Sep 29, 2025 (MarketLine via COMTEX) --
Is premiumisation the silver bullet wine needs for growth, or are too many pinning their hopes on the trend?
Premiumisation is regularly cited as one saving grace for the wine trade amid depressing global sales-volume figures.
Despite significant macro-economic uncertainty, many continue to hang their hat on people drinking less but choosing to spend more when they do.
But how long can this trend continue? What is driving it? And are people really trading up, and up?
US premiumisation aEURoehas slowedaEURIn the US, data suggests premiumisation has already slowed. Analysis by Wine and Spirits Wholesalers of America's SipSource shows the gap between volume growth and value growth has narrowed significantly in the past year.
aEURoeThe number-one driver is going to be financial,aEUR explains SipSource analyst Dale Stratton. aEURoeAcross the spectrum, people are being more choiceful, broad-scale, with how they spend their money and that is having an impact on premiumisation.aEUR
Any shift in this trend moving forwards will be aEURoedirectly correlated to the overall economyaEUR, he says. aEURoeIf we don't see an uptick in the economy, premiumisation is likely going to remain challenged.aEUR
At the more-expensive end of wine, however, the story is different.
Robert Hanson, the CEO of The Duckhorn Portfolio (with wines ranging from $20-$230) says premiumisation is aEURoewhere the growth liesaEUR in American luxury wine.
aEURoePremiumisation is at the core of our current growth strategy," Hanson says. "While consumers are drinking less, the data clearly shows that wine drinkers are trading up. They are also gravitating to and supporting trusted wineries that deliver quality and consistency vintage after vintage.aEUR
Could premiumisation peak, even for luxury brands? No, Hanson says, though it could aEURoeplateauaEUR. He adds: aEURoePremiumisation raises the average price ceiling but it also broadens the perception of wine as a lifestyle and luxury experience, not just a commodity. That can be attractive to new consumers who see value in story, craftsmanship and provenance.aEUR
aEURoeThere's always going to be a consumer group out there that is premiumising, in every industry,aEUR Stratton at SipSource reflects. But will they be enough to keep the wine industry afloat? aEURoeThe answer to that is: aEUR~YesaEUR(TM),aEUR he says, with a caveat: aEURoeI am being hopeful.aEUR
A range of wines from The Duckhorn Portfolio. Credit: The Duckhorn Portfolio
Channel outlook: US D2CThe mid-Year Sovos and WineBusiness D2C report, released in September, revealed continued declines in shipment value and volume in the US as aEURoeoverall, the D2C wine-shipping segment is poised for another year of contractionaEUR.
However, online shoppers (though fewer) are spending more per shop and buying more bottles aEUR" leading Sovos to advise aEURoeleaning into premiumisationaEUR in the coming year.
aEURoeWhen you look at the Sovos ShipCompliant data, the premiumisation in that area is really strong,aEUR says Stratton. aEURoeHigher-price things are doing much better than lower-price things. That also makes me think that the consumer for higher-end wines is still out there. There's still a lot of room to grow.
The consumer for higher-end wines is still out there
Dale Stratton, SipSource
aEURoePrices are holding pretty steady for the wine category, so we do think premiumisation is driving this [rather than inflation]. It's going to continue. It's just not going to be as robust as it was in years past but we're hopeful that it does tick back up.aEUR
One winery aEURoeleaning inaEUR to D2C premiumisation is Willamette Valley Vineyards, where CEO Mike Osborn took the helm in May and is the founder of online retailer wine.com.
Just over half of the companyaEUR(TM)s sales come from D2C versus distributors, which includes tasting-room, online and wine-club sales. Osborn says for the first eight months of the year the average D2C selling price was up almost $5 a bottle YOY.
While more volume can be sold through the wholesale side of the three-tier system, Osborn says aEURoeto be competitive [you need to] get a customer who becomes a raving fanaEUR aEUR" for him, this is best done through direct sales and experiences that then translate to retail sales when people return home aEUR" as well as through the companyaEUR(TM)s 27,000 shareholders aEURoewho show up and are really there to support the brandaEUR.
By-the-glass boost in UK on-tradeIn the UK, C&C Group-owned distributor Bibendum Wine says premiumisation is coming from aEURoetwo anglesaEUR of shifting consumer behaviour. Firstly, people socialising less due to strapped budgets but, when they do go out, aEURoewanting it to really countaEUR.
Secondly, comes moderation. Andrew Ingham, director of on-trade sales, says moderation is leading to by-the-glass (BTG) offerings aEURoegaining much more relevanceaEUR for operators and an increased investment in preservation technology. Venues are then offering higher-priced wines by-the-glass, rather than just fast-moving entry-level bottles.
aEURoeI do think this is a culture shift. I don't think it's just something that we're going through right now because times are hard,aEUR Ingham says. But while the trend is aEURoesignificantaEUR, he adds: aEURoeIt's not significant [enough] where it's taking over volumeaEUR, and aEURoethere's still obviously significant volume of entry-level wines going through restaurantsaEUR.
Credit: Helena Lopes / UnsplashIn the US, meanwhile, Stratton says the on-trade is aEURoeupside down right nowaEUR. He says this is due, in part, to aEURoesubstantialaEUR financial pressure leading operators to reduce the quality of the wine they buy from wholesalers while maintaining average glass prices.
This slightly skews SipSourceaEUR(TM)s data, which is drawn from transactions between wholesaler and restaurateur/retailer, and so does not reflect end-consumer choices. But looking forward, Stratton says: aEURoeWe'll see this continue on, as the pressure remains on the cost side for on-premise retailers.aEUR
David Bowman, chief commercial officer at US wine group Ste. Michelle Wine Estates, questions the prices being charged to patrons.
aEURoeBroadly speaking, I do think wine consumers want better wines at the restaurants and bars they visit. But honestly, the prices that most restaurants and bars charge for wine aEUR" especially BTG aEUR" are too high," Bowman says. "This is adversely impacting younger consumers sampling, experiencing and adopting wine.aEUR
Balancing portfoliosWhere does premiumisation leave entry-level brands and larger wine groups with more diverse portfolios?
Up in Washington State, Ste. Michelle is confident in the promise of $15+ wines and of premiumisation but the majority of its volumes lie in sub-$15.
aEURoePremiumisation as a trend does have its limits, as volumes at these higher prices that consumers are buying simply cannot make up for the volumes lost under-$15 a bottle,aEUR says Bowman. aEURoeThere needs to be great wine available at lower prices.aEUR
Premiumisation as a trend does have its limits
David Bowman, Ste. Michelle Wine Estates
He says the affordable-quality proposition aEURoeis arguably Washington and OregonaEUR(TM)s calling cardaEUR, compared to regions like California where production costs have risen aEURoedramaticallyaEUR in the past two decades. aEURoeWines of substance, quality and character at these lower prices will continue to be an important part of our future.aEUR
Spain-headquartered wine group GonzAilez Byass says it sees a aEURoegeneral bi-directional trendaEUR in wine sales in the regions in which it sells.
aEURoeOn one side, increasing demand for less complex, easier-to-drink affordable wines,aEUR says chief marketing officer Marcos de la Torre MuAoz, aEURoeand at the same time, for special-occasion wines with a more complex profile, a pronounced premium image, and richer storytelling.aEUR
He says aEURoedriving up consumer perception of our wines aEUR" and therefore being perceived as more premium aEUR" is a key driver for usaEUR but premiumisation will be aEURoeequally important as adapting our offer to current consumer trendsaEUR like low-alcohol products.
In Australia, newly formed Vinarchy (a merger of Pernod RicardaEUR(TM)s wine assets and Accolade Wines), says its focus remains balanced aEURoeto bring more consumers into wine at all levelsaEUR.
Aaron Brasher, head of fine wine, says: aEURoePremiumisation will be a major driver of value growth for Vinarchy in the coming years, alongside innovation and sustainability. It will help us build long-term strength across the full breadth of our portfolio and markets.aEUR
With a chunk of its portfolio focussed on aEURoeaccessibleaEUR brands like JacobaEUR(TM)s Creek and Hardys, Brasher says aEURoeentry-level wines will always have a placeaEUR. He adds: aEURoeThey give new consumers a way into the category and give value-conscious consumers a reason to stay in wine."
The Vinarchy aEURoeFine WineaEUR stable, including Ysios from Spain and Church Road from New Zealand. Credit: VinarchyLast year, Aussie rival Treasury Wine Estates tried, unsuccessfully, to offload its cheaper aEURoecommercialaEUR portfolio, which included Wolf Blass and Yellowglen.
In July, the company created a new unit called Treasury Collective, housing the groupaEUR(TM)s lower-priced wine brands. The divisionaEUR(TM)s managing director Angus Lilley tells Just Drinks the luxury portfolio aEURoeremains a core driver of TWEaEUR(TM)s salesaEUR but Treasury Collective will play aEURoea vital role in driving category relevance and engaging the next generation of wine consumersaEUR.
aEURoeWe have increased confidence that Treasury Collective is not only important enabler of TWEaEUR(TM)s luxury-led growth agenda but also a contributor to the ongoing premiumisation of our portfolio aEUR" reflecting the continued shift in consumer demand toward higher-value, brand-led wine experiences,aEUR he says.
Brand-led premiumisingThe wine industry has responded to the allure of premiumisation by launching brands or trying to upgrade existing brands. But premiumisation is not a silver bullet, warns Polly Hammond, founder and CEO of digital-marketing agency 5forests.
With the less-but-better trend, aEURoethereaEUR(TM)s a belief that if a brand can tap into aEUR~betteraEUR(TM), they're safeaEUR, says Hammond. aEURoeThis causes me concern.aEUR
She explains: aEURoeWhen a client comes to us and wants to premiumise, it can take a year of research and behind-the-scenes discussions, decision making and planning before it ever becomes visible to a consumer. So, yes, I worry that wine sees premiumisation and aEUR~drink betteraEUR(TM) as a panacea without seeing all the facts.aEUR
On its own, premiumisation wonaEUR(TM)t sustain the wine category
Aaron Brasher, Vinarchy
Wine consultant Joe Fattorini adds: aEURoeThere is no aEUR~premiumisationaEUR(TM) wave out there like a law of nature that we must jump onto. People will happily aEUR" and willingly aEUR" pay more for a product or wines if, and we have to stress aEUR~ifaEUR(TM), they identify with it, and they see that wine saying something positive about themselves.aEUR
Hammond says increasing a brandaEUR(TM)s perceived status is about aEURoedefining howAweAare going to bring greater value to the lives of our customersaEUR and understanding their motivations for purchasing wine. aEURoeThose motivations can be as simple as clout building or hedonism, or as deep as legacy formation and self-esteem,aEUR she says. aEURoeAnd that's the competitive advantage that allows correct and premium pricing.aEUR
Premiumisation will undoubtedly remain an important trend for wine but certainly not the only one. While it is a aEURoekey driveraEUR of value, volumes still depend on entry-level-brand success.
aEURoeOn its own, premiumisation wonaEUR(TM)t sustain the wine categoryaEUR, summarises Brasher at Vinarchy. aEURoeThe future of wine depends on how well we adapt and innovate with things like mid- and low-alcohol options, new formats and more relevant ways of connecting with consumers.
aEURoeIf the industry embraces that change, we believe wine can secure its place with the next generation of drinkers and hold its own against other categories.aEUR
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COMTEX_469153979/2227/2025-09-29T18:03:25
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