Rabobank, headquartered in the Netherlands, is a financial institution with a strong focus on agriculture, and its sectoral analyses are taken seriously by professionals. In its Food & Agribusiness Research division, Stephen Rannekleiv has been following the wine industry closely. For readers who follow the wine world with interest, we’ve summarized his latest reflections.

Don’t look for references to our own country in the report—there aren’t any. But the Turkish wine sector is not immune to global developments. Even if Turkey is not mentioned by name, we can still benefit from both the analyses and the projections.

Rannekleiv points out that wine sales, which have been declining for three years, are the result of both structural and transitory factors—and that there are solutions available to counter the downturn.

What Has Happened Recently?

Here’s how he sums up the situation so far: “Almost no major market is in growth mode… and in the US, for both domestic and foreign suppliers, sales have been falling since the middle of 2022, quite sharply—and in a way that caught everyone off guard. The result has been an oversupply in the US market, and now everyone is looking for answers on how to get back to growth.”

This oversupply in the US is not the result of overproduction, but of declining demand—especially as financial pressures pushed down wine consumption.

Let’s recall: during the pandemic (2020–2021), the US wine market actually grew, fueled by consumers staying home and drinking more. But Rannekleiv reminds us that the slowdown in US wine demand had already begun before Covid:

“Volumes were leveling off or turning slightly negative. At that time, premiumization was underway—we were losing low-end volume, but the high end was doing very well.”

In 2022, however, the trend shifted. Inflation began to take hold, and some of the declines were clearly tied to that: “Consumer confidence has gone back to levels reminiscent of the global financial crisis or the worst days of Covid.”

He notes how this plays out in other drinks and hospitality sectors: “Consumption has shifted to smaller bottles—they’re not buying 750 ml anymore—they’re looking for value, and they’re moving away from fine dining toward fast casual restaurants.”

But the fall in wine is not only about purchasing power. Rannekleiv emphasizes that shifting views on the health impacts of even moderate alcohol consumption also play a role. And let’s not forget demographics: younger consumers, who are becoming a much larger share of the US market, simply don’t have the money. Their budgets are tighter.

The conclusion? Some reasons for the decline are “structural,” others are “transitory.” But when it comes to the economic-driven slowdown, Rannekleiv warns that inflation is “going to be sticky,” especially with wine price hikes and tariff burdens.

What Lies Ahead?

Rannekleiv asks: “At what point will consumer incomes really catch up with inflation?”

If incomes returned to pre-Covid levels, he argues, we might dismiss today’s slump as transitory. But for now, the situation threatens profitability across the industry—an issue set to be discussed at the next Drinks Business conference.

He outlines the dilemma: “Producers face rising costs of production, and passing those costs on to consumers is a major challenge. Wineries want to protect profit margins, but each price hike risks losing volume. The less volume you sell, the higher your fixed cost per unit becomes.”

This, he explains, is why wine is losing ground to other categories in the US: “The cost per serving of wine is much higher than for beer or spirits, which makes wine less attractive and spirits more appealing.”

What can be done? Rannekleiv is candid: “It’s hard, but at least in the US market, we haven’t done a very good job of creating entry-level products that make wine accessible and interesting at attractive prices.”

Over the last 20 years, nearly all efforts went into premiumization, pushing consumers up the ladder. That strategy worked for Boomers and Gen X, but today’s younger generation lacks exciting, affordable brands they would proudly bring to a party.

Sektör bunun farkında ve çözmek istiyor. Ama sorun şu ki bugün perakendeciler yeni şarap markaları eklemekle ilgilenmiyor. Aksine, perakendeciler şaraba ayrılan raf alanını artırmak değil, azaltmak istiyor. Özellikle de şişesi 10 dolar altı markalara pek ilgi göstermiyorlar.”

Retailers aren’t helping either: “They’re reducing shelf space for wine, not expanding it—and they have little interest in brands under $10.” The challenge ahead is to reset the value story, creating affordable, engaging brands that resonate with younger consumers and fit their budgets.

Concerns About the Wine Industry

Rannekleiv also calls out wine’s storytelling problem: “The industry keeps repeating the same narratives—grape quality, family history, vineyards, châteaux—but these don’t create a personal, emotional connection with consumers. Wine brands end up looking interchangeable.”

By contrast, spirits excel here: “Spirits have clear, compelling identities and connect emotionally with consumers.”

As US retailers trim wine shelf space, the weakest brands are being weeded out. Those that can’t connect are disappearing.

But there’s a silver lining: “For brands that stay, it’s like pouring gasoline on the fire—the winners get stronger, while the losers really suffer.”

Long-Term Outlook 

Despite the current storm, Rannekleiv remains cautiously optimistic: “For those in it for the long haul, the challenges are real but surmountable. The wine industry has seen many cycles before. This one, too, will end. The big question is when. But we shouldn’t assume declines will last forever—just as we shouldn’t assume growth will either.”

What About Turkey?

Everyone knows the political climate has not been favorable for wine production in Turkey. In 2021, production was reported at 82 million liters; by 2023, it had fallen to 65 million liters. Reliable figures for 2024 are not yet available, but indicators don’t suggest improvement. Few producers, if any, are increasing sales.

Much like in the US, Turkey saw a push toward premium wines in recent years. But today, producers are turning to lower-priced series to address collapsing purchasing power. The sharp decline in consumer spending has caught Turkish producers off guard, and now new solutions are emerging to adapt to the reality.

Final Word

As you can see, the reflections on the US market mirror our own situation in many ways. The economic crisis in Turkey will continue to weigh on wine. Yet the Turkish market still has its unique dynamics. We have indigenous grapes found nowhere else, and we have fearless entrepreneurs who keep founding wineries against all odds. As long as they exist, hope in Turkish wine will not vanish. 

So let’s not give up hope.