Master of Wine Matthew Deller – CEO at Australia’s Wirra Wirra Vineyards – tackles ‘the great wine debate’ as he responds to an article posted on thedrinkbusiness.com earlier this week in which it was suggested that the category is suffering from more than just a temporary downturn.
The question of whether wine faces a structural decline or a cyclical adjustment has resurfaced with every major economic contraction of the past century. Current conditions, including slowing volume growth, falling fine-wine indices and demographic shifts, invite the same debate. A review of global data suggests that the pattern is cyclical within developed markets, structural in some behavioural aspects, and ultimately consistent with the long-term evolution of a mature category.
The fine-wine market’s contraction in 2024 represents normal correction after a speculative surge. Liv-ex indices fell approximately 11% during the year, following a rise of more than 30% between 2020 and 2022. Market behaviour aligns with classic price elasticity in luxury goods: sharp appreciation driven by constrained supply and speculative investment, followed by deflation as liquidity tightens. Even after the decline, global fine-wine prices remain close to twice their 2014 levels. Historically, similar corrections have occurred after every major macroeconomic tightening, including 2008 and 2011, without altering the long-term trend of real-value appreciation.
Cyclical constraint not fundamental retreat
At the broader market level, global still-wine volumes fell by roughly 5% in 2024 according to the OIV. NielsenIQ recorded a corresponding fall in value of less than 1%, implying that the losses were concentrated in lower-priced tiers while premium and fine categories held share. This divergence of volume and value mirrors prior downturns when consumers reduced frequency but not necessarily trading level, signalling cyclical constraint rather than fundamental retreat.
Between 2021 and 2024, IWSR data shows a decline of about five million monthly wine drinkers across key mature markets even as adult populations grew by roughly nine million. Market penetration slipped from 36% to 35%. This suggests saturation rather than erosion. In demographic terms, the median age of frequent wine consumers in developed economies now exceeds 50. Younger adults are delaying regular consumption, drinking less often and dividing occasions across multiple categories.
This shift mirrors historical patterns. At comparable ages, earlier cohorts exhibited similar behaviour, preferring sweeter and lighter drinks before trading up in complexity and dryness as disposable income and experience increased. What differs today is pathway rather than taste development. The social and cultural structures that once facilitated progression from casual interest to sustained engagement, such as family dining, workplace hospitality and restaurant culture, have weakened. That is a sociological change, rather than evidence of declining interest in wine itself.
A recalibration of consumption norms
Health awareness and the reconfiguration of social life around digital interaction have reshaped drinking behaviour across all categories. In the United States, overall alcohol participation has fallen to 58% of adults, the lowest level since 1996. Comparable moderation is evident across Western Europe and Japan. Surveys from NCSolutions and IWSR indicate that approximately 58% of Gen Z respondents intend to reduce alcohol intake for reasons of wellbeing. These data points show a broad recalibration of consumption norms rather than a categorical rejection of wine. As with prior health-driven shifts, such as the anti-alcohol movements of the late nineteenth century and post-war public health campaigns, markets adapt through innovation in style, packaging and communication.
Wine’s global footprint continues to diversify. In China, wine’s share of total alcohol consumption has stabilised at approximately 1.3% after several years of contraction, with early signs of recovery. South Africa, Southeast Asia and Latin America continue to expand from smaller bases. Economic modelling demonstrates that per-capita alcohol consumption typically rises with income until national GDP reaches roughly twice the global average, then plateaus. Many emerging economies remain below that threshold, suggesting further growth potential.
These trends offset the slower performance of mature markets. They also replicate the diffusion pattern observed in previous waves of global wine adoption, from Western Europe to North America in the 1960s and from North America to Asia in the early 2000s, supporting the argument that wine’s cultural expansion continues, albeit unevenly.
A temporary contraction
Historical evidence reinforces the cyclical interpretation. Every major contraction in wine consumption has ultimately proved temporary. The nineteenth-century temperance era, U.S. Prohibition, post-war austerity, the beer-led industrialisation of the 1970s and the 2008 global financial crisis each reduced consumption in the short term but were followed by renewed growth as producers adapted to contemporary tastes and cultural contexts. The pattern suggests that periods of contraction act as recalibration rather than decline, triggering innovation in product, marketing and market geography.
Cyclical forces such as economic pressure, interest rates, inflation and speculative correction explain much of the current softness. Structural forces such as ageing populations, shifts in health culture and changing social patterns define the longer-term environment in which wine now operates. The two interact: demographic change slows recovery from cyclical downturns but does not remove the underlying demand for quality or authenticity that sustains wine’s cultural role.
In developed economies, wine has reached the plateau characteristic of mature luxury and cultural goods sectors. Volume growth slows, but value and knowledge deepen. In emerging economies, growth continues as purchasing power rises. The aggregate picture is one of adjustment, rather than crisis.
The data indicates that wine’s current challenges reflect cyclical economic pressure within a structurally maturing category. The forces reshaping consumption, including demography, health awareness and digital socialisation, are not existential threats but evolutionary pressures. History shows that wine adapts to every such moment. It is doing so again.
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