Low Alcohol and No-Alcohol wines are an increasing challenge to the wine industry

The wine industry is encountering challenging winds. We recently spoke with notable British wine critic Robert Joseph to gain new insights.

Robert Joseph, a highly regarded British wine critic, journalist, and writer, started his career in the 1980s with wine journalism, co-creating Wine International magazine and initiating the International Wine Challenge, one of the most prestigious wine contests globally.

Joseph has written multiple books about wine, including The Complete Encyclopedia of Wine and Robert Joseph’s Ultimate Wine Companion. He routinely writes columns for various wine magazines and has been featured on television multiple times.

In addition to critiquing, Joseph has a deep-seated passion for viticulture. He helped establish the globally recognized wine label Le Grand Noir and often provides consulting services.

JM: You’ve asserted that the wine industry places too much emphasis on consumer education, suggesting that one doesn’t need to be a leather expert to purchase shoes but simply must find shoes they appreciate. How do you believe the industry should aid consumers in discovering wines they enjoy instead of focusing on education?

RJ: The wine sector can draw lessons from the spirits industry, which seldom concentrates on educating consumers about the production differences between spirits like gin, vodka, and rum; similarly, Champagne producers focus on crafting appealing products. Take Aperol Spritz enthusiasts for example; few know about its origins or production process, but they delight in the drink’s taste and appearance. Some wine brands like Whispering Angel and Barefoot have successfully adopted this consumer-centric approach, catering to varied price segments.

Barefoot Wines Range of Sweet and Fruity Wines

JM: It’s estimated that 85% or more of the wine industry’s sales are at price points below $20. Does the wine media adequately cover lower-priced wines, or is there too much emphasis on the expensive, plus-$20 wines that most consumers do not buy?

RJ: The wine media – which, as a critic, I was once part of – quite reasonably focuses on what it sees as the more ‘interesting’ wines, just as automotive writers don’t spend quite as much time on the latest cheap Nissan as on the exciting new BMW.

But my favorite critic in any domain—the movie critic Roger Ebert—wasn’t like that. He was as ready to cover new teen flicks as the latest Scorsese. So, yes, we do need more writers looking at entry-level wines, but with an eye to whether they are ‘fit-for-purpose’ rather than whether they match up to a different set of quality criteria. Their failure to do this has opened the door to Vivino and influencers who are happy to do the job for them.

JM: Wine competitions are held globally, with awards from prestigious events significantly boosting new brands. The judges in these events are typically professionals with extensive credentials in the wine industry, credentials obtained after intensive studies and tests. However, one might question whether these judges align well with the tastes and values of regular wine consumers when it comes to everyday purchases.

RJ: As a founder of the IWC and a board member at Mundus Vini in Germany, I speak cautiously. The judges in these competitions focus on determining the absolute quality of the wines, which is a crucial aspect similar to evaluating performances in the Olympics or dog shows.

But it’s important to remember that the typical consumer does not purchase wine ‘blind’ as done in these competitions. Consumers see the label, know the region, grape, brand, and price, which all influence their purchasing decisions. Consequently, a medal from a competition or a critic’s rating is just one factor among many that a consumer may consider.

JM: In North America, wine sales have been relatively stagnant over the past five years. Sales of red wine have slightly dipped, while sales of white wine have seen a small rise. Rosé wines, starting from a small base, have seen a sharp increase in volume, though this growth rate has notably slowed. These trends raise the question of whether there are shifting demand patterns for wine or if this signals a persistent flat to downward trend in the market.

RJ: The shift to pink and white and sparkling is interesting because it reveals the way wine has become a, quite possibly, simple beverage rather than a complicated accompaniment to food. People know they like, or don’t like – Chardonnay, Pinot Grigio, or Sauvignon Blanc and order accordingly.

With rosé, it’s even simpler: dry or sweet. Who knows the grape behind the pink wine in their glass? Who cares? It is interesting to consider the position of Red Blends in the US market. These fill a similar role: a predictable drink.

Friends are having a celebratory toast of rosé wine together during a party.

Of course, plenty of people love complexity and are eager to try Georgian Qvevri wines and French Pet Nat. But these people are the exceptions to the wine-drinking rule—despite the space that’s quite reasonably dedicated to them by the wine media.

JM: How has the introduction of canned wines, including flavored wines, changed the dynamics of the wine marketplace? Is it resulting in a net expansion of the market or driving a migration to lower price points?

RJ: These products aren’t necessarily cheap. But they fit my narrative of helping reposition wine as a beverage rather than a ‘noble’, complex product that must be taken seriously. I see no reason to imagine they will disappear despite the wishes of many wine conservatives.

JM: Younger consumers seem less interested in wine consumption. Roughly a third of Gen Z consumers say they prefer no alcohol or low-alcohol beverages. How should the wine industry respond to this generational preference?

RJ: There are two answers. 1) embrace this and produce lo-no wine-based drinks to satisfy their demand. I am unashamedly doing with a le Grand Noir 0.0% extension to our range. 2) promote the unique, historic qualities of wine that make it such a great convivial product and such a delicious partner to food.

1) and 2) are not mutually exclusive. Evidence suggests that individuals who enjoy non-alcoholic beverages often drink alcoholic ones too, sometimes within the same event. It would be great to see someone start their evening with a glass of le Grand Noir 0.0% Blanc and then move on to enjoy a 12.5% le Grand Noir Pinot Noir with dinner, or perhaps as a subsequent drink.

JM: Baby boomers had a preference for Cabernet Sauvignon and Chardonnay. Are the Millennials and subsequent generations leaning towards different varieties like Pinot Noir and Sauvignon Blanc? Has the wine industry adapted to these shifting preferences?

RJ: The situation isn’t black and white. Indeed, the younger contingent is gravitating towards the lighter and fresher taste profiles of Sauvignon, Pinot Grigio, Prosecco, and Pinot Noir. However, it’s premature to dismiss the relevance of Cabernet and Chardonnay just yet.

As mentioned previously about Red Blends, I believe alternatives will become increasingly popular. I am currently developing a wine in Georgia named K’AVSHIRI, which incorporates a mix of Georgian grape varieties, winemaking techniques, regions, and vintages. This wine challenges conventional norms, setting a precedent that I anticipate others will emulate.

JM: Are we producing an excess of wine, and is it priced too high?

RJ: Given the overall consumption levels worldwide, it’s clear that the wine production has been excessive for some time. It’s only recently that this has become widely acknowledged. Moreover, a significant amount of wine is sold too cheaply, yielding minimal profits, a situation made even more precarious by climate uncertainties.

There’s a growing trend where the younger generation in European wine-making families are reluctant to follow in their parents’ footsteps. Consequently, I anticipate a decrease in production by 15-20%, primarily affecting the lower end of the market. Large-scale producers like Gallo and European cooperatives, which are structured to produce inexpensive wine, will dominate this segment.

At the high end of the market, esteemed wines, akin to top-tier restaurants and luxury fashion brands, will likely endure. Those positioned in the middle, however, may face significant challenges.

Are they priced low enough to draw in consumers unwilling or unable to spend beyond $12-15? Do they have sufficient marketing to appeal to those with larger budgets? This circles back to the beginning. Spirits and beer brands possess margins that allow for marketing, justifying the high prices that sustain these margins. Many wine businesses lack adequate funds.

JM: Thank you.