Bulk wine buyers shared their insights on market trends July 23 at the International Bulk Wine & Spirits Show in South San Francisco to help bulk wine sellers better understand how to navigate today’s choppy waters and keep making wine relevant.

Panelists included Noel Schaff, B2B Sales Manager at O’Neill Vintners and Distillers; Manveer Sandhu, Director of Winemaking, Rack & Riddle Custom Wine Services (specializing in sparkling, canned and carbonated wines); and Cathy Ference, Senior Manager, Bulk Wine Supply, Constellation Brands.

While bulk wine prices are at record low prices–with Napa Cab bulk going for half off normal pricing this year ($20-30 a gallon versus $50-60)–panelists said they’re seeing consumer interest in no and low alcohol wines, sustainability, vegan friendly wines, wine based RTDs, sweet wines (to pair with Asian foods), and more white wines than red. Private label wines are big. Flavored wines were another hot category. 

High Level: Focus on Producers’ Values, Sweeter Wines and Green Trends

“We really focus on sustainability as a certified B Corp,” said Schaff. “So we're utilizing that as some leverage right now in the market to differentiate ourselves for what customers are looking for.”

“Consumers are becoming a little bit more educated and wise to what they're putting in their body,” said Sandhu. “So I think a big shift that we've seen growth in is the no alcohol industry, and consumers looking for beverages to consume every day without ingesting alcohol and the effects of that.”

In addition to that, he said consumers like alcoholic drinks in a social situation on the weekends.   

“Ready to drink products are definitely growing exponentially. There's a lot of variety out there. The sky's the limit really on what you can put together.”

Consumers are also focused on practices in vineyards and wineries, speakers said. 

“Sustainable, organic, low additive, no additive, and no SO2 wines are definitely pretty trendy right now,” Sandhu said. “I don't expect that trend to die down. I just feel that it's just going to be another layer to the beverage business.”

Said Ference, “Lightweight packaging such as lightweight glass or using materials lighter than glass is a trend that will become the norm. The younger generation understands that handling materials need to be good for the environment. Organic, no additives, etc. are valued not only for the personal health benefits but also for the seemingly environmental benefits.”

Schaff echoed that, adding that foreign producers were ahead of the curve compared to U.S. producers. 

“Younger generations seem to be a little bit more aware of packaging choices, recyclability and what's convenient to carry around the beach or the park. But as a whole I think we're a little bit behind domestically from where the export market when it comes to lightweight glass, PET bottles, bag in box.” 

Innovate But Maintain Quality 

Schaff said consumers are still looking for quality across the board, no matter what the format. 

“Going back to the low alcohol and RTD–what I see, and what our buyers are looking for–really comes down to quality,” she said. “So everybody's searching for those low alcohol, organic, sustainable varieties. But we really have to be adamant about quality, because I'm sure we've all had some RTDs that maybe had some off aromas or off flavors or some low alcohol wines that maybe didn't taste quite varietally what the wine should be. So it seems like the focus is really to maintain that quality. We're not just going to dive deep into the trendy world and sacrifice that. And consumers are smart enough to distinguish what's going to last and what's not.”

Not paying enough attention to quality results in lower sales, she said, because competitors can offer better quality.

“We see a lot of turnover with these RTD brands and some producers dipping their toe in the water of low alcohol, but we really have to focus on quality as an industry. Domestically, we're a little bit behind in the quality, low alcohol space,” she said.

Sweeter or Flavored Wines

What’s inside the package is also changing, panelists said. 

“A stable emerging trend is wine paired with non European foods such as sweeter wine to go with spicy or fish based Asian foods,” said Ference.

Said Schaff, “In the world we're in–super oversupplied–there is amazing quality out there. You can get the best Santa Lucia Highlands Pinot right now at ridiculously low prices…Aside from the standard varietals, we have some other options–different varieties like Albarino, some orange skin contact wines–that I think speak to the market right now.”

“Flavored beverages are definitely ones where there's more opportunity,” Sandhu said. “We’re making pomegranate, peach, mango… pina colada. I think those are options that will allow consumers either starting out in the alcoholic beverage industry to get their foot in the door and get them exposed to alcohol. 

Case in point: according to NIQ, Stella Rosa’s low alcohol Pineapple & Chili, which combines flavored wines with low-alcohol and sweet flavors, was the best selling new wine in the U.S. in 2023.

Even so, “consumers are looking for natural ingredients,” Schaff said. “So we're talking about natural sweeteners, naturally sweet wines–we're not adding too many fake additives. And in RTDs also. A lot of our customers are looking for the wine base–something they can label on the can as wine–so I think the overarching theme here is that the trends we're seeing always go back to natural ingredients.”

Opportunity Knocks?

“Prices overall for this vintage are going to be very attractive for wineries and for people that are looking to start their own new program,” said Sandhu, “especially if you're able to to lock down a two, three plus year deal.”

Two or three years ago, Napa Cab was “maybe 50 or $60 a gallon,” said Ference. “And now it’s down around $20 to $30. The 2023 vintage was about 3.5 million gallons more than the prior vintage… so there's a lot of inventory out there which obviously is bringing the price down.” 

Business decisions must balance a flash sale mentality versus a long term brand strategy, panelists said.

Sandhu, whose employer offers winemaking services for low and no alcohol wines, was optimistic about low pricing enabling producers in new and emerging low and no alcohol categories to build market share. 

“If you can get market share now the next two, three years, you could evaluate pricing, and potentially absorb prices as you move past these years of low cost,” he said. “It's really important right now in this relatively new part of the beverage industry to get market share. And to get your product out there in the market–get consumers to be excited about it, get retailers talking. And then at some point, the sales would drive the future growth of the product. Being aggressive on pricing and quality will certainly set you up for the future.”

On the other hand, at Constellation, a more established player, Ference said the company is not seeing growth in low and no alcohol wines in incoming business, but does have lower alcohol programs. “It definitely is a growing trend,” she said.

Low and No Alcohol Wines are Trickier and Pricier

New technology is entering the arena to help achieve new lower alcohol goals–at a cost–and improving quality as well.

On the sparkling side, Sandhu said Rack and Riddle, which already has a low alcohol, traditional method sparkling wine in a lightweight bottle, is adding an aroma capture technology from Europe to improve low or no alcohol wine aromas. 

“Consumers at this point, as we can tell so far, are willing to pay more for low or no alcohol wines,” Schaff said. “And oftentimes these products are more expensive because the technology is a big cost burden on producers and bottlers…We're gonna have to, as an industry, effectively communicate to our end consumer that there is a price to pay for these.”

“There's a lot of doom and gloom out there with the bull market right now,” said Schaff. “But let's look at this as a positive… the industry can rise to the occasion and try to reinvent the wheel so to speak, while maintaining our foothold in a traditional wine space.”

Private Label 

Said Schaff, “I would say excitement, in the spirit of healthy competition right now, is in the private label space…we're really upping the level of competition of our main suppliers to produce and come out with the best quality wines at those private label prices. That's exciting, although a little nerve wracking for our suppliers, because we're really battling it, but that really comes from the retailers, and we want to hear from them.”

Long Term Relationships

The panel saw the current landscape as the time to focus on trust and long term relationships to carry the industry through hard times. 

“It’s agriculture. So it's going to go up and flow,” Ference said. “And I think everyone is aware of that.” If wineries have a place to keep the wine, they can take advantage of really inexpensive prices.

“The partners that I've worked with trust me and want to work with me going into the future,” she said. 

“A lot of building trust is keeping an eye on returns to the market,” said Scaff, “and being able to work with our customers to help them navigate these waters right now and to be a guide for them.”