More money, more wine: Alternative economic indicators

This week, The Wall Street Journal talked with Ray Isle, executive wine editor at Food and Wine magazine, about the economic state of the wine industry.

"People always drink," Isle says. "But they adjust what they're going to spend based on the economy."

As the economy continues to recover from the Great Recession, wine tastes evolve. People are spending more on wine — the $10-$20 a bottle segment of the market saw an increase of 8.2 percent in the last year (April 2011-April 2012, the latest figures available). The $20+ a bottle segment increased by 17 percent.

But who is buying $20 wine?

In general, wine purchasing skews toward the older, wealthier segment of the population. Indeed, Isle says, baby boomers are the biggest consumers of wine. They have disposable income and a taste for it.

But to account for the growth, we can look (at least in part) to the millennials. This generation is getting into wine, which improved sales.

Martin Truex Jr. raises a glass of wine after winning the NASCAR Sprint Cup series auto race June 23 in Sonoma, Calif. Millennials like Truex, born in 1980, have gotten into wine, accounting for part of the industry's growth. (Photo by Eric Risberg / The Associated Press)

The most popular category is still in the $6 a bottle zone. California's top five producers — Kendall Jackson, Cupcake, Menage a Trois, Bogle and Clos du Bois — make wines in this price range and are enormously popular.

Also enormously popular among the top five American distributors? Buying in bulk from around the world, especially South America. It's common for these large companies to ship in foreign wine, like a Malbec from Argentina, and bottle it.

Watch The Wall Street Journal video here.