Retiring 'Baby Boomers' may damage US wine sales growth, say researchers

(Decanter) - Young wine drinkers in the US will struggle to match the financial firepower of the retiring 'Baby Boomer' generation in the next decade, potentially putting pressure on sales, researchers have warned.

California's wine producers are hitting something of a sweet spot in 2014, with higher consumer demand and improved financial health flowing alongside strong, back-to-back harvests. There has also been investment in other regions, including Oregon and Washington, but analysts at Silicon Valley Bank believe tougher times lie ahead.

In their state of the industry report for 2014, the analysts warned of a coming lapse in consumer purchasing power as the wealthy 'Baby Boomer' generation reaches retirement age. 'Baby Boomers' aged between 48 and 65 account for 44% of US wine sales and are retiring at a pace of 11,500 per day, the analysts said.

In 2013, total US wine consumption rose by 1.9% to reach 318m nine-litre cases, with a value of $28.9bn, according to the US Beverage Information Group's 2013 Wine Handbook.

The Silicon Valley researchers believe a key pressure point will arrive within the next decade, and probably in around seven years.

They likened the situation to the retirement of the World War Two generation in the mid-to-late 1980s, and a concurrent drop in wine consumption in the US until 'Baby Boomers' picked up the slack in 1994 and propelled consumption to two decades of unparalleled growth.