U.S. Wine Market Size, Share & Trends Analysis Report By Product (Table Wine, Dessert Wine, Sparkling Wine), By Distribution Channel (On-trade, Off-trade), And Segment Forecasts, 2024 - 2030

U.S. Wine Market Size & Trends

The U.S. wine market size was estimated at USD 81.33 billion in 2023 and is expected to expand at a CAGR of 5.4% from 2024 to 2030. Wine sales have surged across the U.S. owing to innovation in its flavor, color, and packaging. Beyond the classic wines, niche markets and emerging wine regions are gaining prominence. Regions like Willamette Valley located in Oregon, Finger Lakes located in New York, Santa Rita Hills located in California, and Columbia Valley are carving out niches with their distinct offerings. Indigenous grape varieties, innovative winemaking techniques, and unique terroirs are captivating adventurous palates.

Evolving consumer tastes and preferences play a significant role in shaping the U.S. wine industry. Consumers are increasingly seeking diverse and unique wine experiences, leading to a growing demand for a variety of wine styles, including organic, biodynamic, and sustainable options. The millennial demographic has a considerable impact on the wine market. This group tends to value authenticity, sustainability, and unique experiences, driving the demand for wines that align with these preferences. Millennial consumers often explore new and niche varietals, contributing to the diversification of the market.

The rise of wine tourism emerges as a noteworthy factor boosting the U.S. market, with consumers expressing a growing interest in immersive experiences such as vineyard visits, tastings, and insights into the winemaking process. Wine regions, in turn, benefit from the favorable economic impact generated by the influx of tourists.

Many manufacturers prefer to purchase grapes in large quantities from local vineyards for wine production to create a product at a reduced price. Locally-made wine has also been gaining traction owing to the rising consumer demand for organic and natural products. Though U.S. wine is still a niche segment in the overall wine category, its production and consumption have increased in recent years due to rising consumer awareness regarding health and wellness. Furthermore, some manufacturers are of the opinion that organic practices are a necessity for their business growth.

Mergers, acquisitions, and consolidation have been occurring among wineries worldwide. For instance, in October 2023, Treasury Wine Estates Ltd (TWE), a globally renowned wine company, officially disclosed its acquisition agreement with the U.S -based DAOU Vineyards, an esteemed luxury wine business founded by brothers and co-proprietors Daniel Daou and Georges. The acquisition involves an upfront consideration of USD 900 million, along with a potential additional earn-out of up to USD 100 million. This strategic move marks a significant transformation for TWE, as it propels the company toward an enhanced emphasis on a luxury-driven portfolio, amplifying its presence in crucial growth markets, notably the U.S.

Companies are increasingly focusing on producing new products to gain market share in the U.S. For instance, in September 2023, Demeine Estates introduced Haynes Vineyard to the U.S. market. Acting as the exclusive sales and marketing partner for this distinguished Napa Valley winery, Demeine Estates will oversee targeted distribution. The inaugural release, featuring exquisite single-estate Chardonnays, Pinot Noir, and Syrah wines, was available in the market from October 1, 2023.

Market Concentration & Characteristics

The market demonstrates a low to moderate degree of innovation. Blockchain technology is being explored to enhance traceability in the wine supply chain. It enables transparent documentation of each production stage, from grape cultivation to bottling, providing consumers with verifiable information about the authenticity and organic certification of the wine.

The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates wine labeling. Changes in labeling requirements, including nutritional information, allergen declarations, or sustainability certifications, can impact the industry. Additionally, in the U.S., wineries are not allowed to include the addition of spirits on wine labels or indicate that a wine has been fortified according to current regulations. The TTB is contemplating revisions to permitted bottle sizes and shapes, as well as adjustments to labeling for fortified wine.

The threats of substitutes in the U.S. wine market are moderate. Wine faces competition from other alcoholic beverages such as beer and spirits. Moreover, the rise of non-alcoholic alternatives and the trend toward healthier living pose a threat to traditional alcoholic beverages, including wine.

Product Insights

Table wines led the market and accounted for the largest revenue share of 83.4% in 2023. Table wines are non-sparkling, unfortified, and dry. Their availability through various off-trade routes and preferability among the vast population as an economical option for regular consumption drive segment growth. Being inexpensive and easily accessible through retail, table wines often find preference among new consumers of wine. With changing lifestyles, there has been a shift in alcohol consumption-from hard liquor to mild alcoholic beverages such as beer, wine, and seltzers. This trend is a key factor driving the growth of new wine consumers and consequently plays a role in the rising demand for table wine.

The sparkling wine segment is expected to grow at a CAGR of 6.3% from 2024 to 2030. There is a growing interest in celebratory and social drinking occasions in the U.S., which is driving the regional market. Sparkling wine, particularly Champagne and its more affordable alternatives such as Prosecco and Cava, is often associated with festivities, special events, and toasts. As consumers increasingly seek experiences and moments to celebrate, the demand for sparkling wine has naturally risen. The percentage of people who consume sparkling wine at least once a month increased from 56% to 72% between 2019 and 2022, as reported by IWSR Drinks Market Analysis. In addition, the total number of Americans drinking sparkling wine rose by 30% during the same period.

Distribution Channel Insights

The sales of wine through off-trade channel accounted for the largest revenue share in 2023. Off-trade distribution channels for wine in the U.S. include supermarkets, hypermarkets, retail outlets, organic stores, and e-commerce platforms. According to the 2020 Drink Analysis report by the International Wine & Spirit Research (IWSR), around 80% of alcohol sales in the U.S. were generated from off-trade sales channels. Retailers offer a diverse wine selection, often with discounts and offers. They also provide a convenient one-stop shop for wine consumers. The demand for U.S. wine is increasing among consumers in the country, and as a result, many wine retailers in the U.S. are expanding their offerings to cater to these evolving consumer preferences.

The sales of wine through on-trade channels are expected to grow at a CAGR of 6.3% from 2024 to 2030. The on-trade distribution channel includes bars, clubs, restaurants, hotels, and wineries. Increased product penetration through restaurants and bars in the U.S. is a key factor driving the segment’s growth. With the relaxation of COVID-19-related lockdowns and the availability of vaccines across the U.S., the on-trade channels for wine resumed operations with several safety regulations in place to limit the spread of coronavirus. According to the International Wine & Spirit Research (IWSR), in 2023, the revival of on-trade establishments, particularly bars, has significantly contributed to attracting a younger demographic to the wine category. Wine consumption levels in on-trade settings now exceed those from before the pandemic.

Key U.S. Wine Company Insights

E. & J. Gallo Winery and Constellation Brands, Inc are the dominant players operating in U.S. wine market.

• E. & J. Gallo owns fifteen wineries and oversees over 20,000 acres of vineyards in California. The company also collaborates with growers nationwide to ensure a consistent supply.

• Constellation Brands, Inc., is a U.S.-based producer & distributor of beer, wine, and alcohol spirits. The company has over 40 breweries, distilleries, wineries, and corporate offices in nine countries-the U.S., Australia, China, Canada, Switzerland, Italy, Mexico, New Zealand, and Hong Kong. Constellation Brands has a portfolio of over 100 brands, including Corona, Modelo, Kim Crawford, Cooper & Thief, Robert Mondavi, Ruffino, Casa Noble, SVEDKA, and Mi Campo.

Recent Developments

• In August 2023, E. & J. Gallo's Luxury Wine Group announced an agreement with the Rombauer family to acquire Rombauer Vineyards. The acquisition encompasses the Rombauer Vineyards brand, three state-of-the-art winery and production facilities, two tasting rooms offering stunning vineyard panoramas, and extensive 700-plus acres of vineyards under sustainable cultivation in Carneros, St. Helena, Atlas Peak, Sonoma Valley, Calistoga, and the Sierra Foothills.

• In June 2023, E. & J. Gallo Winery announced its acquisition of the Hahn Family Wines portfolio, enhancing Gallo's current offerings throughout the Central Coast. This strategic investment includes well-known brands such as Hahn SLH, Smith & Hook, and Hahn.

• In June 2023, Pernod Ricard introduced Sainte Marguerite en Provence Rosé in the U.S. markets. This brand's distinctive rosés expertly combine Grenache grapes with complementary varieties of Cinsault and Rolle.

U.S. Wine Market Report Scope

U.S. Wine Market Report Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. wine market report based on product and distribution channel.

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Table Wine

  • Dessert Wine

  • Sparkling Wine

• Distribution Channel Outlook (Revenue, USD Million, 2018 - 2030)

  • On-Trade

  • Off-Trade