Washington wine and beer makers confront falling demand and shift to premium and low-ABV products
A drop in U.S. drinking, especially among Gen Z, is forcing Washington’s wine and beer sectors to cope with oversupply, tariffs and inflation, prompting a move toward premium wines and lighter beers.
National alcohol consumption has slipped to an all-time low, with just over half of adults reporting any drinking and Gen Z participation hovering around 50%, according to a recent Gallup poll. Washington’s wine and beer producers, who expanded output during the pandemic, now face a surplus of product and shrinking demand. Chris Stone, deputy director of the Washington State Wine Commission, points to a worldwide wine oversupply and the loss of Canada as a key export market due to tariff disputes, which has hit the $10-$15 per bottle tier hardest.
Premium wines priced above $50 remain robust, a trend illustrated by DeLille Cellars’ success under CEO Tom Dugan. Craft brewers, unable to pursue premiumization, are turning to lighter 3-4% ABV or non-alcohol beers, according to Barry Chan of Lucky Envelope. The industry also wrestles with rising costs from inflation and competition from ready-to-drink cocktails and cider, threatening jobs in a multi-billion-dollar sector.
Why it matters
The shift in drinking habits threatens jobs and revenue in Washington’s major wine and beer industries.
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