Greg Sherwood MW: Why young people are ditching fine wine

The fine wine market has long consoled itself with a comforting explanation for its generational problem: prices are simply too high, and this keeps younger, less wealthy consumers on the outside looking in. It is a convenient narrative, and also one with real evidence behind it.

But a closer look at UK and European market data suggests price is a necessary rather than a sufficient explanation, a real constraint, but also one entangled with health driven moderation, cultural disengagement, and a genuine crisis of relevance among younger drinkers.

Within that complicated picture, South Africa looks unusually well placed to convert value-for-money into growth, though its own top producers are starting to test the very ceiling the rest of the fine wine industry is struggling against.

Price as one barrier among several

As we near the end of 2026, industry research from IWSR, the global leader in beverage alcohol and data insights, consistently frames price as one of the constraints rather than THE constraint. Its 2025 work on sustainable and alternative wine found that younger consumers are the primary growth engine within that category, yet uptake is held back by a combination of limited choice, price sensitivity, and weak awareness, not price alone.

Crucially, the same body of research finds real resilience in premium price segments even as overall consumption falls, and notes that under-34s already account for a substantial share of wine drinking in the UK as well as Germany, a market I just spent a week in, at around 22%. That is difficult to square with a simple story of price exclusion, since if price were the dominant barrier, premium segments would be the first to suffer, not the ones showing relative strength.

What is undoubtedly retreating in the UK market is volume, not necessarily value. UK wine import volumes fell sharply in 2025, with traditional bulk suppliers losing a significant share, even as premiumisation trends such as English sparkling wine displacing Prosecco; growth in low- and no-alcohol wine; and a shift towards lighter, more ‘authentic’ styles continued.

This starts to look less like consumers being priced out of wine altogether and more like a restructuring of demand, with fewer bottles but often better ones being consumed, alongside a parallel migration towards moderation and alternatives driven as much by health and lifestyle concerns as by cost.

In the UK, alcohol duty reform, which now taxes by ABV strength, has added a further wrinkle, making higher alcohol still wines relatively more expensive while favouring categories like sparkling wine, a policy-driven price effect layered on top of consumer choice.

At the very top of the market, the picture is more clearly price sensitive. The broad-based fine wine correction of 2022-2025, and its tentative recovery narrative in 2026, is fundamentally a story about price discovery after a speculative bull-run. Analysts describe previously ‘oversold’ Bordeaux, including First Growth labels, as only now re-engaging with long-sidelined buyers after price reductions, and note that absolute value increasingly matters with Super Seconds priced around £60-£70 (R1,300-R1,550) being chosen over unproven Burgundy names at similar levels.

Fine wine prices also correlate closely with interest rates, since low rates on cash push investors and collectors towards wine and other real assets, while higher interest rates do the reverse. This is precisely what one would expect if price were operating as a genuine allocative constraint on an informed, price-aware buyer base, with collectors and investors responding to price the way any asset buyer does.

This is a different phenomenon from the “younger consumer never starts drinking wine at all” problem, which is driven more by shifting tastes, moderation, and unfamiliarity rather than by ‘price sticker shock’ on a £15 supermarket bottle.

Spending time in Germany over the summer has also been fascinating, as this market illustrates more clearly how quickly macroeconomic pressures can convert a price constraint into a demand collapse, sharp volume and value declines tied directly to inflation and cost-of-living pressures, perhaps more similar to the local South African market, but being more distinct from the UK’s more premiumisation-led restructuring. This regional divergence within Europe itself argues against a single uniform ‘price barrier’ thesis, suggesting the binding constraint does indeed vary by market and also by price tier.

Where South Africa sits

South Africa’s export strategy is built almost entirely around this nuance. Rather than compete on volume against oversupplied Australian and New Zealand bulk wine, Wines of South Africa and South African producers in general, have prioritised ‘value over volume,’ with the 2025 results showing export volumes falling while the UK, Canada and Sweden delivered encouraging value growth in packaged wine specifically.

The UK remains South Africa’s largest export market, and value’s share of UK exports has been rising even as bulk volumes have softened, precisely the premiumisation trajectory that seems to be rewarded across UK and European markets more broadly.

At the top end, as I regularly tell producers, South Africa’s positioning is genuinely compelling on a quality-to-price basis. Critics and commentators have repeatedly highlighted that producers such as Kanonkop, Sadie Family Wines, Klein Constantia, Alheit Vineyards, Raats Family Wines and Mullineux now compete on quality terms with Old World benchmarks while remaining comparatively affordable – a 94-95/100 point South African wine commanding well under £150 (R3,300) per bottle is common, whereas equivalent scores in Bordeaux or Burgundy routinely command multiples of that price.

This is close to an ideal entry point for the Millennial and Gen Z collector market segment, that research shows are increasingly entering fine wine through digital platforms, social proof, and ‘horizontal discovery’ rather than through inherited cellars, and that is actively seeking authenticity and value rather than merely legacy prestige.

That said, the ‘affordable icon’ window is starting to narrow. Secondary-market activity for South African icons has intensified, with record auction results at Bonhams, Christies and Sotheby’s for Cape Winemakers Guild parcels, verticals of Kanonkop’s Paul Sauer, and continued interest in Sadie Family and Alheit lots. Liv-ex too has reported increased trading activity in South African fine wine generally.

As critical acclaim, secondary-market liquidity and international brand-building compound, the very producers best positioned to convert quality recognition into pricing power are, naturally, the ones most likely to see prices rise ever closer toward Old World levels. The market is still young and comparatively illiquid next to Bordeaux and Burgundy, which limits how quickly these price rises can happen, but the general trajectory seems unmistakable.

So, price is a real barrier in fine wine, but it seems to operate unevenly, being a first-order constraint for price-sensitive collectors and for markets under macroeconomic strain, and a secondary-factor behind moderation, health trends and shifting cultural relevance for the broader pool of potential younger consumers the trade most wants to recruit.

South Africa is currently one of the best positioned origins to exploit this gap, offering genuine quality at a meaningful discount to comparable Old-World alternatives. But even its own flagship producers are the clearest evidence that ‘affordable excellence’ is a phase, not a permanent state. The more successful South Africa builds its reputation, the faster its top wines will erode the very price advantage that is currently fuelling their growth.

• Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years traveling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London, working his way up to the position of Senior Wine Buyer over 22 years. Sherwood currently consults to a number of top fine wine merchants in London while always keeping one eye firmly on the South African wine industry. He qualified as the 303rd Master of Wine in 2007.