The U.S. wine industry's losses are mounting.

U.S. wine sales fell about 6% last year from 2023 levels, according to industry data group SipSource. The drop is the latest in a long decline in demand for wine from restaurants, bars and stores, which some have called an "existential threat" to the industry.

Wine isn't the only alcoholic beverage that falls through hard times. Sales of beer, cider and spirits also fell, NIQ data showed. But wine has fallen even further, and the industry as a whole is waking up to the shift.

"Wine has been soaring, soaring, soaring over the years, but then it's been down in recent years," said Larry Duke, who has owned and operated Schumer's Wine & Spirits in Manhattan since 1978. Schumer's Wine and Liquor.

The wine industry got a boost in 2020 as coronavirus lockdowns and stay-at-home orders spurred demand. But that peak proved short-lived.

Wine industry scholar Mike Veseth, author of several books and the Wine Economist newsletter, points to generational trends that could explain the decline in wine consumption.

“Baby boomers love wine,” Vises said. "We thought the next few generations would continue to do this, but they didn't."

A 2023 Gallup poll supports this theory, showing that young Americans drink less alcohol than previous generations.

The drop in demand comes as a second Gallup poll in August showed more than four in 10 Americans now believe alcohol is unhealthy. The U.S. Surgeon General issued a report on January 3 warning that alcoholic beverages should carry cancer warning labels.

Experts say that when young consumers are truly addicted, they will opt for pre-mixed, ready-to-drink products. In fact, premixed beverages are one of the few areas in the alcohol industry that is seeing growth.

Wine comes in large bottles that may require a corkscrew or extra glasses, putting wine at a disadvantage compared to the convenience of a pre-mixed drink.

"It's not that they don't like wine," said Christian Miller, research director at the Wine Market Council, a nonprofit group focused on research. "They drink a much wider variety of other things."

Gary Decker, owner of Vinomania in Syracuse, New York, said legal marijuana has also reduced demand for wine.

"Marijuana takes a big part of it because it's just another piece of the party puzzle," Decker said. "That's another thing people can do."

Also on the list of obstacles: non-alcoholic beer and spirits. Industry data shows a significant rise in sales in the sector recently.

Non-alcoholic beverages are not only beneficial to those concerned about the health risks of alcohol, but also to the businesses that offer them.

"Retailers love them," said Bump Williams, who runs an alcoholic beverage industry consulting firm and has worked in the industry for at least three decades. "If a retailer sees one of their customers drinking too much, they can give them a glass of water, but they won't make any money from it. Instead, they can give them a non-alcoholic mixed cocktail."

Alcohol-free wine has yet to catch up.

“De-alcoholized beers are booming and the best deal-alcoholized beers are of very good quality,” Vises said. "The drink is late."

"How do you replicate that flavor?" asks Dale Stratton, an industry veteran and managing director of a consulting firm focused on the wine business. “I just haven’t seen a solution in the wine category that does this effectively.”

Wine is one of the most expensive alcoholic options, and prices are rising all the time. Since the beginning of this century, the average cost per liter of wine has increased from $10 to $14.

“People are on very tight budgets right now,” Vises said. "So wine is feeling the crunch."

These factors portend difficult times for the wine industry, although experts are divided on the extent of the problem.

“This is different than usual,” Vises said. "It's an existential question. While the industry will continue to exist, significant adjustments are needed to make that happen."

“Wine has always been here,” Stratton said. "The wine category is here to stay. Even though we are facing some challenges now, the wine category has always been here and will continue to be here."

While the industry may be slow to respond to these challenges, winemakers aren't ready to give in just yet.

“Is it really time to retire this 8,000-year-old beverage of humanity?” California winemaker Martha Stoumen, owner of Martha Stoumen Wines ) said. "Really? Are we going to make it extinct? It seems like we might want to treat it as a culture."