On January 13th, IWSR issued a press release that pronounced “Wine Consumption in the U.S. Declines for First Time in 25 Years”. Past statements from IWSR suggest that the U.S. wine market was about 360 million 9L cases in 2019. However, based on available tax collection data, bw166 projects that the U.S. wine market in 2019 was 409 million 9L cases*, an increase of +1.1%. This discrepancy of 49 million cases is the equivalent of 588 million bottles of Wine.
Key Highlights of the U.S. Wine Market
- The market is highly fragmented with the TTB approving over 123,000 wine labels in 2019
- Due to this fragmentation, bw166 uses tax paid data to track the size of the U.S. Beverage Alcohol market accurately. Tax Paid Shipments is the only measure that adequately measures all products entering commerce – as it reflects the point at which suppliers recognize revenue on their financial statements.
- Traditional industry sources have reported on the Wine Market for several years. Looking at the trends of one of these Traditional Sources versus tax paid shipments since 2005 shows an interesting comparison and discrepancy.
- Tax Paid Shipments of Wine have had a CAGR of +2.6% per bw166 versus +1.2% per a traditional source
- As an additional point of comparison, bw166’s Tax Paid Shipment CAGRs for Beer and Spirits (flat and +2.4% since 2005, respectively) are nearly identical to those of the traditional sources, providing evidence that bw166’s methodology is sound and highlights the discrepancy in the traditional sources’ Wine numbers.
- One possible explanation is that these traditional sources are overly reliant on surveys and data of the largest suppliers and wholesalers and do not adequately capture the fragmentation in the wine market nor the evolving consumer landscape into channels such as DTC and private label products. For Beer and Spirits, where there is less fragmentation than Wine, that approach appears more accurate.
- One verification method bw166 uses is comparing theoretical excise tax collection with actual tax collections reported by the TTB. Generally, actual tax collections are slightly less than the theoretical tax collections due to small producer credits.
- As further verification of volumes entering the market, bw166 has been working on a project to look deeply at tax paid shipments by state. This project is over 90% complete, and the results are validating the national tax paid numbers.
- Please find a link to a short deck highlighting information on the U.S. Beverage Alcohol Market here. This deck also includes long term charts for volumes, share of servings, the bw166 Serving Index, and Consumer Spending on Beverage Alcohol.
* The bw166 wine data expressly excludes Cider but includes Table Wines, Sparkling Wines, Fortified Wines, Sake, Vermouth, and Other Wine (which includes Sangria, Wine Coolers, Wine Based Cocktails, and Wine with Fruit). This latter group accounts for only 17 million of the 409 million cases.
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