The following is an excerpt from the Wine Market Council's 2007 Consumer Tracking Study final report. The complete report and study results are available to current Wine Market Council members. For more information about membership, please click here.

The year 2007 stands out as a milestone in the U.S. wine market’s path of continued growth. The consumption of table wine continues to increase; adult per capita consumption of table wine set a new record high, and the fourteenth straight year of gains in total wine sales was logged. The length of this growth period is unusual for a U.S. wine market with a history of ups and downs measured in decade-long periods: a sudden surge in consumption beginning in 1970; lengthy retrenchment through the 1980s; and a slow and steady climb beginning in 1994 and continuing to this day. Moreover, the outlook for continued expansion of the wine market in the U.S. is excellent.

Beginning at just over the one gallon in 1970, adult per capita consumption of table wine zoomed to more than two and a half gallons in just over ten years. Then, from a high point of 174 million cases of table wine consumed in 1982, a long period of decline began, taking total table wine per capita consumption down to 1.89 gallons per adult in 1991, with only 140 million cases of table wine consumed that year.

Table wine consumption in the U.S. began an uninterrupted climb again in 1994. Consumption has grown every year since, surpassing the 1982 case level in 1996, when 176 million cases of table wine were consumed. The 200-million-case level was surpassed in 2000, and growth has continued through 2007, with an all-time record 269 million cases of table wine estimated to have been consumed in the U.S., and adult per capita consumption estimated at a new record of 3.02 gallons.

Demand for table wine in the U.S. is today surging more strongly than any time since the late 1970s, and immediate prospects for continued growth are excellent. Recent consumption gains for table wine have been driven by the continuing assimilation of news relating moderate wine consumption to positive health outcomes, increased and more highly evolved marketing campaigns by major brand marketers, and the ongoing media campaign conducted by Wine Market Council since 1995 which has changed consumer attitudes about the ‘occasion appropriateness’ of wine. Gains in table wine consumption since 2000 are also highly attributable to the adoption of wine in early adulthood by Millennial-generation young adults, as well as an influx of Generation X wine drinkers.

A look back at the rise, decline, and resurgence of the table wine market in the U.S. reveals both long term trends and independent factors that account for the movement of this market.

The wine boom of the 1970s and early 1980s occurred as the leading edge of the Baby Boom generation (persons born between 1946 and 1955) matured, and drove the consumer market with their unique set of tastes and lifestyle choices. Many of these were distinctly if not adamantly different than the tastes and choices of the generations preceding them. Wine as a preferred form of beverage alcohol was among these. White wine growth dominated this period, with the ubiquitous ‘glass of Chablis’ spurring increased table wine consumption by displacing other beverage choices (mainly other beverage alcohol choices) on occasions which often were previously outside the realm of deemed appropriateness for wine. The simultaneous proliferation of high quality, premium table wines from emerging U.S. producers and from Europe was both a stimulus and response to the burgeoning demand for table wine during this period.

As a generational phenomenon, the wine boom reached its peak in the mid-1980s. For more than a decade following the high point in both total and adult per capita table wine consumption the market sagged, until the upturn which began in 1994. From just 1.05 gallons of table wine per adult in 1970, adult per capita table wine consumption more than doubled in a decade, reaching 2.58 gallons in 1982, as previously noted. The gallonage and per capita losses which followed, through the 1980s and early 1990s occurred during a period of continually rising per capita disposable income, and despite the fact that the consumer price index for wine had lagged behind that of beer, spirits, food, and the average of all consumer goods.

Numerous factors contributed to the market decline in table wines through the 1980s and early 1990s, including the following:

These factors all contributed to the erosion of gallonage and per capita consumption of table wine. Contributing also to the period of decline were cuts in marketing expenditures by the major wine brands, and the failure of Generation X adults initially to incorporate wine into their lifestyles as thoroughly as the Baby Boomers who drove the wine boom in the 1970s and early 1980s and today represent the largest segment of the core wine consuming population.

Generation X adults, now mostly in their 30s, are taking to wine in significant numbers. Moreover, the Millennial generation, now entering young adulthood, is exhibiting the same receptivity to wine that leading edge Baby Boomers did more than 30 years ago. Like the Baby Boom generation, their numbers are so great as to make their dominance in the market inevitable, and they offer the wine industry the kind of growth potential not seen in more than thirty years.

There are 77 million Baby Boomers (ages 43 to 61 in 2007), compared to a 44 million Generation X population (ages 31 to 42 in 2007). But the Millennial generation is a group of some 70 million. The eldest among this group turned 30 in 2007. They add, on average, 5 percent more new adults to the U.S. population per year than did Generation X, and their taste and lifestyle choices will drive the beverage alcohol market for many years to come.

As noted above, adult per capita consumption of table wine in the U.S. now stands at an all-time high of 3.02 gallons per person. Although compared to per capita consumption levels in other countries the U.S. lags far behind, in 2007 the U.S. moved past Italy and into second place for total consumption of table wine. Further, it should be noted that for some time, the U.S. has been the number one market for wine sales (when measured in dollars) and is the fourth largest producer of wine among all countries.

With fourteen straight years of wine consumption growth in the U.S. now on record, and adult per capita table wine consumption at an all-time high, there has never been a better moment to capitalize on the positive trends and emerging demographic imperatives of the market. Meeting the challenges of building the consumer base of the U.S. wine market will provide for long-term increases in demand for wine and profitability for the industry for many years to come.

The complete Wine Market Council 2007 Consumer Tracking Study report and study results are available to current Wine Market Council members. For more information about membership, please click here.