Red wine is a staple among wine consumers, dominated by well-known grape varieties yet driven by a surge of innovation and energy over the past decade. But in recent years, red wine has started to decline, showing larger losses over total wine as sparkling wines and non-wine alternatives steal share. Will red wine recover and rebound in the years to come?

A Strong Category Experiences Declines

Red wine is the largest wine subcategory on Drizly, holding 37 percent share of wine category sales in 2021 to date. This strength is the result of well-known grape varieties like Cabernet Sauvignon, Pinot Noir, and Malbec — the last of which really boomed 10 to 15 years ago — as well as stylistic innovation within the category. 

“Over the past decade, the red wine category innovated to capture consumer attention through red blends as well as leveraging outside category trends with whisky-barrel aged red wine brands,” says Ryan Lee, an analyst at IWSR Drinks Market Analysis. More recently, this has come in the form of red wines with lower sugar, ABV, and calories, which appeal to more health-conscious consumers.

However, red wine has started experiencing sales declines; its share on Drizly is down from 39 percent during the same time period in 2020 and 2019.

This trend is supported by broader off-premise sales data as well: According to Nielsen data for the 52 weeks ending Oct. 16, 2021, off-premise red wine sales volume dropped 7.1 percent year-over-year, compared to a 3.2 percent year-over-year drop for total wine. Though it did experience year-over-year gains during the severely Covid-impacted 52 weeks ending Oct. 17, 2020 (9.2 percent), those gains lagged behind those of total wine (12.1 percent).

“This share decline can be partly attributed to the growth that the sparkling and Champagne wine category has seen in 2021 to date, which is taking share from other wine categories like red wine,” says Liz Paquette, Drizly’s head of consumer insights. Over the 52 weeks ending Oct. 16, 2021, Nielsen reports a 5.9 percent year-over-year volume increase for sparkling wine.

Red wine does tend to experience seasonal shifts, typically in the fall and winter months. In 2019, red wine share peaked in both January (47 percent of share) and November (46 percent of share), while its 2020 peak occurred in March (46 percent of share), likely the result of late winter months coinciding with early pandemic stock-up behavior.

But this seasonality also presents increased competition as well. “For red wine in particular, the category is more pressured during colder months due to increased interest in whisky,” says Lee. “As whiskies increase in consumption in winter months there has been a detraction from red wine.”

Red Wine’s Leaders

By far, the most popular varietal red wine on Drizly is Cabernet Sauvignon, which is the only grape variety to experience share gains since 2019. It currently holds 52 percent of share, up from 50 percent in 2020 and 48 percent in 2019. “This is tied to premiumization in the red wine category, as Cabernet Sauvignon has one of the highest average unit prices among the top-selling varietal wines,” says Paquette.

Growth from trending red varieties has also impacted the category, says Lee, noting Pinot Noir from Washington and Syrah from Oregon as examples. Pinot Noir holds the second-highest share on Drizly (26 percent), holding steady over 2020 and down one percentage point from 2019, followed by Malbec (six percent, down three percentage points from 2019), followed by Merlot (five percent, which has remained consistent), Syrah/Shiraz (two percent), and Zinfandel (two percent). Red blends also hold eight percent of share among red wines on Drizly.

In recent years, Drizly users have increasingly turned to domestic wines over imported options; 80 percent of red wines purchased on the platform are from the U.S., which has increased from 76 percent in 2019 and 77 percent in 2020. “The growth in Cabernet Sauvignon is likely a major factor in U.S. share growth, as the majority of top-selling Cabernets are produced in the U.S.,” says Paquette. The majority of top-selling regions in 2021 to date are nearly all from the U.S., specifically California: Napa Valley, Sonoma Coast, Paso Robles, North Coast, and Central Coast. Only one — Mendoza, in Argentina — is abroad.

Among imported wines, Argentina holds the highest share (six percent of total red wine sales), though this has been on the decline since 2019. Italy is next with four percent share, followed by Australia (three percent), Chile (two percent), France (two percent), and Spain (one percent).

Drizly’s Top-Selling Red Wine Brands, 2021 to Date

1. Josh Cellars
2. Bota Box
3. 19 Crimes
4. Decoy
5. Meiomi
6. Apothic
7. Caymus
8. La Crema
9. The Prisoner Wine Company
10. Bread & Butter

Drizly’s Top-Selling Red Wine SKUs, 2021 to Date

1. Josh Cellars Cabernet Sauvignon
2. Meiomi Pinot Noir Red Wine
3. Decoy Cabernet Sauvignon
4. Caymus Napa Valley Cabernet Sauvignon
5. 19 Crimes Cali Red Snoop Dogg
6. La Crema Sonoma Coast Pinot Noir
7. Bota Box Cabernet Sauvignon
8. Apothic Red
9. JUSTIN Cabernet Sauvignon
10. The Prisoner Red Blend Red Wine

New entrants into Drizly’s top red wine brands list this year include Caymus, The Prisoner Wine Company, and Bread & Butter, while both 19 Crimes and Decoy have moved up the rankings in the top 10 list. The top-selling red wine brands and SKUs lists both highlight Cabernet Sauvignon’s increasing presence, with half of the top 10 SKUs being Cabernet Sauvignon-based.

Demographics and Unit Prices

Some of red wine’s declining share may also be attributed to generational shifts: Millennials under-index on red wine sales (49 percent of red wine share vs. 60 percent of total wine share), while both Gen X and baby boomers over-index (39 percent and 11 percent of red wine share, respectively, vs. 30 percent and eight percent of total wine share).

While the average unit price of red wine on Drizly is $18.41, this can vary significantly by grape variety. Varietal wines with a higher average unit price include Nebbiolo ($38.40), Sangiovese ($25.14), Cabernet Sauvignon ($20.29), Zinfandel ($18.99), and Pinot Noir ($18.83). Varietal wines with lower average unit prices include Montepulciano ($15.90), Syrah/Shiraz ($15.67), Merlot ($14.48), and Malbec ($14.35). 

Looking to Premiumization for Stabilization

Though red wine has a strong base, it is forecasted to decline by -0.7% CAGR from 2020 to 2025, according to IWSR Drinks Market Analysis. But this is a trend that is experiencing most still wine categories.“The total still wine market in the U.S. is forecasted to post volume category declines as consumers are gravitating to more spirits and ready-to-drink cocktails — namely seltzer and spirit-based cocktails,” says Lee. “As total volumes see losses, the premiumization effect will stabilize value.”

The stabilizing impact of premiumization is already apparent; according to Nielsen data for the 52 weeks ending Oct. 16, 2021, though off-premise red wine volume declined by 7.1 percent, its value only declined by 2.8 percent.

Lee also recommends that retailers stay on top of the trends that are driving growth within red wine — for example, lighter-style, low- or no-alcohol wines. “Retailers can also expect convenience-based size proliferation as consumers seek half-bottles as well as bag-in-box offerings based on the consumption occasion,” he notes.