Wine at a crossroads: urgent need for innovation or risk losing the future. At Wine Paris, Circana's stark analysis

The key to survival is innovation—without it, wine and spirits risk their future. This is the warning from Ananda Roy, analyst at Circana. His speech at Wine Paris was a wake-up call for the beverage industry, accompanied by essential recommendations for businesses. The message is clear: the wine and spirits industry is at a turning point. Changes in consumption habits, combined with economic pressures and evolving market dynamics, "necessitate a fundamental redefinition of the sector."

Roy, who serves as SVP Thought Leadership Europe & CPG Growth Advisor at Circana, delivered a talk titled Wine & Spirits – New Horizons in a Changing World. And he did not mince words: "Continuing with the same strategies is no longer sustainable." The industry must "embrace disruptive innovation while respecting its heritage and adapting to new consumer needs."

Ananda Roy - Circana analyst

More demanding consumers

The numbers paint a clear picture. Across the six largest EU markets, alcohol sales—worth €69 billion—are declining by 1.1% in volume, with wine down 1.9% and spirits dropping 4.4%. Inflation is keeping values afloat, but organic demand remains weak, highlighting the urgency for industry transformation.

The crisis impact is being softened by rising demand for premium products and personalised experiences. Consumers, Roy explains, want to go "beyond the drink" and seek experiences that align with their values: health, sustainability, and authenticity.

So how should the industry respond? "Not just by launching new products," says Roy, "but also by changing the way the sector interacts with consumers, embedding sustainability into its core identity, and making wine and spirits appealing again. Brands that understand and address these needs will shape the future of the industry."

A Generational Shift

In his speech at Wine Paris, Roy highlighted a major generational shift. Today, nearly a quarter of consumers aged 25 to 35 have stopped purchasing alcohol, while an additional 13% are delaying their purchases.

This trend, Roy explained, is linked to several factors: Greater health consciousness, economic pressures, growing preference for innovative and functional beverages that provide unconventional alcohol alternatives

Slow innovation

One striking point from Circana’s analysis at Wine Paris was that, despite premiumisation supporting value, and a 2.3% rise in ready-to-drink spirits sales, overall innovation has slowed significantly.

This is evident in the 9.2% drop in new product launches in 2024. The industry is lagging while trends such as canned wines, functional non-alcoholic beverages, and experiential consumption are rapidly gaining traction. In this context, Roy stated that "social media and influencers will be crucial."

Key recommendations for the industry

Roy concluded his speech with four key takeaways for businesses:

Focus on no-low alcohol, functional beverages, and premium experiences—in other words, reinvent the product portfolio. Utilise advanced tools to forecast demand by leveraging data analytics. Strengthen partnerships with retailers to align sustainability initiatives and innovate in the ready-to-drink segment. Shift from traditional marketing to social media strategies to engage younger generations—who are increasingly fragmented and have less time to spare.