According to a recent industry report from the Silicon Valley Bank, the United States premium wine industry is in the midst of an existential crisis. Although exceedingly popular in the 1990's due to their wide adoption by the boomer generation, for the last 20 years, premium wineries have experienced a steady decline in sales growth. As more consumer research surfaces, industry leaders are faced with the uncomfortable realization that the exceptional reputation and world-renown health benefits of their product are no longer appealing to the needs, style, or values of the new and emerging consumer base: millennials.1
In addition to the lack of adoption by millennials, the wine industry faces stiff competition from other alcohol categories, where the marginal utility far exceeds their grape-based competitor (i.e., spirits offer more ethanol per mL). With 70% of American consumers indicating that they would be switching to cheaper food and staple alternatives due to inflation fatigue,2 there is a growing impetus for the premium wine industry to solidify its position in the American household, not only to survive the economic downturn, but to emerge in the next generation.
In this study, we hope to provide valuable insight into which factors contribute the most to US wine product prices. With this information, we hope to enable the premium wine industry leaders to develop and implement data-driven business strategies and to strengthen an otherwise languid influence over the millennial consumer base. The results of this study would contribute to research efforts from a wider network of private and academic partnerships.