Ep. 1896 U.S: Wine Market Shake Up | wine2wine Business Forum 2023

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It's a hot topic, and we are covering this out topic with a an institution in terms of, understanding the market trends, analyzing the alcoholic business with, Danny Brecker. Danny would not need any presentations, but for those of you who don't know him, he's a he's a guy who spent, twenty years, with Nielsen, covering the, alcoholic beverage business. And in our words, as as a consultant, in, in this field. So you know, is, is a very knowledgeable person and very authoritative in in our in our field. Today, Danny will present the state of the wine industry in the US, threats, opportunities, new trends in the face of, as you know, a very, challenging year, and also a very challenging future I would I would add for for our business. So The wine industry has a whole experienced, difficulties, this year. Many of you know about the stocking and abrupt the stocking that has taken place this year. Wine consumption on the decline. This is a factor and, quiet and apparent, demographic, shift in the way wine is, is is consumed. So Danny is, the why market in the US address? Gonna start off with that one. That's that's all yours. A difficult question, but, I'm very happy to be be here and try to answer some of those questions. Just by way of background, I'm I'm actually Canadian. I moved to the United States when I married my wife from Southern California, about thirty years ago, so I've been in the US market for the last thirty years trying to understand trends shifts in the market across alcoholic beverages, not just not just wine. And so I wanna talk about some of the challenges, as well as, the opportunities. I'm also in part representing wine market council, wine market council is a nonprofit trade association whose mission is to provide, its members with market research about consumer buying habits and attitudes and and motivations. I was actually last here, as a not I I've traveled here a few times, but, business wise. I was at wine to wine in two thousand fifteen. So quite a long time ago, and, obviously, lots has happened, even just over the last four years. Let me go back with, just one slide. Lots has happened over the market, over the last four years. We've obviously had a pandemic. We're in the midst of all sorts of geopolitical unrest around the world, all sorts of political instability in in the United States and and lots of economic strains. And the economic strains are are impacting the market, even though in the United States, the unemployment levels are relatively low. Inflation is still relatively high. There's record high consumer debt levels. So people are have to pay that off at some point. Interest rates are very high, so that puts strains on consumers as well as on businesses so there's lots to contend with. And even though, we might say in this room that wine is a is an absolute necessity, for average consumers, it's still a luxury. They have to pay for their food. They have to pay for their gas. They have to pay for housing and so on. So, in the US, and there's just a couple numbers up here. It's still the world's largest market. It's around four hundred million cases, three hundred and eighty six million, the last, in twenty twenty two. It's has the largest population of regular wine drinkers. There are eighty million wine drinkers in in in the United States, but it's also within a very competitive market. So the numbers there, and this is some estimates. There's roughly four hundred thousand wines in the marketplace at any one time in the United States. So that's who we are all competing with. Four hundred thousand wines. There's over a hundred thousand wines, seeking approval from the government for labels every, every year. So it's a extremely competitive market. It's around in terms of value, probably close to I've seen different estimates, seventy, seventy five billion, you know, so it's it's it's an extremely large market. And then if we take that down a little bit further, that three hundred and eighty six million cases, it's about, a hundred million cases of of imports, eighty four million table wine, about twenty three million of sparkling wine. So it's about a hundred and over a hundred thousand cases of imported wine. And within the eighty million, of course, not everybody consumes wine all the time. So within the eighty million, there's about forty four million, what we call core wine consumers. Those are people that drink wine one a week or more often, and another thirty six million of occasional wine drinkers, people that drink wine, but less often than once a week. So still a very, big market, but a very complex market. So what I wanna talk a little bit about is, I I call it fishing where the fish are, but, you know, what's happening now as well as where the fish swimming to. So what do I see if I look out into the future in terms of opportunities for the wine category opportunities for Italy within the wine category, as well as what younger drinkers are drinking, as because, obviously, younger drinkers are the future of the wine category. And I'm gonna do it from a numbers perspective. So you'll see a lot of numbers here. Hopefully, they'll make the presentation available to you. If you're interested in the actual numbers or if you want, I can send it to you. But I'm gonna be using numbers from a number of different data sources because it's difficult to find one data source that kind of represents everything that's going on in the wine category because it's so complex. So I'm gonna be looking in some cases at shipments. There's another data source that's depletions, which is what goes from the wholesaler to the retailer on and off premise. I use some Nielsen data because I can look at certain brands, and and look at certain channels, specifically the off premise. And then Windmarket Council has some great consumer research, and they're doing a whole bunch of new research just this year. So we just started to release some of that. There'll be more to come, focusing on what wine consumers are are doing. And then a little bit from, friends at Psalmai who, have tremendous data on the wine on premise and on premise lists. So first of all, just, you know, we talked about just the unprecedented four years, and and there's been all kinds of shifts that have gone on. It's made like difficult supply chain disruptions And we've got where wholesalers stocking, destocking, and and and all the economic strains that I mentioned before. But probably more importantly or as importantly, I like to think about what's the consumer doing and I see that in their behavior, not just for wine, but across all beverages, especially younger drinkers. Very interested. Flavor means everything to them. Go to Starbucks. All sorts of different flavors of coffee. But you talk about alcoholic beverages, and there's an increasing interest in in flavors, and it comes in different forms and different varieties across beer wines and spirits, extremely interested in wellness, health and wellness, and how know, how wine or other things they eat and drink fit in with in a healthier lifestyle, very interested in understanding exactly what they're eating and drinking. So, I think Europe's ahead of the United States in terms of wine labeling requirements, but I think that's gonna be really important to help consumers understand what they're eating and drinking because they're looking for that information. Convenience seeking, which is both how they shop and the kinds of products they buy and they drink, very, experience, experiential interest. And I'd loved, connecting sort of wine at what I heard last night, at the speaker dinner. Sorry. About connecting wine and glass, to the land and offering an experience of understanding the land where wines from. A lot of interest in just understanding a company's purpose and, and and values and how you communicate that to consumers. And then finally, just at least with the United States, the younger consumer in particular is very ethically diverse. A large proportion of Hispanics, a large proportion of African Americans, an increasing number of Asians, And so it's really important to understand their their culture, understanding their roots, understanding kind of, what interests they have that's, through through their generations and their historical roots. So, let's start with the consumer. I just broke it down a little bit more here. The forty four million and the thirty six million. That's the eighty million consumers that I was talking about. Forty four million core wine consumers. They drink wine a lot. Probably account for eighty to ninety percent of the volume, and then thirty six million sort of marginal that drink wine once in a while, but not as often as as once a week or more often. But I think it's interesting there are, that red area. Those are people that drink beer or spirits or other kinds of alcohol, but they don't drink wine. So to me, they represent an opportunity for how can we bring them into the wine category probably into the marginal group first and then later on into the core The other interesting group that continues to grow a little bit is the abstainer. That's almost seventy million dollars, twenty sorry, seventy million consumers, twenty eight percent. That's the black area. Those are people that don't drink at all. They don't drink beer or wine or spirits. But it's interesting because that's generally at the older end, but there's an increasing increasing the number of younger consumers who are choosing not to drink wine. Or beer or spirits. They're just abstaining. But perhaps things like nonalcoholic products can can appeal to them. If we break down the eighty million into into different groups, So then I organized it by age group, and the Hispanic consumer, which is about seventeen percent of American twenty one plus are Hispanic and another twelve percent are are blacks. And, I'm showing here just the percentages that eighteen percent and fifteen percent for overall twenty one plus how that breaks down by different age groups across the top. So for the core group, there are much lower percentages at the younger end well as within Hispanics and and African Americans. Even when we get into the sort of forty age group or fifties, they're still relatively low, and that gives me some worry in terms of will they become Even, will they become the, what we look at for seventy plus, which is twenty three percent of core consumers? By your, by the time you're forty or fifty, a lot of your preferences are already set. You're loyal to certain things. So it may even be hard to change them over time. The non adapter, that's the twenty nine percent there, but you can see that's very high amongst younger consumers. So these are people that are young, but they're not choosing wine so far. How can we attract them into the wine category? And then like I mentioned, the abstainers, it's high at the senior end. You see thirty seven plus for, thirty seven percent at seventy plus, but it's also pretty high and it's growing higher at the twenty one to twenty nine age group. Again, people just not wanting to, to, to buy, or to drink alcohol. In terms of just overall beverage alcohol trends, there's some things that are still the case. I've heard it for years and years. People are not drinking more overall, but drinking better, which means they're buying more expensive things they're trading up or premiumization. But they're not drinking more overall, which means that we're still battling for share. How can we, you know, share of wine within the beverage alcohol overall beer wine and spirits. There are fewer and fewer people that are drinking only wine or only beer or only spirits. They're consuming different things on different occasions. So it's extremely competitive within beverage alcohol. And I would say within sort of the longer term trends or spirits, and I'll show you a couple numbers. But spirits are winning. Wine had been doing quite well until the last sort of three, four years where it started to slow down in, in the most recent years, Victoria mentioned, we've actually seen some declines, and then beer has been declining long term. That's within beverage alcohol. If we go beyond it, there's nonalcoholic beverages, especially younger consumers, and then there's the cannabis market, in the United States where it's legal now, to buy cannabis in twenty five states. That's over half of the population. So it's not federally legal yet, but it's legal in twenty five states. And the wine market council just did some research, and their research says that over forty percent of wine drinkers are purchased in cannabis in different forms could be to smoke, could be to drink. It could be to edibles with with cannabis, marijuana. But of those forty two percent, almost sixty percent sometimes choose cannabis instead of wine for different occasions. So there's it's it's tough to get a lot of research on the impact, but I think it's not favorable to have an alternative to to to wine. So the the trends that I mentioned, these are shipment numbers. So I index two thousand sixteen as as a hundred, and then just looked at the trends since then. So the green line is spirits. The red line is wine. The yellow line is is beer, and then the gray line is the total of all those together. So you can see the spirits line continues to grow. Wine had been had been doing well and it had been doing well for years and years, but over the last three, four years, it started to slow down. And in the most current year, it's it's down from where it was last year, but still up versus where it was in prior years. And then if you look at the right hand side, some of the numbers, the top set are depletions, So sales from the distributor to the retailer, the bottom numbers are retail sales for so from the retailer to the consumer. And you can see the wine volume numbers, they've they've been in decline. It's sort of mid single digits. So total category is still having is still obviously having some difficulties. And there, there are headwinds for us. So what stands in our way? What are some of the challenges? Well, first of all, I probably don't have to tell you this, but The United States, the word United States is a misnomer for the wine category. It's it's anything about the United States. The market's very complex. There are state by state by state regulations, and and so it's just complex. It's not not united in the way it operates. I mentioned the economy is still difficult. There's certainly a growing amount of interest in social moderation, led by younger generations, but, that that's that's something we have to recognize. And there's just a lot more choice. So I call it diversity of choice, but the choice, there's more choice for mainstream products, whether it be beer or wine or spirits, There's this ready to drink cocktails, and I'll show you what that kinda looks like. There's non alcoholic beverages, there's cannabis, and then we've got a lot of pressure in terms of headwinds from that younger generation. So what I used to think of choice being somewhat simple, you know, something like this, like a glass of wine, a beer, a cocktail. Now it looks like we still got the choices on the left hand side, but we've got all these other choices that are available for consumers. Could be cannabis that I mentioned. It could be nonalcoholic beverages. There's, a growing, still small, but growing amount of nonalcoholic adult beverages. And then there's this ready to drink sector that is just, kinda crazy in my opinion. And I'll show you just some examples. But, the wine market council again did some research recently on consumers, and they asked consumers who are drinking less wine what else they're drinking? If they're drinking less wine, are they drinking other things? And so they asked them about their preferences. And these are some of the things that they said that, if they don't choose wine, what else are they preferring? So you see things like spirits, so vodka, whiskey, tequila, things like that. But you also see other things like those cocktails, heart seltzers. There is wine based drinks. So things like sangria or Spritzer's wine based, thirty two percent. But it goes on and on and on in terms of all these other choices that consumers have. And so when I go into a store these days, I see something like this. I I see a lot of bottles of of wine, But I see sections of the store that look like this, and these are all these ready to drink products. Some of them are malt based or beers. Some of them are wine based, and a growing amount are are spirits based. But in total, if you add up all those things together, all that stuff on the shelf, it's eleven billion dollars, and it was five billion dollars six years ago. And people aren't spending a lot more in total. So if they're spending five or six billion more on this. They're spending five or six billion less on something else. That right hand side, those are all the some of the examples of spirit based ready to drink cocktails that are in particular, younger consumers are are choosing. Brands like High noon, is an example from Gallo. Is is the brand leader in that ready to drink sector. It's about two billion dollars now, but it's growing at forty percent a year. Over the last few years. So this is what the growth trend looks like. The blue columns are volume and the red red line is dollars. But it'll be about let's it's probably about forty million nine liter cases today. And you can just see the the the growth rate, and what that curve looks like. It's the second biggest spirits category after vodka. So it's vodka now ready to drink cocktails, and then you get American whiskey and tequila after that on volume. And it's the fastest growing segment by far. So it offers, you know, it's convenience. It's usually in a can. All the mixing is done. So it's very convenient. You don't have to do any of the mixing. It's the right size, obviously. It's generally lower ABVs. Often sort of five percent, four percent, six percent, something like that. A lot of flavors, a lot of fun, a lot of variety. So that's one competitive, sector that we have. Terms of the US wine category. So just a a couple just observations. First of all, whites are performing better than reds, generally. Table wines, fifteen dollars and above are performing better than under fifteen. But seventy percent of the table wine category volume is under eleven. So as that sector is really big, but declining, and that's why it makes it even more difficult for the wine category to grow when seventy percent of the category is declining, almost ten percent There's several better for use segments that I'll show you. There's some alternative packaging that's relatively small, but it's doing better than glass. Not doing great, but better than glass. And wine cocktails, especially in smaller sizes, again, relatively small, but it's, but it's growing Well, not as much as the spirit side, but it's it's doing okay. And then Italy, we remain the leading import country by far. Our shares relatively flat over the last few years, so it hasn't gone up that much for tape for table or still wine. But it's certainly growing within sparkling wine, and that's been prosecco led. When we asked wine consumers a wine market council, why are you consuming less wine these days? These are some of the things that they told us. And I highlighted some things are, I would call them lifestyle oriented. There's things around diet. There's things around just drinking less alcohol in general. I don't enjoy wine as as much as I did before. So those are all the yellow things, and a lot of them are getting lifestyle oriented. There's some economic things which are in blue. A couple things. I'm just I I'm spending less money. I have to pay gas. I have to pay food. I'm just cutting back. And then there are some that are some are the competition, the ones that are in green. I'm that's the I'm starting to prefer other drinks. So all of those things sort of come into play. We also asked wine drinkers about their occasion choices when they chose wine versus when they didn't choose wine. And generally, and the yellow numbers are I always or I almost always choose wine. The green numbers, I choose something else, or I rarely choose wine. It it sort of struck me that the more formal occasion, or holidays are more sort of fine dining wine tends to be the preferred choice. But for more casual occasions, when you're out sort of at a casual restaurant with friends, that's not the case. So in those cases, they're choosing something else. So maybe sometimes, you know, wine needs to be a little less serious, a little bit more fun, a little bit more casual to be shared informally, because that's where we tend to lose out to to other to to other beverages. I I mentioned the wine alternative packaging. This is what it looks like. The green bars, the the bars represent the share, so seven hundred and fifty mil in a bottle. Is fifty six percent of the category. The yellow dots represent the trend. Is it up or is it down? And we can see the red line going across the page, that's zero. So if I'm above the zero, the dotted line, I'm growing if I'm under it, I'm declining. So I would say generally that wine is sort of the traditional seven fifty mil or one five, so even larger are not doing very well. It's it's declining. You get into smaller packaging and they actually aren't doing great in that the yellow dots aren't really high, but at least it's better than, better than being down low. And then you get into alternative packaging of boxes, tetra packs, PET cans, again, relatively small except for three liter boxes are are pretty big, but they generally are doing better than a large size sort of glass formats. So for Italy, how are we performing and where the opportunities? First of all, and this represents sort of the commercial side of the mainstream volume side of the business. The top of the top a hundred brands, twelve of them are Italian brands in the in the US market. A brand like Stella Rosa, and La Marca, they are two of the top ten brands in the whole US wine market. If you go through all of the yellow boxes, there's ten of them or, sorry, twelve that are in the top one hundred. Italy has roughly eleven percent of the US wine market. We've got twelve out of the hundred brands sort of makes sense, of the top one hundred. And then if you go down further of the top, a hundred and fifty brands, you get in all the brands at the bottom. Oops. Sorry. I'm not showing the slide. I guess I should. So this is the top one hundred. So I, obviously, highlighted the brands that are, from Italy in those top one hundred Stylorosa, and, and, like I said, LaMara, two of the top ten. But you can see we have other ones including the Company you're with, Tory, in Santa Margarita, between thirty and forty. So, again, well represented. But let's go a little deeper. So let's go into sparkling wine first. The one thing about sparkling wine that I think is really interesting is unlike Table wine. Sparkling wine is, is preferred by younger consumers. And that's one of the reasons why sparkling wine and Perseco in particular is doing better than than table wine. If we if wine purchases by age lined up with their the share of the population by age, all of those columns would be at a hundred. So you'd see everything at the hundred line. But you can see that's not the case for table wine. For younger consumers, it's well under. For older consumers, well over. But if we look at sparkling wine or prosecco, The lines are pretty close to a hundred. So younger consumers are buying wine in proportion to their share of the population or buying sparkling wine. So that's one thing, sort of, in, in favor of, of, of, of, sparkling wine and prosecco, in particular. If we look at Italy's share of, sparkling wine by price here, so this is the different countries, United States, Italy, Spain, and France. The green is Italy. So we are we have a very high share of sparkling wine between eight and thirteen and between thirteen to eighteen. We've got, almost fifty percent of eight to thirteen, almost two thirds of thirteen to eighteen. And then it really drops as we go higher I guess my question would be in terms of opportunities, could we push up into the eighteen to thirty five range? Because we're only really up against the US sparkling wine in eighteen to thirty five and the US sparkling wine isn't doing all that well. So maybe we could push up and and and do better. If we look at, how, Italy's share of sparkling wine ranges across the thirteen states that do the most amount of sparkling wine business. So California does the most in Florida, then New York, etcetera, and you can see Italy share right across. It's about thirty eight percent for the country, but it it ranges so there's certainly opportunities, I would say, in California, it's tough because it's the home market for a lot of American wineries. But in Florida, that's where our share gap is the largest. And Florida is the second biggest state in terms of in in terms of sparkling wine. So maybe there's an opportunity there. And I think you've got a panel coming up about Florida. So maybe we can all learn about, Florida a little bit more. And then Presecco, Presecco, with the approval to produce and export, prosecco, doc, Rosay, in twenty twenty, the prossecco growth rates, and here's we're looking at growth rates here. You can see they're obviously exceptionally high, but they continue to be high. But that's on top of just the regular white prosecco doing well as well. So the prosecco Rosets have really been in my opinion largely incremental to prosecco, and so there's still opportunities. And when I say there's still opportunities, I was looking at How big is, Rosay? It's percentage of the prosseco market or sorry. It's a percentage of, sparkling wine overall. So Rosay is about sixteen percent of the, sparkling wine market, but in France, it's over twenty percent of the market. In the US, it's almost twenty percent, but for prosecco, it's still only ten. So we're young, but we still got opportunities to grow prosecco Rosay as a percentage and to continue to, to the growth rates in the market. And then the last thing I'll say about sparkling wine, it it's it's an attractive market, but just also be aware of the, of the structure of the market. The leading brand, which is La Marca. One single brand is over fifty percent of perseco in the United States. Then the next five brands. Now we're up to three quarters of the market. Then the next or the top ten, we're at eighty percent. So for everybody else that's not a top ten, we're sort of fighting over the other twenty percent that's left over in a growing market. Okay. Let's just talk about, still wine for a couple minutes. Still wine, table wine. I guess the first thing that I would say, and again, I'm I'm kind of a numbers person is just be aware of the size of the opportunity. So there are ways to figure out how big any segment is. Tell me a price here, tell me a country or whatever, and it's we can use some numbers to calculate how much opportunity is there really. So this is the number of nine liter cases available for import wines overall, not just Italy, but import wines overall in different price tiers. So if I'm looking in the fifteen to twenty five dollar category, there's ten million cases of import wine sold in the United States. We get into twenty five plus, and that drops to one million cases. So just be, be cognizant of the size of the opportunity as you're looking at your projections for how much wine you could sell in the United States. Secondly, if we look at sort of where Italy, how how we do by price tier, and this is our share of import wine by different price tiers, We do really well between eight to eleven, between eleven to fifteen. You can see we've got forty five percent of the market. It really drops fifteen to twenty five, which is still a relatively large portion of the US market. So it feels like, again, that fifteen to twenty five category where there's a lot of competition, but that's a market where, we would like to improve our share to be higher than the twenty nine point three percent that it is now. Ours, I I took a look at Pino Gresha just because the largest, single white varietal in the US market. This is Italy's share of Pino Gresha overall, where our main competitors, the US. And our share really ranges here in a couple price tiers. You've got over seventy percent of the market, but in something like eleven to fifteen, which is the one where maybe we could aspire to move up to, we only have thirty nine percent of the market. So, again, could be an opportunity there. And then I also looked at our share across different states, and this is for still wine, not sparkling wine. New York is the biggest market, and then California is the next biggest for, import imported table wine. So New York, California, Florida, etcetera. Our share is relatively stable, but again, sort of, Florida sticks out to me as a really large market where our share is relatively low compared to other ones. And the other one, and I don't know how much you know about different states, but Colorado is another one of the top thirteen states for imported wine, where our share is relatively low. And we can go deeper into it. There's certain regions, different countries that do better in some of those states that we do. I also I'm gonna skip one slide. I know Jeremy's here from from Psalm AI who provided, his company provide a little bit of data where we can look at Italy's share of wine placements in the on premise. And we get things that we would expect. Like in New York, we have twenty percent of the wine placements in in the on premise. Similarly with some other states in the northeast, whereas in places like California or Florida, it's down like thirteen. But what I thought was interesting, like, even in Florida, in West Palm Beach, which is about a hundred hundred kilometers north of Miami pretty upscale. We've got twenty four percent of placements. And then you go into some other, cities, very large population cities. And by the way, that's Naples, Florida, not Naples's Italy. Where our shares, you know, can go down to nine percent, ten percent. So there's opportunities to focus in on some other areas within the state, to improve our, our, our position there. Okay. I'm just gonna spend five minutes, talking about, sort of younger drinkers and and social moderation. And these are just some numbers, about sort of some of their attitudes and things that they say in different kinds of surveys that are done all the time. But if you kind of look at these numbers, forty four percent are interested in trying what they call damp drinking, which is less drinking, basically. And that's led by younger generations. Over fifty percent say that drinking, even in moderation, is bad for your health. And that number, was thirty four percent back five years ago. So you can see how much it's changed, just over a relatively short amount of time. According to a Nielsen study, forty five percent of adults twenty one to twenty eight. So the gen z generation, they claim to not buying any alcohol. So their younger consumers in particular are more and more embrace embracing a lifestyle of social moderation either they're drinking less, or in some cases they're not drinking at all or in some cases they're substituting it with something else. And there's other research that sorta says that or their con consumers are saying that how they feel about certain things. And I I think it's their perceptions, that maybe can be corrected, and it's our responsibility to try to correct some of these over fifth or fifty percent say they feel negatively about sulfites in wine. Forty seven percent associate with wine being high in sugar. And then about a third associate wine with being high in calories. So that's the negative side. Then on the positive side, for people that are drinking more wine, when we ask them or or listen to them about what they what they say about wine, you know, a good percentage say that it's part of a healthy lifestyle. It's a more moderate drink than other alcoholic beverages. It has positive health benefits. So there's both, consumers that feel negatively about things, and if we can change their perception about those things, because there's also a a good portion that still feel positively about about wine. And over time, we're seeing more and more products being introduced in the marketplace that specifically are going after those characteristics that consumers, younger consumers in particular are looking for. And these are sales numbers for the last five years. These are Nielsen measurements, but you just look at the trends of some of those. And then I indicated what the share is for those different things, but the trend continues to move upward. So it's still it's a relatively small segment, but there are segments that are providing growth for producers when they're introducing products and introducing labels that talk about low sugar or no sugar organic low calorie and some of the things that in particular younger consumers are looking for. And then the last thing on on that is that, there's more and more products that are nonalcoholic adult beverages. The they're growing by double digits. They're still very small. So even for beer, which is more penetrated, nonalcoholic beer is only one percent of the beer category for wine. It's like zero point three percent, but they're growing. They need to taste good and or acceptable to the consumers. So you can't just introduce something consumers don't like. But there's a market for it if it's if it's if it's produced that way. And there's, there's just more out there about better for you. And I don't know if this is the right term legally responsibly to use. But this is a I just saw this the other day. It's a distributor in the, northeast that has now a catalog of better for you alcoholic products, wine, the spirits. So in that catalog, or low cal, low sugar, low ABD nonalcoholic products. So there's definitely more attention being placed on it, and it's an area for some growth, although relatively small at this point. And and health overall it's not just diet. It's it's not just exercise. If, again, wine market council research, they ask consumers about what is, you know, what does healthy mean to you? And I thought it was interesting spending time with family and friends or maintaining, the proper work, life balance was as high as anything else. So you can talk about health from a lot of different aspects. It's not all about just, what you eat or or what you'd what you drink. And in the last research that the wine market council did that's just coming out now, for those consumers that are drinking more wine, several of their top reasons. So when we asked them, what are the top reasons why you're drinking more wine? They included several references to wine and health, but to sort of broader definitions of health, like relaxing was actually the number one response. Why I'm drinking more wine, it makes me feel relaxed. So again, health you know, can be can mean a lot of different things to a lot of different people. So I'm just getting it off, with the wanted to put a couple takeaways, be realistic because there are ways to quantify the opportunity. So you might have some aspirations to sell x amount of cases, but there's ways to sort of figure out is that realistic or not. And also think about how your product is different from the four hundred, four hundred thousand other products that are available to the American consumer. B, you know, it's okay to innovate to try new things. There was also I wanted to show this slide that says wine drinkers, they love to try new products. They they want try new products. They wanna try new products from new regions, other countries. They don't necessarily stick to what they've always had in the past, so they're open to to new things. I think the thing that was most disappointing to me was they're open to all that, but they don't think the wine category is innovative is as maybe we'd like them to think, because only twenty five percent think of wine as being introducing you or innovative things. So innovation can be better for you. It could be alternative packaging. It could be those wine Rtd type drinks spritzes or Saint Grias that are organic or any other sorts of things where you can introduce something to new and different to the marketplace. Obviously, it's complex. So it's important to understand it. When I looked at the states, it's it's also it's obviously important to understand the big markets like New York and say markets in the northeast, but also think about those less developed Italian wine markets. I didn't know until I looked at it. The Colorado is a pretty big wine market. Not very well developed for Italy. And then, I said market the treasure of wine and what makes it unique, because when I think about wine and all the things that we intersect with and all the things that make us different and unique, and there are some of these and and maybe a lot more. But I think we're kind of at the point where as an industry, we collectively, need to I I love your term. What was the cooperation? Something like that? Copetition. Oh, but competition. Oh, you know. Pro petition. So we're grading and competing at the same time. So we need to do that. We compete with one another, but as an industry, we have so many good things to say collectively. We could do a hopefully, a a good job of collectively talking about what we bring to the consumer, including, obviously, the United States so that we can continue to grow kind of our business in the American market. On behalf of the audience, you know, the people gathering here. Thanks. Very much for this enlightening presentation. There is a lot to digest, Danny, to be honest with you, because a lot of information, but, you know, I was struck by one slide the one showing that spirits are still growing and wine, whereas wine is on the decline. So, I see some kind of a contradiction, you know, in the stats. So spirits going up, wine going down. So it's not, apparently, it's not a, alcohol issue. As, in some of the slides, would appear to be. So how would you read this, as a as an analyst, but also, you know, as a guy who, you know, who frequent the market and may also be a market years, somehow, It's a good question because I I I would say the same thing. I mean, spirits, high alcohol, more than wine. But if you go a little bit deeper, think about a couple things. One is the RTD segment, is part of what's driving that, and that's not high high alcohol. That tends to be low alcohol, actually. Like I said, four percent, five percent, six percent spirits. And and then if you go deeper tequila, which really big in the American market, A lot of Hispanics, a lot of celebrities, a lot of money. Margarita is the number one cocktail in a restaurant. So there's you have to go deeper, and then the third thing might be even price. So if I think about price, you know, wine is not inexpensive. An average, if I talk about, like, a mainstream wine price per serving, say something like the market, it'd be sort of two dollars and fifty cents for a glass. If I'm choosing an average, like Tito's vodka is the number one brand in the American marketplace. That'd be a dollar a glass per serving if I'm mixing it. So we're twice as expensive. So there's a price element that comes in. There's a lot of money and a lot of big players in the spirits markets. Diageo, it's a lot of marketing money, a lot of innovation. Every drink can be a new drink. That's why, you know, cocktails, if I want one drink today and another drink tomorrow, it that's the bartender makes something different. It's frustrating to me when I go into a restaurant sometimes in the States now. You know, it'll cost me fifteen dollars for glass, often of wine, or fifteen dollars for a mixed cocktail. Where someone's gonna do something that I wouldn't do at home. There's lots of competing influences. And you're right. It's not all health, but on the RPD stuff, part of itself. Thank you for your contribution to this debate. And, you know, we look forward to seeing you next year. Maybe, you know You see the numbers go Yeah. Maybe with better numbers, and, and, better prospects as well. Thank you very much, Danny. Thank you. Thank you. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud, Apple Podcasts, Spotify, ImaliFM, and more. Don't forget to subscribe and rate the show. 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