The Wine Industry’s Roadmap for Growth

3 Learnings from Impact’s Hot Brands for 2023

by Patricia Denci

The Wine Industry (and our blog) has been shouting about its decline for years. One listen to The Silicon Valley Bank State of the Wine Industry Report for 2023 echoes this doom and gloom message. The fact remains, wine consumption saw its second year of decline, with a 2% decrease in 2022 alone. The future relies on the wine industry’s ability to appeal to a new generation of consumers.

Despite industry declines, many wines brands that continue to grow and thrive. Last week, Shanken’s Impact Newsletter, a leading source for wine industry data, trends, and analysis, announced its list of “Hot Brands” for 2023. The designation from Impact as a “Hot Brand” is a key indicator of brand success. To qualify as an Impact “Hot Brand,” wines much have achieved double-digit growth each year from 2020-2022, or be an established brand with at least 15% growth in 2022, or a top 10 brand with at least 5% growth in 2022 and 15% growth since 2019. With these strict requirements within a struggling category, only 19 brands earned the honor this year.

Reviewing the list of “Hot Brands,” we see three clear themes and trends that these selected brands capitalized on to unlock growth with a younger generation of wine drinkers. We review below these examples of how brands are finding success in the wine category.   

Better-For-You

Bota Box Breeze and Yellow Tail Pure Bright were both awarded “Hot Brands” designations following significant growth. These two brands fall into the emerging better-for-you wine category, which includes wines marketed as low alcohol, low sugar or low calorie. According to Shaken News, the better-for-you segment has nearly quadrupled in volume terms in 2021 and was expected to reach 3 million cases in the U.S. by the end of 2022. Better-for-you wines are connecting with younger consumers who tend to drink less or when they do drink look for lighter options.

Sauvignon Blanc

Oyster Bay, Whitehaven, and Seaglass each earned “Hot Brand” distinctions and each portfolio leads with Sauvignon Blanc. According to the report, “this year, all major varietals in still wine had negative growth rates in depletions, with the exception of Sauvignon Blanc, which grew 1.5 percent on a trailing 12-month basis.” The growth of these three “Hot Brands” brands mirrors the success of the Sauvignon Blanc category. More and more younger consumers are pulling Sauvignon Blanc off the shelf on a regular basis.

Premiumization

One of the higher price point wines awarded the “Hot Brand” distinction was Daou Vineyards. The winery’s entry level Paso Robles Cabernet Sauvignon is $30 and considered part of the “Ultra-premium” price category. The popularity of brands at a high price point is reflective of another trend noted in the Report, consumers are leaving lower price segments in favor of better-quality offerings. Younger consumers are often drinking less, but spending more per bottle.

As more brands find new and unique ways to connect with younger legal drinking age consumers, the wine category will begin growing again. Examples from the Impact “Hot Brands” show that growth is not only possible in a declining category, but also provide a roadmap of the industry trends and themes driving their growth.