The Five Macro Trends Impacting the Wine Industry in 2022

Over the course of the past few decades, the development and evolution of the wine industry in the United States has largely been propelled by organic changes to culture, society, and technology. Population growth, demographic changes, the introduction of a wider variety of beverages, the implementation of widespread Internet communications. These have been the general trends that have given us the industry we have.

But it’s the one-offs that impress us and move the industry to immediate actions. The Trump Tariffs motivated us to immediate action. The 60 Minutes’ French Paradox broadcast moved the industry to open its arms and gather the ensuing wealth. Fires inspired parts of industry to seek responses to smoke invested grapes. And COVID-19, the ultimate one-off, inspired an industry to more fully and quickly embrace the promise of digital sales while momentarily rejiggering the path to sales in the wake of a retreat from socializing.

That was then. What of 2022?

With 2021 being the year of vaccines, the COVID-19 pandemic’s social restrictions and the altered consumer behavior waned. It meant folks returning to restaurants, bars, hotels and wine country. We saw a return to pre-pandemic divisions of wine sales, with on-premise sales marching toward 2019 levels if not entirely recovering. This also meant an expected retreat from inflated off-premise sales. 2022 is likely to be the year wine sales see their momentum governed by organic forces rather than catastrophic disruption. Recognizing this is important as the three years prior to the 2020 pandemic year saw relatively flat wine sales.

2-Rising Prices and Inflation
Increasing costs of labor, raw materials, packaging materials and logistics will lead to higher wine prices in 2022. How consumers react to higher wine prices, however, will likely have more to do with the duration of inflation in the general economy, rather than in wine prices. If increased levels of inflation continue through 2022 and into 2023 (not predicted by most economists) we could see a considerable negative impact on wine buying. Yet, if the general inflationary trend is moderated and begins to wane by the third quarter of 2022, then I wouldn’t expect severely negative impacts on wine sales.

3-Category Competition
Wine, beer and spirits had been the primary competitors where consumable vice was concerned. There is more today for people to spend their “inebriation dollars” on and this enhanced competition will continue to impact wine sales. Beer, spirits, seltzers, ciders, Ready-to-drinks, cannabis, etc all put pressure on wine sales. The only plausible reaction to this threat to wine sales is enhanced promotion of wine on an industry level: campaigns promoting wine as a general category that can only be financed by an industry-wide effort. I will be shocked if the industry can come together in 2022 to undertake this effort. But it really must if the flat sales trend is to be prevented from becoming a negative sales trend.

4-Enhanced Online Sales
It would be shocking if online sales of wine did not increase in 2022. Though we have no reliable metric to measure online retail sales of wine, they surely exceed the value of winery online sales and will continue to exceed them for the foreseeable future. But winery online sales will also increase as 2022 sees wineries continue to incorporate the lessons of 2020 into their marketing and sales efforts.

5-Regulatory Erosion
Whether via litigation or lobbying, the strict three-tier system will continue to erode. Expect at least 3 more decisions out of the Courts of Appeals in 2022 impacting the question of in-state presence requirements for retailers, which in turn will have a future impact on the disposition of wholesalers. Brewers and distillers too will help push back restrictions on direct-to-consumer shipping. This won’t happen with wholesalers sitting back on their heels and allowing it all without a fight. Wholesalers will continue to work to restrict consumer access to alcohol while continuing to represent fewer and fewer brands. We may also in 2022 see the federal government’s response to its inquiry into competitiveness in the alcohol industry. My guess is that at best this response will have a short-term reduction in consolidation in the wine industry.


Posted In: Wine Business


One Response

  1. acv - December 30, 2021

    Don’t be Jen Psaki. – DECEMBER 6, 2021

    “Economists with the National Association for Business Economics (NABE) are predicting inflation will remain above 2% possibly over the next three years, just weeks after White House Press Secretary Jen Psaki claimed, “no economist” is projecting it to go higher.”

    MSN (31st Dec 2021) – Soaring inflation could be to 2022 what supply chain crisis was to 2021

    High inflation will last well into 2022, economists say, indicating that supply chain bottlenecks will keep increasing prices and curbing production.

    Experts expect to see average inflation of 5.25 percent in December, slightly down from the current maximum predicted to be 5.4 percent, according to The Wall Street Journal.

    If inflation stays around its current level, Americans will experience the longest period during which inflation has stayed above 5 percent since 1991.

    Financial Times – Persistent inflation poses threat to eurozone recovery, economists warn

    The eurozone’s economic recovery risks being undermined if persistently high inflation erodes consumers’ disposable income and forces the European Central Bank to withdraw its stimulus more quickly than planned, according to a Financial Times poll of economists.

    More than 40 percent of the 38 economists surveyed by the FT identified inflation as a significant risk to the growth prospects of the 19 countries that share the single currency — making it the most-cited risk factor for 2022 along with the pandemic.

    “Inflation will eat into wages, reducing demand,” said Jesper Rangvid, a finance professor at Copenhagen Business School, adding that the “ECB might also have to respond to inflation risks by raising rates, taming the [economic] upswing”.

    Yahoo Finance Video – The Fed changing its tune on inflation is ‘too little, too late’: Strategist
    Thu, December 30, 2021,

    Headline says it all

    BBN Times (12 December 2021)

    The Federal Reserve now expects core inflation to remain above 2.7% in 2022 (previously it expected 2.3%) and that it will be above 2% in 2023 and 2024. That means the CPI (Consumer Price Index) will probably remain above 3-4% in that period. Taking into account that it will close the year above 6%, we are talking about an accumulated inflation of more than 14% in three years, a great risk for the recovery, real wages, family savings, and investment.


    The problem is that the Fed gave Obama a record 7 year run of 0 hikes in the prime lending rate and the Fed seems to want to repeat this trend with Biden…plus quantitative easing should have been tapered a long time ago and more aggressively….so, yeah…I predict Carter administration 2.0

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