Organic Wines for Earth Day 2022
Organic Wine Sales in the US Will Continue as a Major Part of Industry Growth in 2021
Organic wine sales in the US are set to be stronger than ever in 2021 across all channels from retail to restaurant and online. As the country slowly begins to open up, consumers are ready to toast to a return to normalcy. Combine that with a host of delayed weddings and other special celebrations, concerts and other events starting up again, the stage is set for wine growth like never before. With that comes a renewed sense of a “better for you” movement, especially among the newest generations of wine drinkers both in the Millennial and Gen Z cohorts.
In the State of the Wine Industry Report 2021, author Rob McMillian takes a look at many factors that will help to get the wine industry to continue its exponential growth throughout 2021 and beyond. This includes paying attention more than ever before to the generations who are really just beginning to learn about and appreciate wine:
“While the average age of wine drinkers continues to grow older, the neglected growth opportunity is selling to younger consumers, who have different values, are more health-conscious, have lower discretionary income and wealth, and are more ethnically diverse than previous generations.” – Rob McMillian
Baby boomers, with 70 percent of the disposable income and more than 50 percent of wealth in the US, are still the largest consumers of wine today. But as of this year, with only a single percentage point separating their consumption share from that of Gen X, they can’t be considered the dominant group. Consistent with our forecast in this report starting in 2016 and each subsequent year, boomers should cede their top spot to the Gen X cohort in 2021. The Millennial cohort is the largest growth opportunity for the US wine industry but has just started to show interest in the wine category.”
Organic Wine Sales Set to Lead the Way
Though wine (and all alcohol) flew off the shelves during lockdown, overall sales in 2020 were actually flat as compared to 2019. According to McMillian: “2020 began with declining volume measures and discounting due to an acute oversupply of wine and overall flattening consumer demand. March lockdowns moved consumers to a panic-buying phase for wine, spiking wine sales growth above 60 percent. By the end of the year, total wine sales were about even with the prior year.”
However, organic wine sales continued to be strong. In the article “Category on the Rise: Natural, Organic and Biodynamic Wine,” published in BevAlc Insights by Drizly, sales of these “better for you, better for the planet” wines have been growing at a much faster rate than overall wine sales for the past several years, and show no sign of slowing:
“Nielsen data show that off-premise sales of organic and biodynamic wines have surged during the last four years. For the 52 weeks ending March 20, 2021, organic wine sales totaled $154 million, compared to just $27.2 million for the 52 weeks ending March 25, 2017. Year-over-year, organic wine sales increased 21 percent by value and nearly 17 percent by volume.
These gains come as no surprise to Edward Field, owner and president of Natural Merchants, an Oregon-based importer of natural wines from Europe and South America. Now in its 17th year of business, the company specializes in organic, biodynamic, vegan, and no-sulfites-added (NSA) wines.
“2020 was one of our best years yet, with an increase in sales of 28 percent over 2019. Now that the world is starting to open up again in the wake of Covid-19, sustainability is more top-of-mind than ever before, and eco-aware consumers are looking to continue taking care of themselves as well as the planet.” – Edward Field
In particular, Field has seen increased interest in vegan wines. ‘Vegan wine as a category has shown tremendous growth, seeming to mirror the growth of consumers adopting a vegan diet,’ he explains. ‘Retailers nationwide are looking to extend their offerings, and vegan wine sections are popping up in stores across the country, alongside their existing organic and Biodynamic offerings.’ ”
The Future is Bright for Online Wine Sales
The shift to how consumers purchased wine, especially the Millennial and Get Z demographic, was more the story of 2020. According to McMillan: “With consumers sheltering and working from home, online sales became important for all alcohol producers… We believe there is a permanent consumer shift to more online purchases of wine, which will expand with the coming of age of millennial consumers.”
Retailers and restaurants, as well as wineries themselves, have been grappling with how best to get wine to consumers directly. Those who jumped on board the e-commerce train were able to stay afloat during the unprecedented times, and the trend of online orders and delivery seems to be here to stay.
According to McMillan: “While some permanent consumer changes are hard to forecast, one in particular is quite easy: Large numbers of consumers will incrementally grow in their desire to shop online as their preferred means of shopping. Online selling is, without question, the change agent that will deliver the greatest transformation to wine sales over the next decade. Online sales might represent 20 percent of alcohol sales in the next decade or sooner.”
Organic Wine Sales Continue to Grow Across All Channels
Hand selecting grapes at Biodynamic Vina Koyle in Chile.
From where we stand, all indications point to the continuation of robust organic wine sales. Retailers are continuing to expand their online presence and all sectors are focusing more than ever on their ever-growing eco- and health-conscious consumer base.
“We are projecting a 30 percent increase in sales this year and are on track to meet or surpass that goal,” says Field. “More and more mainstream grocery chains are expressing interest in the entire organic wine category, including biodynamic.”
We also see a trend in regions and countries embracing organic and sustainable wine practices. From Bordeaux to Chile, sustainability in the vineyard has taken a front seat in 2021. As wine producers themselves become more transparent about both their farming and winemaking practices, Drizly expects the demand for natural wines to continue to grow as well.
“As consumers express more interest in what is in the wine they are drinking and how it is produced, brands will put more emphasis on creating clarity in their marketing,” says Liz Paquette, Drizly’s head of consumer insights. “We predict consumers will increasingly reach for natural brands and bottles as they seek more transparency and ‘better-for-you’ wines that are also better for the environment.”
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