Category: Wine Economics

IWSR Research: Who is winning in the moderation trend?

According to IWSR research conducted in late 2023 across the top 10 no/low markets – Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK and the US – 44% of no/low consumers said they had switched to a no-alcohol drink from another non-alcoholic drink, such as soft drinks, water, tea or coffee. This compares to 29% who replaced a full-strength alcohol product – although this was significantly up on the 2022 figure.

“No-alcohol drinkers generally come from other non-alcoholic beverages, but also now increasingly from full-strength categories,” says Susie Goldspink, Head of No- and Low-Alcohol Insights, IWSR. “There is also an increase in the proportion of no-alcohol consumers planning to increase their no-alcohol consumption.

“Increasingly, alcohol companies see no-alcohol especially as an opportunity for growth. Moderation is an established trend, and no-alcohol products which keep customers within a category – for example, switching beer for no-alcohol beer – or within a brand portfolio – say, switching Heineken for Heineken 0.0 – offer an option to alcohol businesses to hold on to revenue and continue to build brand equity.”

As a result, a number of brand owners across the beverage alcohol marketplace have invested heavily behind zero-alcohol versions of leading brands, or have either acquired or developed ‘pure-play’ no-alcohol brands, to target these opportunities. IWSR’s Innovation Tracker shows that the number of no-alcohol innovations coming to market globally has more than tripled since 2019, with numbers peaking in 2020 for launches of brand extensions as well as new-to-world products.
Consumer attitudes, however, are somewhat different within low-alcohol: here, 40% of those surveyed said they had replaced a full-strength alternative with a low-alcohol product, with 33% switching from another non-alcoholic drink.

“Full-strength alcohol categories continue to be replaced the most by low-alcohol beverages – particularly replacing beer/cider, for example in Spain and Brazil,” explains Goldspink.

“Meanwhile, spirits are being replaced more in markets such as the US and South Africa, where spirits are the most purchased full-strength category.”

IWSR consumer research also suggests that people who don’t currently participate in the no-/low-alcohol category could also be potential targets for brand owners in the future.

“More than half of non-consumers of no/low are either moderating their alcohol intake (26%) or don’t drink alcohol at all (28%) – offering a further untapped opportunity for producers of no- and low-alcohol brands,” explains Goldspink.

“There is also evidence from our recent consumer research that in many markets, no-alcohol products recruit consumers who aren’t drinking in a certain occasion or switching between both. These might be ‘Substituters’ (those who switch between alcohol and no-alcohol in different occasions) or ‘Blenders’ (mixing alcohol and no-alcohol in the same occasion).

“In both cases, these occasions offer an incremental opportunity for a brand owner to sell a product to a consumer who otherwise would not have been buying one of their products.”

Meanwhile, the emergent segment of functional beverages – ‘alcohol adjacents’ with active ingredients such as CBD, adaptogens or nootropics that claim to offer health benefits, stress reduction, mood alteration and pleasure – is beginning to attract younger consumers (Gen Z, Millennials) in particular.

According to IWSR data, the purchase of cognitive enhancers has increased over the past year, driven by growth in Australia and the US – where up to 29% of Millennials have made purchases in the category.

“CBD and other nootropic/adaptogenic products could provide a future challenge to alcohol consumption, particularly with younger legal drinking age consumers who are more likely to participate in this category,” says Goldspink.

“This generation participates in a broader repertoire of beverages in this space, as well as generally still consuming alcohol. As such, for brand owners looking to shape their future category, it’s really all about offering consumer choice to suit different occasions.”

The growth of the overall no/low-alcohol category gives brands the opportunity to cater to a much wider group of consumers. In many ways, no/low can be thought of as a solution to a gap in the market, rather than as a threat to the incumbents.

Source:IWSR

Chianti Classico Collection: Exploring the Charms of Italy’s Iconic Wine Region – Filippo Magnani

Recently, the wine world’s oldest consortium celebrated its 100th anniversary. In 1924 Chianti Classico established the first wine consortium with its headquarters in the historic Stazione Leopolda,Florence. On February 15th and 16th, a centennial celebration provided an opportunity to reflect on the collective narrative of Chianti Classico and pay tribute to the true soul of the consortium: its producers. Over 200 of them came to present a total of 773 different labels available for tasting. The annual event itself began as the Anteprima de Chianti Classico in 1993. Now it is known as the Chianti Classico Collection.

As in previous years there were in-depth sessions focusing on the Gran Selezione category, which was added 10 years ago to the existing Annata and Riserva. At the time this was a first for Italian wine and viticultural legislative history. This new group of stringent regulations account for only 6% of Chianti Classico production and result in exceptional wines that have given the international market a new quality benchmark. The initial 33 Gran Selezione labels have now grown to an impressive 213 today. They are a perfect example of the continued growth in sales and reputation of the ‘Black Rooster’ denomination. Over the last three years sales have exceeded production volumes by 4% and the average price has increased 13% since 2021.

The event also highlighted the strong presence of female figures employed by wineries in the region of Chianti Classico. This is a theme that is being increasingly talked about in the press and Chianti Classico is leading the way with more women taking on leadership roles. Currently the percentage of women employed by Black Rooster wineries is almost half (44%), many of them holding senior management roles, and when it comes to marketing and sales managers women represent the majority at 60%.

Of course, there continued to be much discussion around the fairly new additional Geographic Units approved by the consortium’s Member Assembly in June 2021. These UGA’s are now printed on all labels where relevant and distinguish 11 different subdivisions with unique natural attributes (soil composition, microclimate, position of the vines etc) and human factors (cultural background, local traditions and community ethos). These distinct units are San Casciano, Greve, Montefioralle, Lamole, Panzano, Radda, Gaiole, Castelnuovo Berardenga, Vagliagli, Castellina and San Donato in Poggio. The idea of showing the name of the municipality or village on the label is meant to spark both curiosity and recognition from the increasingly high numbers of consumers who would like to better understand the micro territories of Black Rooster wines.

The Chianti Classico Collection would not be complete without the Black Rooster’s other main product, Olive Oil DOP Chianti Classico. During the event participants had the opportunity to taste the most recent harvest of oils from 33 producers. The 2023 vintage is complex with aromas of fresh grass, artichokes and almonds followed by a distinct arugula and peppery quality on the palate with a long finish. As in previous years, the 2023 oils contain exceptionally high levels of polyphenols which are essential both to preserving the characteristics of the oil and providing high nutritional value.

A blend of history, wine and timeless beauty

Beyond the vineyards, the region of Chianti Classico is renowned for its picturesque landscapes and medieval hilltop towns like Greve, Radda, and Castellina. They offer a glimpse into Italy’s past with their ancient castles, churches, and narrow streets. The territory still preserves evidence of many past cultures. The earliest documentation of the existence of a wine-producing district dates back to the 13th century with the “Lega del Chianti”, formalized between Radda, Gaiole and Castellina and branded with the famous Black Rooster which, after many glorious years, became the Official symbol of Chianti Classico wine in 2005. The rooster symbolizes the spirit of the territory; strong and elegant, lively, and proud. Its crowing marking a new day.

The region itself is perched on a plateau at altitudes between 200 and 800 meters, mainly covered with forests of oak, chestnut, pine and cypress trees. Now held in the arms of its two historic capitals, Florence and Siena, Chianti Classico was a place loved first by the Etruscans, then by the Romans, and was a battlefield of bitter disputes in the Middle Ages.
It has been one of the most popular destinations for wine enthusiasts for centuries and even now producers are eager to welcome visitors offering world-class hospitality. With such a high density of wineries, the region is a true oenological paradise full of castles and ancient abbeys where fine wines are matured, world-famous wineries alongside small and no less prestigious family-run estates, traditional cellars and architectural masterpieces. Producers understand the importance of hospitality which brings great economic value, diversifies income, and creates an effective means of communicating values and enhancing the distribution of their wines. From curious wine enthusiasts to collectors, guests are drawn to the famous winemaking names of Chianti but can also discover exceptional hidden gems. Consequently, wineries work together with the tourism sector to create personalized and authentic wine and culinary experiences.

As always it was a true pleasure to once again meet so many passionate producers who exemplify the culture and philosophy of Chianti Classico.

How Climate Change is Changing Winegrowing Regions

In a recent study by Bordeaux Sciences Agro, Université de Bordeaux and Université de Bourgogne results were published in Nature Reviews Earth and Environment, showing 90% of coastal and low-altitude regions in southern Europe and California may no longer be able produce good wine in economically sustainable conditions by the end of the century if global warming exceeds +2°C. The study goes on to show that other regions could benefit: growing potential could increase in areas such as northern France and British Columbia (Canada), and rising temperatures could result in the development of new growing regions in countries as far as Denmark.

Grapes grown to make wine are sensitive to climate conditions such as temperature and extreme drought. These effects are already visible worldwide on yields, the composition of grapes and the quality of wines, with already and soon-to-be-observed consequences on the geography of wine production. Understanding shifts in wine production potential due to climate change is a major scientific concern. Based on their expertise and a thorough analysis of the scientific literature — over 250 publications in the last 20 years – a research team has established a global map of evolving trends in the threats and potential benefits that climate change brings to existing and new winegrowing regions. They did so by studying the effects of changes in temperature, rainfall, humidity, radiation and CO2 on wine production and exploring adaptation strategies.

Climate winners, climate losers
Winegrowing regions are primarily located at mid-latitudes where the climate is warm enough to allow grape ripening, but without excessive heat, and relatively dry to avoid strong fungal disease pressure. Rises in temperature – one of the most emblematic symptoms of climate change – accelerate vine development and the early ripening of grapes during the hottest periods in the summer. Harvesting in most vineyards now begins two to three weeks earlier than it did 40 years ago, with effects on grapes and the resulting styles of wines. Temperature increases, for example, can change how a wine tastes if grapes lose acidity, increase wine alcohol, and modify aromatic signatures. On a global scale, climate change could reduce growable surface area in current wine regions and increase it in others.

If global warming exceeds 2°C, some 90% of all traditional winegrowing areas in the coastal and plains regions of Spain, Italy, Greece and southern California may become unable to produce high-quality wine in economically sustainable conditions by the end of the century due to risks of excessive drought and more frequent heat waves. Conversely, higher temperatures could improve the suitability of other regions for the production of quality wines, including northern France, the states of Washington and Oregon in the United States, the province of British Columbia in Canada and Tasmania in Australia. They could even create new wine regions, in Belgium, Netherlands and Denmark.

Key Points:

• Climate change modifies wine production conditions and requires adaptation from growers.

• The suitability of current winegrowing areas is changing, and there will be winners and losers. New winegrowing regions will appear in previously unsuitable areas, including expanding into upslope regions and natural areas, raising issues for environmental preservation.

• Higher temperatures advance phenology (major stages in the growing cycle), shifting grape ripening to a warmer part of the summer. In most winegrowing regions around the globe, grape harvests have advanced by 2–3 weeks over the past 40 years. The resulting modifications in grape composition at harvest change wine quality and style.

• Changing plant material and cultivation techniques that retard maturity are effective adaptation strategies to higher temperatures until a certain level of warming.

• Increased drought reduces yield and can result in sustainability losses. The use of drought-resistant plant material and the adoption of different training systems are effective adaptation strategies to deal with declining water availability. Supplementary irrigation is also an option when sustainable freshwater resources are available.

• The emergence of new pests and diseases and the increasing occurrence of extreme weather events, such as heatwaves, heavy rainfall and possibly hail, also challenge wine production in some regions. In contrast, other areas might benefit from reduced pest and disease pressure.

Link to the full report:
https://www.nature.com/articles/s43017-024-00521-5

Scientists prove that drinking good wine will make you happier

Scientists prove that drinking good wine will make you happier, with the effect being further enhanced if you listened to jazz.

The National Researcg Council of Italy study reported March 5th, 2024 (in the Journal of the Science of Food and Agriculture) can good wine impact the “pleasantness” of an experience.

A trial was undertaken at the 2022 edition of the Internet Festival in Pisa, Italy, where a social experiment with a reliable methodology, through wearable sensors, measured the emotions aroused in a live context on consumers by different kinds of wines.

Five wines were trialed, two of which the scientists described as “faulty” and three which were high-quality samples, on 50 consumers in an “arousing context” with live jazz music in the background.

Both explicit results through questionnaires and implicit results through electrocardiogram (ECG) recorded by the wearable sensors were recorded.

According to the research findings, study author Dr Lucia Billeci, of the National Research Council of Italy said wine “undoubtedly generates a significant emotional response on consumers” and that an answer is “multifaceted and attributable to the quality level of the wine tasted”.
The findings also state: “In fact, all things being equal, while drinking wine even untrained consumers can perfectly recognise good wines compared to products of lower quality.” and “High-quality wines are able to induce a spectrum of positive emotions, as observed by the analysis of ECG signals, especially when they are coupled with background music.”

In conclusion, the scientists reported that the framework, “certainly played to the advantage of good-quality wines” and produced “positive emotional characteristics on the palate even of some less experienced consumers”.

In addition it said there was a “dragging effect” towards a positive mood, which was generated by the surrounding conditions, i.e. good music in a beautiful location.

Link to Research:
https://pubmed.ncbi.nlm.nih.gov/38441204/

European Drinks Industry Unveils System For Developing E-Labelling

The CEEV – Européen des Entreprises Vins, and spiritsEUROPE have teamed up with QR code compliance solutions firm Scantrust, to unveil an updated version of the U-label labelling platform.

According to the groups, the strategic partnership will facilitate the easy creation of e-labels for both the wine, aromatised wine and spirits drinks.

The U-label by Scantrust aims to simplify compliance with the new EU labeling regulations for wineries in a cost-effective manner. Additionally, it assists spirits producers in advancing the implementation of the Memorandum of Understanding on consumer information, which was adopted in June 2019.

Empower Wine Producers
“When we conceived U-label, our goal was to empower European wine producers large and small with an affordable turnkey solution for navigating the new labeling regulations,” commented Ignacio Sánchez Recarte, CEEV Secretary General.

“This partnership with Scantrust represents a significant milestone in achieving that goal.”

In a statement, CEEV and spiritsEUROPE expressed their commitment to continue supporting and contributing their expertise in the wine and spirits industries to the U-label initiative.

The new U-label by Scantrust platform meets EU Regulation 2021/2117 requirements, including recent clarifications by the European Commission.

Comprehensive Information
“As European spirits producers, we are progressing fast in providing comprehensive, easily accessible consumer information via e-labels in combination with energy-information on-pack,” said Ulrich Adam, Director General of spiritsEUROPE.

U-label will allow spirits producers large and small to roll out state-of-the-art digital labelling solutions together with an experienced and reliable partner.