The United States wine market is under mounting strain as import tariffs, rising production costs, and evolving consumer preferences converge to reshape purchasing and retail dynamics.
With the holiday season approaching, many consumers searching for bottles for Thanksgiving or end-of-year celebrations are encountering higher prices and reduced selections, particularly at specialty wine shops.
Rising Prices Driven by Multiple Factors
According to official data, the average price of bottled wine in the U.S. has increased by nearly 20% over the last 25 years and by 8% in the past decade. Industry analysts attribute this upward trend to a combination of:
- Climate change, which has affected yields and quality.
- Inflation and rising input costs, including packaging, energy, and labor.
- Higher logistics and shipping costs.
- Tariffs imposed during the Trump administration, which include a 15% duty on European Union wine imports.
Retailers are experiencing the impact firsthand. Daniel Mesznik, owner of McCabes Wine & Spirits in Manhattan, reports retail price increases between 5% and 12% this year. He notes that his business aims to absorb part of these increases to protect customers, yet acknowledges that most consumers understand the broader economic situation.
Importers Report Declining Sales and Reduced Order Volumes
Importers are facing even stronger pressure. Elenteny Imports, a major logistics provider serving around 9,000 retailers and restaurants, reports:
- 13% decline in wine sales compared to last year
- Nearly 30% reduction in orders for imported wines in 2024
This contraction reflects both tariff impacts and weakening consumer demand.
According to IWSR, U.S. wine consumption has fallen 3% between 2019 and 2024, with an additional 4% decline projected through 2029. Many consumers are shifting toward ready-to-drink cocktails, canned mixes, and other lower-priced, convenient alternatives.
Demand that surged after the pandemic has now cooled significantly. Alexi Cashen, CEO of Elenteny Imports, stresses that tariffs remain a major barrier. She adds that even domestic wines have failed to rebound meaningfully in sales this year.
Retailers Adjust Strategies Amid Shifting Demand
Faced with falling wine sales, retailers are diversifying their offerings. McCabes Wine & Spirits, for example, has significantly expanded its tequila portfolio—products exempt from tariffs due to the 2018 trade agreement with Mexico.
Key strategic adjustments include:
- 40% increase in tequila brands and varieties
- Repositioning tequila in a more prominent section of the store
- A shift in revenue: wine now accounts for 65% of annual sales, down from 70%
Meanwhile, categories such as tequila and agave-based spirits continue to grow.
European Imports Drop Sharply
The decline in import orders is affecting European suppliers particularly hard. Elenteny Imports reports:
- 50% decrease in shipments from France
- 66% decrease from Italy
These reductions may lead to a more limited range of European wines available on U.S. shelves. Wine economist Mike Veseth notes that many retailers and restaurants are simplifying their selections due to reduced demand and increased costs.
Adding to the uncertainty, the wine sector is awaiting a Supreme Court ruling on the legality of the existing tariffs. The pending decision has frozen new investments and discouraged major pricing adjustments.
Market Segments Under Pressure
Current sales trends reveal a shift in consumer behaviour:
- Wines priced USD 40–USD 50 are struggling the most.
- Entry-level wines and premium, high-end wines are performing better, reflecting a polarized market.
Retailers are adapting by:
- Purchasing larger quantities from suppliers offering volume discounts
- Introducing targeted promotions to stimulate sales
- Streamlining their assortments to focus on higher-turnover wines
Conclusion
The U.S. wine market is undergoing a period of significant adjustment. Tariffs on European imports, rising production and logistics costs, and changing consumer preferences are placing pressure on both importers and retailers. As demand becomes more selective and cost-conscious, industry players are modifying strategies to remain competitive. The outcome of the pending Supreme Court decision on tariffs will likely play a decisive role in shaping the sector’s direction over the coming years.
Source: Vinetur