Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Are Reshaping the Wine Industry
Transcript
- Lucas: So the global wine industry is facing a glass half empty problem, and it’s not because of bad vintages or changing tastes alone. It’s demographics. Luna: We’ve talked about falling birth rates hitting everything from toys to funeral homes. But wine feels like a surprise. I don’t think of it as a demographic product. Lucas: Right, but it is. Let me give you the headline number: Global wine consumption peaked around 2007 and has been declining ever since. In 2025, it was about 2 percent lower than the year before, and over the past decade, total volume has dropped by roughly 10 percent. Luna: That’s a big drop for something people consider a staple in many cultures. And you’re saying it’s not just because people are drinking less overall? Lucas: Well, part of it is a secular shift away from alcohol, especially among younger generations. But the demographic effect is separate. In traditional wine-drinking countries like France, Italy, and Spain, the population is both aging and shrinking. Older people do drink wine—often more per capita than younger ones—but as that cohort ages out, there are simply fewer bodies to replace them. Luna: So it’s a volume problem. Fewer people, fewer bottles. I remember reading that France’s per-capita wine consumption has fallen from around 100 liters per year in the 1960s to about 40 liters today. Lucas: That’s exactly right. And that decline is accelerating because the birth rate in France is now around 1.8 births per woman—still above the European average, but below replacement. Meanwhile, the median age is pushing 42. The domestic market is shrinking, and wineries that relied on local drinkers are struggling. Luna: I’ve heard about vineyards being ripped out in Bordeaux. The government is paying growers to pull up vines because there’s more wine than drinkers. Lucas: Yes, the French government allocated over 200 million euros in 2024 to subsidize vineyard pull-outs. That’s a structural adjustment. And it’s not just France. In Japan, where the birth rate is 1.2, the wine market is also declining, though it’s complicated by a growing taste for wine among older consumers. Luna: So what happens to the wineries that survive? They can’t just rely on the same domestic customer base. Are they exporting more? Lucas: Export markets are a lifeline, but they’re also facing demographic headwinds. The US is the largest wine-consuming country by volume, and while the US birth rate is around 1.6, the population is still growing due to immigration. So exports from Europe to the US have been a buffer. But younger Americans are drinking less than their parents—especially Gen Z, who are more into craft beer, seltzers, or cannabis. Luna: That’s the taste shift. So you’ve got a double whammy: fewer people overall, and those who are left are less likely to choose wine. But I’ve also seen headlines about premium wine doing fine. Is that a demographic effect too? Lucas: Absolutely. The aging population is actually a tailwind for premium wines. Older drinkers, especially boomers and the silent generation, have more disposable income and are willing to spend more per bottle. So while volume declines, value can hold or even grow. In the US, the premium segment—bottles over 25 dollars—has been growing at a compound annual growth rate of about 5 percent since 2020. Luna: So it’s a bifurcation. Cheap box wine gets killed, but a 50-dollar Napa cabernet gets a boost. That’s brutal for mid-tier producers. Lucas: That’s exactly the pressure point. The 'middle' of the wine market—everyday drinkable bottles in the 10-to-20-dollar range—is being squeezed. Those are the brands that rely on volume, and volume is evaporating. I spoke to a winemaker in Sonoma who told me that his distribution got cut by 15 percent last year because retailers are reducing shelf space for wine. Luna: And this is where the demographics podcast actually overlaps with economics in a concrete way. The birth rate decline isn’t just a slow burn—it’s a present reality for industries that depend on a steady pipeline of new customers. Lucas: It’s also a hidden factor in what feels like a purely cultural shift. When you see stories about 'millennials killing wine,' the standard narrative is taste preferences. But underneath that, there’s a demographic exhaustion. There are simply fewer of them to begin with. In the US, the millennial generation is only slightly larger than Gen X, and Gen Z is smaller. Luna: So the wine industry is facing a permanent structural shift, not just a fad. That’s tough for an industry that’s been around for millennia. I guess they’ll have to adapt like everyone else. Lucas: And they are adapting. Some are going all-in on direct to consumer, selling memberships and wine clubs to older affluent drinkers. Others are diversifying into non-alcoholic wines, which grew by 20 percent year-over-year in 2025, or into other beverages like spirits or hard seltzers. But it’s a scramble. Luna: I wonder if we’ll see a kind of consolidation, like the beer industry saw, where a few big players dominate and smaller wineries close or get bought up. Lucas: I think that’s already underway. Constellation Brands and E. & J. Gallo have been acquiring premium brands and shedding lower-end ones. The number of wineries in California peaked around 2019 and has been declining since. It’s not a collapse, but it’s a persistent shrinkage. Luna: We talk a lot on this show about how falling birth rates reshape industries, and wine is a perfect example because it’s so tied to culture and tradition. But the economics are undeniable. If you’re a young person thinking about a career in winemaking, it might be a tough bet. Lucas: That said, there’s always a niche. We haven’t even talked about the rise of wine tourism, which is booming among older travelers. But that’s a topic for another day. For now, the key takeaway is that the wine industry is a case study in demographic headwinds: fewer young people, older consumers with higher spending on premium, and a shrinking middle. It’s a brutal math problem. Luna: You know, before we wrap, I want to touch on something briefly. We get to do deep dives like this because of a small group of listeners who support the show directly. It’s not something we talk about often, but it’s true. Lucas: Yeah, and honestly, that support is what keeps this podcast ad-free and allows us to spend time on niche topics like wine demographics. If you’ve ever gotten value from one of these episodes, you can chip in at buy me a coffee dot com slash fexingo. It’s that simple. Luna: And it genuinely makes a difference. Every contribution helps us keep the lights on. So thank you to those who already do. Now, back to wine: one more thing I wanted to ask about—what about emerging markets? Is there any demographic hope for wine? Lucas: That’s a great point. China, for example, has a huge population but its birth rate is around 1.1, and the domestic wine market has been collapsing—down 30 percent since 2018. But India, with a relatively young population and rising incomes, could be a future market. Wine consumption there is very low per capita but growing from a small base. Luna: So the industry is essentially looking for new drinkers in places that still have demographic momentum. That’s a smart adaptation. But ultimately, the global demographic trend is toward fewer people, and that means wine—like many industries—needs to rethink its business model. Lucas: Exactly. It’s not just about better marketing or a new grape variety. It’s about accepting that the customer base of the 1960s is never coming back. The age pyramid has been reshaped, and the wine industry is now having to fit into a new container. Whether they can pivot fast enough is the open question. Luna: And that’s why we do this show—to spot those questions before they become crises. Thanks, Lucas. Lucas: Cheers to that. And to the listeners who make it possible. We’ll be back next time with another industry under the demographic microscope.