What impact will Covid-19 have on the international wine industry? What opportunities & challenges does this present?
Challenges & Opportunities
Vinexpo goes Digital: Webinar
IWSR & Vinexpo Update
Outlook for the global wine industry until 2024
For more than 40 years now, Vinexpo has been one of the internationally renowned players in the wine industry. Meanwhile, Vinexpo hosts its B2B wine events in 5 cities around the world. In addition to Bordeaux, Hong Kong, New York, Shanghai and Paris are also included here. Year after year, all the big names in the wine industry meet here: whether winemakers who present their assortment or traders and distributors who are looking for new discoveries. The fact that Vinexpo does not stick rigidly to the tried and tested, but looks to the future with a solution-oriented approach, is also clearly demonstrated by the current Corona crisis. For example, digital paths are now also being increasingly pursued.
Everything at a glance
IWSR
Experts in the analysis of the global beverage market research
Mark Meek, the CEO of IWSR (drinks market analysis), together with Rodolphe Lameyse, CEO of Vinexpo, organized a webinar on the current challenges & opportunities for the wine industry. Meaningfully titled "The New Normal - Opportunities and Challenges for the Global Wine Industry up to 2024," the event explored how the global wine industry has changed in recent years and what the statistics predict for the next 4 years. After focusing on topics such as the challenges of climate change and Brexit in recent years, this year's event was therefore about the effects of the current Covid 19 crisis in digital form.
Just like Vinexpo, IWSR is an old hand in the wine business. For more than 50 years, they have been dedicated to international beverage market research, focusing on alcoholic beverages such as beer, wine and spirits. In quantitative studies, the IWSR analyzes consumption, trends and much more in terms of alcoholic beverages in over 160 countries. Especially in terms of trends, IWSR's reports are very exciting as it deals with short & long term trends as well as predictions.
The effects
The impact of COVID-19 on the volume of global alcohol consumption.
In general, the tendency to drink less, but higher quality wine is increasing. However, COVID-19 has left its mark on pretty much every social and economic sphere. How does this affect the wine industry? To this end, the IWSR has analyzed the effects in the global consumption behavior of alcoholic beverages and provided initial assessments. Even though the trend during the private sector lockdown was more toward greater purchasing power in terms of alcoholic beverages, the curve points sharply downward in 2020. This is mainly due to the fact that the catering industry had to close in many countries, bringing one of the main sales markets for alcoholic beverages to an almost complete standstill.
Thus, after a global increase in alcohol consumption of 0.1% in 2019, the COVID-19 crisis caused consumption to plummet by approximately 12% in 2020. According to a forecast by experts at the IWSR, however, the global market will recover in the long term, returning to its peak in 2019 around 2024. So we still have a longer phase of market recovery ahead of us.
International
Impact of the COVID-19 crisis on the global still wine market
After the still wine market slumped in 2018 and failed to recover from it in 2019, the COVID-19 crisis caused a further slump in global volumes in the still wine sector. According to the IWSR, a 13% decline is expected in 2020. While overall consumption is expected to increase steadily, the increase will not offset the heavy losses from the COVID-19 crisis. This is mainly attributed to the weak performance of leading markets such as the USA, Italy, Germany, France and China. It is interesting to note, however, that despite the steady decline in volume, the premium-plus price segment shows a positive value. The USA, Italy and the UK are particularly worthy of mention here.
Therefore, it is very important, especially in the catering industry, to strategically promote the awareness of one's own location continuously to interested parties and also to show one's own offer in times of need. The more sustainable your own reach is with the right target group, the more guests you can actually address. It is important that your offer fits the demand of the respective target group: A large reach does not automatically mean that this will lead to more guests. Unfortunately, touchpoints alone are not enough. You have to "maintain" these meeting zones and continue to talk about them.
Sparkling wine
The triumph of Prosecco and new perspectives
2018 saw a small slump in global consumption of sparkling wine. However, the turnaround began again in 2019 and growth of +1.39% was recorded. The success of Prosecco is particularly noteworthy here: This was able to grow enormously in all key markets, with the exception of Great Britain and Austria, and show an overall growth of +9.5% in 2019. Champagne and Cava failed to record growth rates and are facing long-term declines of -2% and -1.1%, respectively, in some of the major top markets.
ISWR expects the sparkling wine sector to be particularly hard hit by the COVID-19 crisis and the accompanying decline in trade. It is estimated that global consumption will decline by around -15% in 2020. Despite this sobering forecast, there is also light at the end of the tunnel. Thus, the market is expected to recover and return to its old strength in the next 5 years. What is interesting here, however, is that this is most likely not due to the strong numbers of Prosecco, as these are starting to flatten out, but to the increase in other sparkling wines. So we can look forward to what the future holds for us in the sparkling wine market.
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