The wineries industry in the US is set to rise, following the growing base of younger generation of wine consumers, according to market research report by IBISWorld, an industry research firm.

During 2009 economic recession, the sales declined especially in retail, bars and restaurants, revenue fell by 2.1% and demand shifted towards lower-price wines. All this prompted producers to sell online and in tasting rooms.

However, after bouncing back in 2011, revenue is expected to rise at a rate of 4.4% in 2012 to $16.6bn.

Alcohol demand and consumption are expected to decrease in 2012 mainly due to rising wine prices and improving economy.

Shifting towards lower-price wines has greatly benefited larger wineries as they produce in bulk quantities, whereas smaller wineries struggled to cope with consolidation among suppliers, wholesalers and retailers.

IBISWorld industry analyst Sophia Snyder said consolidation throughout the supply chain is expected to continue through 2017 as producers try to work with larger wholesalers and strive to meet increasing demand from consumers, particularly for low- to medium-price wines.

In 2008, winery acquisitions were not entertained by publicly traded beverage and consumer companies, as companies had to engage in a thorough analysis of the profitability of each of their consumer divisions.

However, as economy recovered during the five years to 2012, many larger companies acquired independent small wineries and vineyards.

It is expected that in 2012 and in the following five years the acquisition activity will further rise due to increase in economy.

On the other hand, the operating profit is set to decrease in 2012 as producers struggle to accommodate the rising cost of grapes, when compared to 2011 when operating profit increased as consumers started to trade up.