Alcohol consumption is seeing its lowest levels since 1962, and as early as next year, Ireland will be the first country to prominently print warnings on labels linking drinking to cancer and other illnesses. What does this mean for the wine industry? We spoke to Esther Mobley, wine critic for the San Francisco Chronicle, who last visited us to discuss Fred Franzia, the man behind Two Buck Chuck.
Evan Kleiman: My understanding is that alcohol consumption went up during the pandemic but now moderation is in vogue with non-alcoholic wine and spirits gaining popularity. How is the wine community responding?
Esther Mobley: Well, the California wine industry, which is a $55 billion industry, is scrambling to try to figure out how to meet this moment. It's worth stepping back for a second. Wine consumption, specifically in this country, was really on a seemingly unstoppable growth trajectory for about 30 years. Starting in the early 1990s, a lot of people trace this to a single episode of 60 Minutes about the "French paradox," the observation that French people have lower rates of heart disease despite having a diet that was rich in butter and red wine, lived longer, and had better health outcomes that really set off helped set off a wine boom in this country. For three decades, wine consumption in this country steadily grew every year, and a huge industry rose up around it. Many wineries opened in California.
Then, it started to level out right before the pandemic but the pandemic shifted things dramatically. Everyone was stuck at home. People tended to drink a lot more. We saw retail alcohol sales skyrocket while, of course, alcohol sales from bars and restaurants were plummeting as many of them were closed. You may recall from this period, there was this kind of celebration of drinking in our culture in that moment, I think. People were talking about their "quarantinis" that they were clinking. A lot of California wineries started producing a lot more wine during this period because they saw that consumption was going up, and they thought, well, demand is up, so let's increase supply, too. Then, things kind of fell off a cliff.
Wineries had this excess wine and demand was not continuing to climb at the rate it had during the early pandemic period. Meanwhile, there was this phenomenon that analysts started to refer to as "pantry stocking," where people had maybe purchased enough alcohol in those early months of the pandemic to last them through a year or two, so people weren't just buying more and more wine over that period.
Then, of course, there's been a shift in the cultural understanding of wine. There's been a lot of health news. The World Health Organization declared that there's no safe level of alcohol consumption, and that is certainly affecting how people are drinking today.
Yeah, with increased health warnings linked to alcohol consumption and a general lack of interest in imbibing from the youngest generations, is alcohol having its tobacco moment?
Well, it could be. The World Health Organization warning is certainly a big, big statement. The US has not made any such proclamation. Our government hasn't but there's a review underway, as there is every five years, of the official US Dietary Guidelines, and there's a lot of attention being paid to that. Since those dietary guidelines have been in effect since the mid-1980s, they've never wavered. They've always said the same thing when it comes to alcohol consumption, which is that one drink a day is safe for women and two drinks a day is safe for men. But there's an expectation that that could shift this year.
The alcohol industry would point to the fact that there's several members on the committee that will be informing this decision who are known anti-alcohol voices and have accepted funding from temperance organizations. So there's a lot of debate around this. It's a bit of a fraught subject, where the truth in some of this scientific data actually lie. Regardless, it's clear that the message is getting across to a lot of people, and a lot of people are certainly cutting back on alcohol for health reasons.
The tobacco industry denied that cigarette use was addictive. Are the wine and spirit industries acknowledging in any way health risks associated with consumption? And are they participating in finding alternatives or embracing moderation?
I would probably take a little bit of issue with the framing of this, that we know [alcohol] to be exactly equivalent to tobacco. No alcohol producer in this country would contest that excessive alcohol consumption is bad for you. I think that's widely understood, universally agreed upon, drinking a lot is bad, just as eating a lot of sugar is bad and a lot of other things. I think the scientific consensus around tobacco use is that zero tobacco use is good, right? There certainly is no safe level. What we're talking about when we get into the scientific debate that's happening here around alcohol is around moderate alcohol consumption. That's where people are focusing these questions now.
The big producers now that are driving alcohol-free wine, non-alcoholic wine are wine producers. A lot of them are adding non-alcoholic wine options to their portfolios. You see this happening really widely in the beer industry too. So many breweries are producing non-alcoholic beer now. Also, there's a real market emerging for low-alcohol wines, wines that have had part of their alcohol removed, not entirely. A wine that might normally be somewhere around, let's say, 12% alcohol, might now be 8% alcohol. There's a big growing interest in those, too. They're an industry that's trying to find a product that meets what consumers are interested in, and are responding swiftly to this interest in lower and non-alcoholic wines.
A vineyard in Napa Valley, one of California's most famous wine-growing regions, welcomes visitors. Photo via Shutterstock.
Can you briefly explain the process of de-alcoholized wine? Do you have any labels to recommend? We should say that de-alcoholized wine is different from infused concoctions that are drunk as wine simulacrums.
Yeah, there's essentially two types of non-alcoholic wine. One is the latter that you talked about there. The industry tends to refer to those as wine alternatives. There are some really good versions of those. One of my favorites is called Proxies. Another is called Studio Null. Those are mixes of juice and tea and herbs and spices. I wouldn't say they usually taste exactly like wine but they are something of an approximation of it. The other type is de-alcoholized wine, so wine that started out as regular wine, grapes that were fermented and then they removed the alcohol from it. There's not a single process of doing that. There are a couple of new companies coming to market right now, in fact, with new technology to do that, but it involves a process called reverse osmosis.
One is a Sauvignon Blanc called Buzzkill. It comes in a can. I like those. Those are a Bay Area company. I think Kally, which is another wine alternative, is good. One of the ones I see a lot around the Bay Area is called Leitz. It's from Germany. They're de-alcoholized wines, a lot of Rieslings. They can be a little bit sweet but I think pretty much pass nicely for wine. And as I said, Studio Null, I think is pretty good. Muri is from, from Denmark. It's another wine alternative that I think is pretty good. I got a lot of experience with this when I was pregnant a few years ago.
Typically, what happens is at the very end, they'll add a little bit of regular wine back so there will be a trace amount of alcohol in it. Technically, it can be sold as a non-alcoholic wine if it has up to .05% alcohol in it to add back some of the flavor. There is a big challenge with these products, which is that alcohol in wine doesn't simply add ethanol, an intoxicant, it adds all kinds of other components to how the wine feels. It adds texture, it adds structure, a lot of flavor and aromatic compounds are heightened by the presence of alcohol. So anyone who's had you know more than a couple of non-alcoholic wine options is probably familiar with the fact that they often can taste artificial or sometimes they don't taste that great. But there are a few that I think are better than others.
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Does either red or white work better as a de-alcoholized wine?
White wine tends to work better as a de-alcoholized wine, I find. It's really challenging to get red wine right. Red wine has components like tannin and color compounds that can be tricky when you're dealing with this kind of chemical matrix of what's in a wine. On the whole, white wines, I think, tend to taste better among the de-alcoholized wines. And sparkling wine, I would say, tends to be the best. You're getting back some of the texture that you've lost from alcohol with the bubbles.
Does lower consumption rates among the latest generation of legal drinkers affect wine sales? Does higher income and age translate to more consumption and thus higher wine sales?
That's a great point, that volume consumption is down but in some areas of the wine industry, value is actually up because people are buying more expensive wines. As early as, I would say, 10 or 15 years ago, we started to see that higher priced categories of wine were growing faster than the cheapest categories of wine. Still, to this day, what analysts would call the luxury end of the wine market is doing a lot better than the bargain end. It's not a monolithic industry. There's a lot of different corners of it. We cover a lot in the Bay Area, individual wine bars and restaurants that still say they're thriving and selling a lot of wine and finding their little niche audiences.
Let's talk about tariffs for a second. How are these looming tariffs affecting inventory and sales?
Everyone is just waiting to see what might happen and what might change as is true for all industries, I think, with tariffs right now. At one point, Trump on Truth Social was threatening 200% tariffs on all European wines. That, it looks like, is not coming to pass. But even a threat of that certainly changes behavior. When wine importers are going to bring a container of wine over from, let's say, Europe, to the US, it can take a couple months for that ship to cross the Atlantic. So you don't really know when you have it set out from a port in France, if by the time it arrives in New Jersey, you will suddenly be slapped with some much higher fee. So that's a really dynamic situation that importers are trying to constantly pay attention to.
Some American industries, let's think about something like steel, might view tariffs on foreign competitor goods as a boon to their industry. But it's a little more complicated when it comes to wine, specifically, because in this country, we have this three-tier system where the importer or supplier of wine is separate from the distributor, who is separate from the retailer, and that's mandated into our law. Every domestic producer of wine here is dependent on the same wholesalers and essentially the same system as imported wines are.
So if you're a California winery, the distributor that's selling your wine in New York is inevitably also selling a lot of wines from France, Italy, Spain, Germany, et cetera. And if that distributor is really struggling, they're not going to sell your wine very well. Some distributors are, instead of a 10% price raise on just the imported wines, they're spreading that out. So there might be a 5% increase on a European wine and a 5% price increase on an American wine, too. Because of the interconnectedness of all wineries in this industry and how things get sold, the tariffs are not at all being embraced by many American producers. Now, we've heard from some American producers who are in favor of the tariffs, but I would say that is not the most vocal part of the industry we've been hearing from.
Beyond obvious concerns with deportation and ICE's recent presence in California, how will labor be affected on the state's vineyards? Do we know yet? Can we expect disruptions in that part of the supply chain?
That's a question we're going to be looking at and following very closely. We're following it right now. We're not yet in the period of the year that is the busiest in vineyards. That would come in the fall during harvest time. It'll be a big question, what's going to happen to labor then. I will say, more and more California vineyards, like a lot of California farms, are embracing mechanization for certain parts of the vineyard labor. There's been a shortage of vineyard labor for years as fewer people do the work, so I don't know if this is an opportunity for more mechanization if there's fewer people working in the fields.
We've been talking about all of this bad news and uncertainty for the wine industry. Are there any bright spots you would like to highlight?
There's still a lot of great wine being made, I will just say, and every week it seems, I'm discovering some new producer that I didn't know about before and that I'm excited about. These troubles have not at all diminished the quality of wine being made in California and the passion of its producers and its makers. The industry is going to have to figure out a new way forward but that is, I think, part of the life cycle of an industry, of a business that you know grew really substantially annually for 30 years and now is going to have to figure out what its future looks like.