
Global Warming-Consider new grape varieties that
are more heat and drought-tolerant, and new growing
regions better suited for some varieties given climate
change impacts.
Sustainability- " 80 percent of U.S. consumers consider
sustainability in their purchasing decisions, and 75
percent of millennials will pay more for environmentallyfriendly
products, " Thach said. She advised including
info on labels/packaging, explaining certifications, and
having a sustainability tab on the company website.
Use technology to create new purchasing experiences
(virtual tasting options, more mobile and online
shopping options, etc.) and use technology for smart/
intelligent packaging.

The Crush February 2023

Table of Contents for the Digital Edition of The Crush February 2023

The Crush February 2023 - 1
The Crush February 2023 - 2
The Crush February 2023 - 3
The Crush February 2023 - 4
The Crush February 2023 - 5
The Crush February 2023 - 6
The Crush February 2023 - 7
The Crush February 2023 - 8
The Crush February 2023 - 9
The Crush February 2023 - 10