There’s a long piece on the BBC about young adults increasingly turning to prescription drugs rather than alcohol. That, together with greater health awareness, the growing use of other drugs and the rise of prescribed weight-loss drugs, made me wonder about the effect all this has on wine consumption.
Wine drinking tends to make up a larger share of alcohol consumption as people get older. A particularly useful UK source is Defra’s Family Food dataset for the 2024 financial year, which reports household purchases of “wine and champagne” according to the age of the household reference person.
There is roughly a sixfold difference between the youngest and oldest age groups, which broadly fits with what I have observed myself. This is a gross generalisation, of course, but older people often seem to think nothing of consuming one or several bottles of wine over the course of a week in a way that younger adults increasingly do not.
Something about this bothered me, though. People aged 16–24 make up only a relatively small proportion of the population, so why should a change in their behaviour have such a large effect on the future of the wine market? The answer, I think, becomes clearer through a rather unlikely comparison with government bonds.
We regularly hear that unpredictable government policy, or decisions that investors dislike, can unsettle the UK bond market. Bond yields rise and, we are told, borrowing becomes more expensive for the Government. For a long time, I couldn’t quite get my head around this because Government bonds have already been issued and their payments are fixed, or in some cases linked to inflation. If I own, say, a Government bond paying 5%, the Government’s obligation to me does not suddenly become more expensive because yields in the market have risen. The terms of that bond have not changed.
The answer is that government debt is constantly maturing and being replaced. Old bonds reach the end of their lives and the capital has to be repaid, but because the Government generally still has the debt, it issues new bonds to replace the old ones. Much of this new issuance is therefore not borrowing to fund some entirely new spending spree, it is refinancing borrowing that already exists. If an old bond paying 2 per cent matures and has to be replaced with a new bond paying 5 per cent, the cost of servicing that same underlying debt has risen considerably.
And that, I think, is a useful way of looking at wine consumption. The people drinking the most wine today are getting older and, in the rather brutal language of the bond market, they are gradually “maturing”. The important question is not simply how much wine today’s 20-year-olds are drinking now, but whether they will develop the same drinking habits at 40, 50 or 60 that today’s older generations did.
If they do not, then the heavy wine-consuming generations are gradually disappearing without being replaced by equally enthusiastic new ones. A relatively small group of young adults can therefore tell us something disproportionately important about the future, because they are the people who will replace today’s older consumers. They may account for only a modest share of the wine market now, just as newly issued bonds make up only part of the Government’s total stock of debt, but over time the old stock rolls off and the replacement becomes the market.
That, perhaps, is the real problem facing wine. It is not simply that young people are drinking less today. It is that the generations consuming the most wine are steadily disappearing, while the generations coming behind them may never acquire the same habits. Wine, in other words, may have a replacement problem.
