A recent San Diego County Vintners Association report shows softening sales in 2024, but the association remains optimistic despite changing American tastes.
According to the report, local wineries generated $51.7 million in gross sales last year, a 5% decline over 2023. Sales, however, are still more than double what they were in 2016, the first year the data was available.
“There was a lot of doom and gloom and a lot of pretty nasty numbers coming from Europe as far as the wine industry worldwide being down," Vintners Association president Mike Weber said. "And I was concerned that we would be down more than 5%. So to me, a 5% drop seemed like a victory.”
Even with softening sales, the report shows that more people are entering the industry, with 172 active or planned wineries, a 3.6% increase from the prior year. And more grape varieties are being grown here, 57 in 2024 compared to 48 in 2023, but fewer Americans are drinking.
According to the IWSR, an industry research group, overall alcohol consumption fell 2.8% in the first seven months of 2024, with wine seeing the biggest drop at 4%.
“There’s a trend within the industry that the baby boomer generation, which were great consumers of wine, are aging out of the category," said Mike Effenberger, owner of Effenberger Vineyards. "And the younger people, the Gen Z-type folks that are coming in, aren’t really big wine drinkers yet.”
With the tariffs creating economic uncertainty, more people are cutting back on discretionary spending, including wine. But Effenberger thinks there is still room for growth.
“As long as this tariff market situation calms down, I think we’ll be set up for a good couple of years for sure,” he said.
University of San Diego economist Alan Gin doesn't think the drop in sales in 2024 was related to the economic uncertainty from the tariffs, because that didn't kick in until this year. He thinks it was because of inflation.
"It has eased off, but prices are still relatively high, they haven't gone down, and so people might be squeezed in terms of their disposable income, the real disposable income," Gin said.
Gin said a couple of factors could determine whether 2025 is a robust year for winemakers.
"In the past, it's been felt that during moments of anxiety that people will drink more. So if there's a lot of uncertainty, if there's a lot of anxiousness in terms of what's going to happen to the economy, we could see people then consuming more in that situation," he said. "The other thing, though, if these tariffs cause an increase in price, including in terms of the alcohol itself, that might mean, then people will be forced to cut back because they can't afford to buy as much."
