Industry description
The North America Industry Classification System (NAICS) code 445310 is for the beer, wine and liquor stores industry. The entities in this industry engages in retailing already packaged alcoholic products such as ale, wine, beer and liquor (NAICS, 2021). For the purpose of being specific in one area I have chosen the retail wine for this discussion. The major retailers of wine in the U.S. market are Total Wine, Trader Joe’s, Publix, Aldi, Lidl U.S., Amazon/ Whole Foods Market, among other players.
Unemployment microeconomics variable to watch
The area of interest that entities in the wine industry need to check on is unemployment rate. This is because most of the wines are luxurious and therefore in case of a high rate of unemployment, the consumers may opt not to continue with the expensive wines and result to other cheaper alcohols. But, since the wine is addictive its consumption may not change abruptly in case of unemployment rate rising. It will take time before the effects of unemployment is felt.
Unemployment rate trend
Although, unemployment rate has been rising, especially due to covid-19 pandemic which left many establishments closed, the wine industry has proved itself as recession resistant (Zimmerman L, 2021). The industry recorded growth in sales amidst the pandemic. This was because the retailers and wineries adopted the online platforms to reach their consumers. The increase in sales meant the industry had to hire more employees and therefore as other industries were recording cases of cutoffs and layoff, wine industry was employing.
The future of the retail wine industry
The wine industry has good projection of growth in coming years, but, the industry must weather challenges like finding a group of consumers who will take the place of Baby Boomers who are retiring and they may not have the ability to sustain wines sales figures (Pellechia T, 2019). The millennials are not good consumers of wine and thus Generation X becomes the target. Also, another challenge is the rise of temperance movements who are against consumption of alcoholic drinks.
The North America Industry Classification System (NAICS) code 445310 is for the beer, wine and liquor stores industry. The entities in this industry engages in retailing already packaged alcoholic products such as ale, wine, beer and liquor (NAICS, 2021). For the purpose of being specific in one area I have chosen the retail wine for this discussion. The major retailers of wine in the U.S. market are Total Wine, Trader Joe’s, Publix, Aldi, Lidl U.S., Amazon/ Whole Foods Market, among other players.
Unemployment microeconomics variable to watch
The area of interest that entities in the wine industry need to check on is unemployment rate. This is because most of the wines are luxurious and therefore in case of a high rate of unemployment, the consumers may opt not to continue with the expensive wines and result to other cheaper alcohols. But, since the wine is addictive its consumption may not change abruptly in case of unemployment rate rising. It will take time before the effects of unemployment is felt.
Unemployment rate trend
Although, unemployment rate has been rising, especially due to covid-19 pandemic which left many establishments closed, the wine industry has proved itself as recession resistant (Zimmerman L, 2021). The industry recorded growth in sales amidst the pandemic. This was because the retailers and wineries adopted the online platforms to reach their consumers. The increase in sales meant the industry had to hire more employees and therefore as other industries were recording cases of cutoffs and layoff, wine industry was employing.
The future of the retail wine industry
The wine industry has good projection of growth in coming years, but, the industry must weather challenges like finding a group of consumers who will take the place of Baby Boomers who are retiring and they may not have the ability to sustain wines sales figures (Pellechia T, 2019). The millennials are not good consumers of wine and thus Generation X becomes the target. Also, another challenge is the rise of temperance movements who are against consumption of alcoholic drinks.
