An annual look at the nation's wine industry was released on Thursday and says this year could show an unusual decline in consumption.
"While demand for premium wine will increase this year, there are clouds on the horizon that should be considered," said Rob McMillan, the man behind Silicon Valley Bank's State of the Wine Industry Report. "We believe total and per capita wine consumption in the U.S. will drop for the first time in more than 20 years due to emerging generational shifts in consumption patterns that we see accelerating in the near term."
McMillan said there is a permanent shift from generic wine, and aging baby boomers are being replaced by frugal millennial consumers. He said Millennials, at this point in their development, have proven more agnostic in their choice between beer, spirits or wine compared to retiring boomers.
Here are some additional findings and predictions from the report for 2016:
- Volume and price drops will occur below the $8 bottle price
- Tens of thousands of additional grape acres will be permanently removed from the California Central Valley
- Supply of arable land suitable for higher-end wine production will narrow and drive vineyard prices higher