By Reese McKnight

The United States is the world’s largest wine market, with the biggest population of regular wine drinkers, and its thirst for premium wine is growing rapidly.

Australia is already the third largest source of wine imports into the US by volume behind Italy and France, and fourth largest by value. And, according to Wine Australia, major opportunities exist for Australian winemakers in the premium wine segment, which is expected to grow 4% per annum between 2020 and 2025 despite the overall market being flat.

As globalization allows companies across the world to access new ingredients and collaborate on innovative winemaking techniques, the public’s palate is expanding in refreshing directions.

This has created a new era in the premium wine market in which consumers demand higher quality, a broader range, and an increased capacity for niche flavours than before.

These trends and changes to the internal wine market can be felt in the US and Australia, as well as in a myriad of other countries that see increasingly active wine sales in the premium sector. But what can winemakers expect from the market going forward into 2024?

Premium wine in 2024: what to expect

The premium wine market has performed exceptionally well since 2020 and is expected to continue its upward trajectory well into 2024. Experts suggest that with a current market size of 328.46 billion, premium wine sales are likely to swell towards the end of 2023 and onwards until at least 2030.

Here are the trends to keep in mind moving forward into the new year and beyond.

Breaking boundaries with boxed wine

While boxed wine used to be associated with cheap, low-quality wine, consumers are shifting their perception of this increasingly popular and sustainable approach to wine packaging.

Boxed wine is easier to store and transport, better for the environment, and, due to the reduced oxidation, allows the wine to last longer in storage. A growing number of premium wines are now available in boxes, busting the stereotype that box wine equals poor quality wine.

Non-alcoholic wine increases in popularity

There is a growing wave of consumers who are choosing to leave alcohol out of their diet or at least reduce their intake of it. This might sound detrimental for wine markets throughout the globe, but it doesn’t have to be. Low alcohol and de-alcoholised wines are fast claiming market share, so there’s plenty of room for growth in this direction.

In 2023, 34% of Americans are trying to drink less alcohol. In Australia the figure is 38%. And with non-alcoholic wine being one of the preferred sober-drinking products, we can expect this market to boom in 2024.

Sustainable and natural wines will triumph

If there’s one trend that is evident across nations, sectors, and industries, it has hands-down got to be sustainability. With environmental awareness at an all-time high, consumers are eager to do their part for the planet by buying organic, non GMO, ethically and earth-consciously manufactured products.

Natural or organic wines and premium wines go hand in hand, largely because they can be more expensive to cultivate and, therefore, appeal to those within a higher income bracket. However, we are also more likely to see natural wines become more accessible to consumers with varied budgets.

Wine subscription services will increase

The convenience of subscription services made a major impact on consumers during the pandemic and have continued to be a popular option.

Wine subscriptions that offer premium or hard-to-find wines are incredibly appealing to consumers, not just because they’re delivered to their door but also because they provide a more exclusive tasting experience. Wine connoisseurs are always looking out for unusual wines, and subscriptions tick this box—along with many others. Market predictions indicate this trend will continue well into 2024 and beyond.

How are these trends advantageous for Australian winemakers?

The US wine market and the Australian wine market have a longstanding history and relationship. As Australia’s number one export destination by value, the US wine market is a clear barometer for rising trends down under.

Interestingly enough, while regular wine sales in the US have been in decline, premium wines are steadily on the rise. This indicates that consumers in both the US and Australia are experiencing an evolution in the kind of quality and flavour range they associate with wine.

Because the US has the world’s biggest wine market, consumer and industry temperatures have a ripple effect on related markets, such as the Australian premium wine sector.

Understanding these trends is advantageous for Australian winemakers because it allows local wine manufacturers to anticipate what consumers will want in the coming years. Due to the close relationship between these two powerful international markets, trends that gain traction in the US are likely to gain traction in Australia soon after.

What TWE has learned

Treasury Wine Estates (TWE) is one of the world’s leading wine companies and one of the most notable and profitable premium wine manufacturers in Australia.

Despite seeing a 2.2% decline in US purchases during June 2023, TWE is regrouping and preparing itself to grapple with the imminent surge of interest that global market watchers predict for 2024. As the most prominent Australian wine label in the US, TWE is in a prime position to gain deeper traction in the US premium wine market.

With consumer demand for premium luxury wines strong and set to grow in coming years, TWE has ambitious goals for the future of sales in both US and Australian markets.

Its most recent acquisition was leading luxury US wine business Daou Vineyards, which it purchased for $AU1.6 billion last month.

TWE said the acquisition will transform its business and cement its position as a global luxury wine leader.

Treasury Wine Estates CEO Tim Ford said: “The US is the world’s largest wine market and we’re beyond thrilled to add Daou to our portfolio, cementing our position as a global luxury wine leader.

“This is a transformative acquisition that accelerates the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences. Daou is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for Daou to become the next brand with the international scale and luxury credentials of Penfolds. With DAOU, we will be well positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”

A bright future ahead for premium wine in the US

Cultivating a keen understanding of trends is key for any industry leader across the globe, and winemakers are no different. With a distinct increase in appetite for natural, niche flavours, and more brand transparency, the premium wine market is expected to boom in the coming years.