With the holiday season now in full swing, the red-bagged red wine industry is booming.
According to the Wine & Spirits Council, more than 4,000 businesses in the United States are selling or distilling red wine this year, up from about 2,000 in 2014.
Wine and spirits companies have been able to diversify their portfolios in the past several years, and it’s not just about being able to buy up more acreage, as well.
Wine makers are getting more creative with their ingredients.
And some are using it to develop a new market segment that could be a lucrative one: the wine business.
“The red-wine business is really on the upswing,” said Steve Littman, a wine industry analyst at Wine Spectator.
“It’s not as big as it used to be, and we see that as a good thing.”
And in 2018, the industry will see another surge in sales.
In 2017, the United Kingdom’s wine industry posted a record-high sales of $6.6 billion, according to industry group the Beverage Council of America.
In 2020, the British market grew by 4.6 per cent.
Canada’s wine sector was even bigger: its overall sales grew by 5.3 per cent, the largest increase since 2010.
Canada is the second-largest wine producer in the world, after France.
With such a massive market in the U.K., it’s easy to understand why wine makers are feeling the boom.
In addition to wine, the sector is also expanding into other food products.
In 2018, wine sales in the grocery sector rose by 12 per cent to $1.4 billion, while beer sales jumped 11 per cent in the same period to $2.1 billion.
As for the craft beer market, craft beer sales rose by 4 per cent last year to $3.3 billion.
And in the food industry, food is booming, too.
In the past three years, beer and wine sales have doubled each year, according the Wine Institute, an industry group.
It’s a sign that the craft sector is gaining in popularity, especially among millennials.
“Young people are drinking more and more beer and cider,” said Paul Smith, president of the Canadian Beverage Association, which represents the craft and premium beer industries.
“They’re looking for different types of beer and more wine.”
What does this mean for the wine industry?
According to Wine Spectators chief economist and beverage analyst Mike Haines, the resurgence of the wine sector could also be a positive for the industry’s bottom line.
“In terms of the industry, the wine companies are making money, and they’re making money at the margins,” he said.
“If you look at the profitability of the companies, the margins are very high, so if you’re going to invest in the growth of the beverage business, it’s going to pay off.”
In the long run, the surge in red wine sales could help wine makers diversify and diversify into other markets, too, which could be beneficial for the entire wine industry.
“I think that if you look across the whole of the global wine market, there are some regions where there’s a significant wine and beer market.
I think it’s a safe bet that those regions are growing,” Hain.
“There’s a lot of wine and craft wine in South Africa, for example, and I think that could make it a very attractive market for those producers.”
But while the wine and wine industry may be seeing an uptick in the next couple of years, the overall industry is on a decline.
According in a recent report from the United Nations, the global market for red wine, including sparkling wines, is down by about 1 per cent a year over the past decade.
And there’s no sign that that trend is going to change any time soon.