Jamie Goode: Has wine lost its cool – for good?

Wine is in the middle of an existential crisis. The ‘thought leaders’ are out and about, busying themselves with AI-assisted look-alike-posts on Linked-In pointing out that the next generation who have reached drinking age – Generation Z – simply aren’t interested in wine, because they are all healthful and find that wine is snobbish and doesn’t meet their yearning for genuineness and connectivity.

Meanwhile, winegrowers are struggling with stagnant sales and are wondering whether wine as it is has a future. Can wine ever truly resonate with new generations in the way that it did, or is it going to fade away with old farts like me (I’m 1967, so I’m Gen X)?

These are all good questions. Here’s my take.

First of all, there is no such thing as ‘wine’ or the ‘wine industry’. We can’t begin to say anything interesting until we look under the bonnet and see that the engine is composed of many components that sort of work together, but are different. So we need to begin by segmenting the wine industry. The different bits all have different rules, and if we bundle them together we will get nowhere.

I’m also not a fan of segmenting by age group cohort. Some marketers, however, seem to believe that these age groups, devised as a sort of marketing shorthand to take a broad-brush look at smaller groups of the population, are actually a real thing. They aren’t. And the confounder here is stage of life. Young people were different to old people 50 years ago just as they are today. I behaved differently when I was young to how I behave today. I behaved differently when I was a young adult with no commitments to when I had a young family, and I behave differently now living in London with no kids on the books. There’s also the confounder of available income, but we’ll come to that later.

I think the sensible way of segmenting ‘wine’ is by market channel. There are several different routes from winery to customer, and the rules for each are different. In the UK, we have supermarkets who buy most of their wine directly, and favour buyer’s own brand (BOB, also known as private label) and soft brands of their own creation (wines they commission that look like branded wines but which aren’t). This is how most wine is sold: it’s mostly about very cheap wine, bulk shipped and bottled in market, and there is limited space in supermarkets for more expensive wines or wines from actual wine estates. Big brands will find their way. At the other end of the market we have what we call ‘fine wine’ which is its own market. Natural wine is also its own market: the wines are bought-in by a bunch of specialist agencies and then sold through dedicated wine bars and restaurants, and also some specialist retailers. Another channel is independent wine merchants: there are now more than 1,000 of these in the UK. They will buy from agents or importers (some agents also work as importers), and this is a good route in if you don’t have huge amounts of wine to sell. Then we have restaurants. Many will simply buy their entire list from a single regional wholesaler, and most of this will be cheap wine. But fancier restaurants are a brilliant route to market for interesting, more expensive wines. There are other channels, too, but you get the picture: the rules for each are very different, and they must be considered separately.

So back to the existential crisis. Wine is still cool. Young people like it too: go to any wine festival or natural wine fair and it will be full of young people. Interesting wine is cool, and it’s great to see how vibrant and exciting the wine offering is these days. Every wine region I visit has a whole bunch of new producers making cool wines, and this is a source of great excitement for me. I was in McLaren Vale and Barossa last week, and I kept getting tipped off about new producers making great wine. I went to a famous bottle shop in Adelaide and was blown away by how many interesting wines are being made in Australia these days. It’s the same in most countries.

The reason that wine is struggling a bit right now is hard to tease out, but it’s not because wine isn’t cool any more and young people are drinking hard seltzers or cocktails or craft beer instead. It’s not that at all.

At the bottom end of the market people are feeling the pinch, and wine has got more expensive without getting more interesting. People are genuinely worse off because of a range of economic storms that have been global in their impact. And when something becomes more expensive, it sells less, unless we are talking rich people and Veblen goods, and here we aren’t.

At the top end, in case you hadn’t noticed, interesting wine has got a lot more expensive over the last decade. And restaurants have also become a lot more expensive – in the UK this is because of massive increases in staff costs and energy costs, plus ingredient costs. And many restaurants use wine as a profit centre, so they’ve upped wine prices, too. People feel the sting a bit and eat out less, and less wine is sold.

I think the changes at the bottom end of the market are here to stay and that beverage alcohol is in deep trouble. Most of it doesn’t taste very good, and there’s over-supply. Supermarkets are selling very cheap wines (even though these have got more expensive of late) and these cannibalize the sales of more expensive, and potentially more interesting wines. I think it’s going to be messy at this end of the market for some time to come. And this is most wine.

But for more interesting wines, I think we are in a temporary sticky patch, and there’s a bright future for them. People making wines that have character, are truly sustainable, and which meet the needs of younger, interested drinkers, have a lot to be hopeful about, even though this current market is very tricky indeed.

• Jamie Goode is a London-based wine writer, lecturer, wine judge and book author. With a PhD in plant biology, he worked as a science editor, before starting wineanorak.com, one of the world’s most popular wine websites.