01/02/2024

Where next for the US sparkling wine market?

Even though sparkling wine growth is moderating, IWSR data shows a demographic shift that's driving deeper category engagement in the US

Despite signs of slowing growth, the prospects for the US sparkling wine market are largely positive, thanks to an expanding base of increasingly engaged consumers making more frequent purchases in the category.

The marketplace has also witnessed a demographic shift over the past few years, with younger adult men now spearheading deeper engagement with the category – and consumers in general are increasingly looking beyond brands to explore new styles of sparkling wine.

Increased market penetration although category momentum slows

Recent category growth in the US has been impressive; roughly one-quarter of all adults are now sparkling wine consumers – an increase of almost 10m people, or 17%, on 2019.

Between 2017 and 2022, sparkling wine recorded a volume CAGR of +6%, compared to a CAGR decline for total wine of -1%. As a result, sparkling wine accounted for more than 12% of the total wine category in 2022, up from 8% in 2017 – with this figure forecast to continue to grow.

Coming out of the pandemic, the return of the on-trade and increase in events led to substantial volume growth in sparkling wine, surpassing pre-pandemic levels. However, this was not sustainable in 2022, resulting in a -3% decline in volumes. IWSR forecasts show volume growth of +1% CAGR between 2022 and 2027.

Prosecco maintained its momentum, consistently achieving new volume highs even into 2023 by offering a diverse range of affordable to luxury options. Prosecco also benefits from its use within the trending Aperol Spritz cocktail. Despite a record-high in 2021, Champagne faced challenges in 2022 into 2023, making it harder to sustain growth due to the previous year’s significant increase.

Nonetheless, sparkling wine consumers are making increasingly frequent forays into the category. Almost two in five (38%) now consume sparkling wine on a weekly basis, compared to 22% in 2019.

“There was an impressive jump in consumption frequency for sparkling wine between 2019 and 2022, suggesting that change during the Covid-19 pandemic has carried through, especially for Prosecco,” says Adam Rogers, Research Director, IWSR.

Increased frequency of consumption has transformed the popular image of sparkling wine; no longer just the beverage of choice for weddings, parties and other celebrations, it is now increasingly seen as suitable for casual get-togethers and everyday drinking.

Three in 10 sparkling wine consumers now consider it suitable for a relaxing drink at the end of the day at home, up from 23% in 2019. “This is most likely a result of the pandemic, with wine drinkers growing more accustomed to consuming sparkling wine in the home on everyday occasions,” explains Rogers.

Consumers – especially men – are increasingly adventurous in their sparkling choices

This greater exposure to the category is also spurring consumers on to explore it in greater depth, with almost half (45%) of drinkers wanting to try new sparkling wines, rather than sticking to what they know – an increase from 38% in 2019.

One of the demographic groups sparking this shift is men under the age of 55. Some 54% of men aged 35-54 classify themselves as ‘wine explorers’ who enjoy trying new or different styles of sparkling wine on a regular basis.

“Men under 55 are driving change in the US sparkling wine market,” says Richard Halstead, COO Consumer Research, IWSR. “They constantly show significantly higher involvement levels, more frequent usage, more diverse repertoires and higher typical spends.”

There are also signs that the increased exploration of the sparkling wine category is diminishing the importance of brand to consumers. While the presence of a familiar label remains the most important cue in the off-trade, this influence is waning: since 2019, ‘brand’ has lost six percentage points as a purchasing driver for consumers.

“Less reliance on brands suggests consumers might be more open to trying new and different styles of sparkling wine, which could impact established brands,” says Halstead.

Success of Italian sparkling wines

In terms of wine origin, Italy continues to exert a strong influence on the US sparkling wine market, accounting for 48% of total recalled volumes in 2023, ahead of US domestic sparkling wines at 37%.

Italian sparkling wines in the US enjoyed a volume CAGR of +10% between 2017 and 2022, and Halstead believes there is “a strong opportunity for Italian producers to continue to capitalise on their opportunity in the US market”. However, growth here is expected to moderate.

The main driver of Italy’s success continues to be Prosecco, which continues to account for roughly half of Italian wine volumes in the US – with consumers who reported drinking Prosecco moving up from one-third in 2019 to 42% in 2023.

“Sparkling wines from Italy, the US and elsewhere are increasingly migrating into a new positioning in the US – and, indeed in other major markets around the world,” concludes Halstead. “Beyond the traditional celebratory occasions, the category is becoming more legitimised as an alternative to still wine at meals.

“Furthermore, its presence as an aperitif cocktail ingredient is broadening its base in the many markets where aperitif cocktails are in strong growth, including the US.”

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