INSIGHT

Mid-year outlook for the wine industry: Navigating opportunities in a transforming market 

James Elliott, Jamie Emerson-Heery • August 8, 2025

Industries: Wine & Agribusiness

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The wine industry is at a pivotal crossroads as we reach the midpoint of 2025. Market dynamics continue to shift rapidly, with changing consumer preferences, evolving distribution channels, and new regulatory pressures reshaping how wineries operate and connect with their audiences. This transformation presents both challenges and opportunities for producers who can adapt quickly to emerging trends.  

This article examines the key forces driving change across the industry, from demographic shifts and sustainability imperatives to the rise of alternative formats and new market opportunities. 

Consumer behavior shifts driving market evolution 

The fundamental challenge facing the wine industry in 2025 stems from a demographic transition that’s happening faster than many producers anticipated. The market is rotating out of 60+ aged consumers who index higher for wine purchases compared to other alcoholic beverage categories and making way for consumers who index lower for wine. This shift requires immediate strategic response. 

Millennial consumers—those now in their late 20s to early 40s—tend to be more highly involved in wine, have more experimental tastes and are happy to spend more on a bottle or a drink in a bar at a time when older consumers are cutting back on spend. However, these younger consumers approach wine differently than previous generations, viewing it as part of a broader beverage repertoire that includes craft beer, spirits, and ready-to-drink cocktails and “mocktails”.    

The “mindful drinking” movement continues to reshape consumption patterns. Gen Zs (born between 1997 and 2012) and Millennials (born between 1981 and 1996) are particularly health-conscious, with many seeing even moderate drinking as unhealthy. This trend drives demand for low-alcohol and no-alcohol alternatives, creating new product categories that winery owners must consider. 

Premium positioning and the decline of bulk wine 

The idea of cheap, bulk wine as “starter wine” is a myth, and it’s likely a prime reason why younger people aren’t drawn to wine in general. Study after study shows that young people are drinking less but spending more. This fundamental shift challenges traditional volume-based business models. 

The sub-$10 wine segment continues its steep decline while premium tiers show resilience. Producers must rethink their entry-level offerings, with many now viewing $12-$15 as the new baseline for quality wine. This premiumization trend reflects younger consumers’ willingness to pay more for perceived quality, authenticity, and sustainable production practices. 

Sustainability becomes non-negotiable 

Global organic wine sales, now $12.4 billion, are expected to grow over 10 percent in the next five years. Environmental consciousness has moved from nice-to-have to essential, particularly for younger consumers who scrutinize brands for authentic commitment to sustainability. 

Gen Zs of legal drinking age and Millennials are sensitive to ‘greenwashing’ and will look for products where eco credentials are integral to a brand’s identity, not an afterthought or an add-on. This demands transparent communication about farming practices, packaging choices, and carbon footprint reduction efforts. 

Wineries are responding with regenerative agriculture, lighter packaging, renewable energy adoption, and carbon offset programs. These initiatives not only appeal to environmentally conscious consumers but also help future-proof operations against climate change impacts. 

Technology and alternative formats reshape engagement 

The wine industry embraces technological innovation to enhance both production and consumer engagement. AI-powered vineyard management, blockchain authentication, and data-driven personalization are becoming standard tools for competitive advantage. 

Alternative packaging formats gain significant traction with younger consumers. Millennials and Gen Z love convenience—canned wines are portable, festival-friendly, and easier to consume. These formats align with lifestyle preferences for convenience, portion control, and social sharing opportunities. 

Delivering an obvious ‘wow factor’, magnums have strong appeal for Gen Z and Millennials, with 51 percent and 23 percent of these consumers purchasing wine in this format versus 6 percent of Boomers. This suggests opportunities for statement formats that enhance social media appeal and celebration moments. 

White wine momentum and category diversification 

White wine’s popularity is soaring, surpassing red wine in global consumption. This trend reflects preferences for lighter, more refreshing profiles that align with health-conscious consumption patterns and diverse food pairing opportunities. 

Sparkling wines, particularly Prosecco and entry-level options, continue strong performance. Prosecco and Champagne are the top two wine regions for Gen Z and Millennial wine consumers, despite the high cost of Champagne and, in the case of Gen Z, lower levels of disposable income. 

Lesser-known varietals and emerging regions present growth opportunities as adventurous consumers seek unique experiences beyond traditional offerings. This exploration mindset creates space for innovative producers willing to experiment with alternative varietals and non-traditional wine styles. 

Strategic imperatives for the second half of 2025 and beyond 

Success in this evolving landscape requires fundamental strategy adjustments. Producers must prioritize authentic storytelling that connects with consumer values, invest in sustainable practices that deliver measurable impact, and develop products that meet changing consumption occasions. 

Direct-to-consumer channels become increasingly critical as traditional distribution faces pressure. Wineries must create compelling digital experiences, personalized offerings, and community-building initiatives that foster long-term loyalty beyond transactional relationships. 

The industry must also embrace category-level marketing that positions wine as modern, accessible, and aligned with contemporary lifestyles rather than relying on traditional prestige messaging that may alienate younger consumers. 

Partnering for transformation with BPM  

The wine industry’s transformation demands strategic financial guidance that understands both traditional industry fundamentals and emerging market realities. BPM brings deep sector knowledge and innovative thinking to help wineries navigate complex decisions around sustainability investments, technology adoption, distribution channel optimization, and consumer engagement strategies. 

Our team works with clients to develop financial models that support premiumization strategies while maintaining operational efficiency. We help wineries evaluate sustainability initiatives not just as cost centers but as value-creation opportunities that enhance brand positioning and long-term viability. To discuss how we can help your winery thrive in this dynamic market environment, contact us.