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Azur.I: Azur Intelligence

 

At Azur Associates, one of our key goals is to provide our clients with the up-to-date, insightful information and analyses they need to make the best decisions for their business.  We have two seasoned team members dedicated solely to this task.  While, of course, we can’t release full studies that are confidential to our clients, we enjoy sharing some highlights as well as perspectives on more public situations in the industry.  This is Azur.I: Azur Intelligence.

 
 
 
 

Azur Associates Wine Market + M&A Review | 2024 Summary + 2025 Outlook

In 2024, the wine industry continued to undergo structural changes driven by shifting consumer behaviors, economic pressures, and evolving market dynamics. While total wine consumption declined, select segments and price points showed resilience. The industry's long-term success will depend on adaptability, strategic decision-making, and a commitment to meeting consumers where they are.

2024 WINE MARKET Review

The U.S. wine market contracted further in 2024, with total volume returning to 2012 levels. The primary challenge is not the number of wine consumers but the declining frequency of wine consumption. Inventory management remained tight across the three-tier system, limiting price increases and making new product launches more difficult. While the under-$15 segment continued to decline, wines priced between $15-$25 held steady, and those above $50 saw modest gains. The "better-for-you" category, including non-alcoholic and health-conscious wine alternatives, continued to grow.

The number of U.S. wineries declined for the first time in memory, signaling a shift as the industry recalibrates. At the same time, premium vineyards in top regions remained in demand, though valuations softened. The direct-to-consumer (DTC) channel saw further declines in shipment volume, with the lower-end struggling while high-end wines held steady. Key themes emerging from the year included consolidation, evolving consumer engagement, and a focus on efficiency.

2025 WINE Market Outlook – KEY POINTS

  • Stabilization and consolidation will be key themes as the industry continues to "right size."

  • Alternative wine-based beverages will continue to gain traction, while traditional wines face challenges.

  • Imported wines under $12 will outperform domestic options.

  • The "better-for-you" category will expand with increased product innovation.

  • DTC and on-premise channels will continue to struggle for growth, requiring new engagement strategies.

  • Wholesalers and retailers will maintain strict inventory controls, limiting price increases and new product launches.

2024 Wine M&A Review

The wine M&A market was defined by a mix of rationalization, selective acquisitions, and valuation resets. While there were several notable transactions, only one deal surpassed $250 million—Butterfly Equity’s acquisition of The Duckhorn Portfolio. The Vintage Wine Estates (VWE) bankruptcy had ripple effects, disrupting market activity and depressing valuations for comparable assets.

Luxury-tier brands with strong cash flow remained attractive to buyers, and high-quality assets still commanded interest, though with greater scrutiny on price. Larger wine companies continued to pivot, with some expanding into spirits and other beverage categories. 

2025 Wine M&A Outlook - Key Points

  • Transaction activity will remain selective, with buyers focusing on cash flow-positive brands and high-quality vineyard assets.

  • A number of wineries will continue to be rationalized rather than sold outright.

  • The "pick-and-shovel" suppliers and service providers will see increased consolidation.

  • Large strategics may further diversify beyond wine into spirits, beer, and RTD beverages.

  • While premium vineyard assets will still attract buyers, valuations will remain cautious.

  • The ability to find buyers for many wineries and brands will be increasingly difficult.

Details on these key points can be found in the Azur Wine Market + M&A Review | 2024 Summary + 2025 Outlook.

Patrick DeLong