Tag: Covid-

Wine Brand Equity stabilizing after COVID, but yet to fully rebound

Building on feedback from over 25,000 wine consumers in 25 markets; representing over 400 million global wine drinkers, the fifth annual Wine Intelligence Global Wine Brand Power Index reveals a stabilization of wine brand equity, following the steep erosion of brand equity seen in 2021 amidst Covid disruptions. The 2022 data also suggests that global wine brand equity has yet to recover to pre-pandemic levels.

The Wine Intelligence Global Wine Brand Power Index 2022 incorporates consumer feedback on key brand health measures and an index is calculated at a global level as well as at a country level across 25 key wine markets. This year’s index saw Denmark featuring as a substitute for the Russian market, which was not surveyed.

At an aggregate level, the top 15 global brands collectively scored higher (6.5 points more) in 2022 compared with 2021. However, on a two-year view, scores remain substantially lower than in 2020, noting that the 2020 result was based on consumer surveys that took place in 2019 (before the Covid pandemic). Across the two-year period (2020-22) awareness levels tended to be more resilient; the main driver of change in the index during this period appears to come from the recalled purchase and connection scores, which both fell significantly for the top 15 global brands in 2021.

Yellow Tail and Casillero del Diablo claim the #1 and #2 spots (again) respectively in the 2022 Global Wine Brand Power Index, with their brand power index scores remaining well clear of all other wine brands. Both brands place as the #1 brand in three out of the 25 markets, with Yellow Tail also claiming a top ten ranking in 10 markets and Casillero del Diablo in 14 markets. Yellow Tail’s strength in the US market is cementing its #1 global ranking in the index. Barefoot now ranks as the 3rd most powerful wine brand globally, rising every year from its 13th position in 2019.

Other notable climbers within top 25 of the 2022 Wine Intelligence Global Wine Brand Power Index include Santa Carolina, which continues its rise to now rank #7; Apothic rising five places to #14 and Dark Horse – which has jumped eight places to #25.

Commenting on the rankings, Lulie Halstead, CEO of Wine Intelligensaid: “In a year characterized by relatively less upheaval for consumers, it’s a relief to see equity for wine brands has stabilized in terms of consumer connection as wine drinkers have returned to more frequent touchpoints with wine in both retail and the on-premise.”

She added: “Successful wine brand owners will be those with a focus on restoring the fundamental positive connections that have propelled their brands to such widespread success on the world stage in the first place, while doing their best to maintain availability and the value proposition amid input cost increases and supply chain disruptions.”

Source:  Wine Intelligence

#winenews #winelovers #wineeconomics #winetrade #winebusiness #winemarketing #winewednesday #WW #wine #winetrends #wineresearch #WineIntelligence #vino #vin

Global alcohol consumption will bounce back to pre-Covid levels by 2023

Global alcohol consumption will return to pre-Covid levels by 2023, according to recent IWSR data, with the market already showing signs of recovery.

Projected to grow by 2.9% in volume by the end of 2021, the research forecasts that total alcohol consumption will reach pre-Covid levels within two years and will continue to increase steadily until 2025.

Total alcohol volume decreased by 6.2% globally during 2020, affected by lockdowns and other restrictions.   Total wine and beer volumes are both forecast to be down about -9% in 2020 and are unlikely to regain volumes for several years.   However, within the wine sector, sparkling wine volume consumption is anticipated to recover to 2019 levels by 2023, along with the rest of the alcohol market. Premium-and-above Prosecco is expected to be least impacted by Covid, and premium-and-above still wine forecast to recover lost volumes by 2022.

This growth will be boosted by several factors including the growth of ecommerce which is up 45% from 2019; to reach US $29 bn in 2020, and RTD’s, the industry quickly adapting in key markets and the increasing sophistication of the at home occasion in many markets.

“In many global markets Covid-19 accelerated the impact and growth of key industry drivers, such as the development of ecommerce, premiumization, the rise of the home premise, moderation and the need for convenience in product formats,” said the IWSR’s CEO Mark Meek.

“These are the trends that will also underpin the industry’s resilience as it pivots to meet consumers where they are in the years to come. Additionally, across many markets, some segments of the population now have significantly more disposable income than they did in 2019, some of which will be spent on beverage alcohol products.”

Another trend set to give alcohol a leg up is product premiumization, according to the IWSR, with premium-and-above wine and spirits forecast to increase by 25.6% in total volume between 2020-2025 compared to 0.8% volume growth over the same period for brands in lower price tiers.

Twelve Wine Consumer Trends in the Covid-19 Era

The Wine Intelligence report entitled “Wine Consumer Trends in the Covid-19 Era” was published last week and highlights a mini-boom for wine since the pandemic struck, yet it also warns of dark economic clouds on the horizon.

While key consumption markets have been turning more often to wine in the past six months, spurred by new ‘lockdown’ occasions and more drinking outside of mealtimes, there are concerns about the sustainability of this growth, given the deteriorating economic environment and possible pressure on household finances in the coming months, according to Wine Intelligence.

As part of the report, which collected data from wine drinkers in Australia, Canada, China, Germany, Sweden, the UK and the US, the research agency has identified 12 key consumer trends in the Covid-19 era, which we have reproduced below.

  1. Growth in wine consumption frequency with the shift to at-home occasions more than compensating for the loss of on-premise occasions.
  2. Heartland wine drinkers driving growth with growth in wine coming from women, Gen X and those already connected with wine.
  3. Non-food occasions driving wine growth bringing opportunity for wine to migrate to occasions where other beverages have been more dominant in the past.
  4. Slow recovery in average bottle spend on wine in the off-premise but remains below pre-pandemic levels in most markets.
  5. E-commerce for wine comes of age and it is rapidly becoming a new and habitual way of shopping for wine.
  6. Shift to wines seen as a safe choice and ‘localism’ with mainstream and local wine brands winning.
  7. Consumers increasingly cautious in their lifestyles with confident ‘Hedonist’ segment shrinking as 2020 progresses, and an increasing proportion of ‘Halters and Reducers’.
  8. Large scale events off the agenda with consumers seeking to avoid crowds, even when restrictions are lifted and the current dangers of the pandemic have passed.
  9. Travel plans remain on hold with overseas and international travel not on the agenda for wine drinkers, even when travel restrictions are lifted.
  10. Consumers becoming more distant from the on-premise, shifting socializing patterns.
  11. Treat-seeking behavior losing momentum as consumer spending becoming more conservative.
  12. US wine market returns to growth as wine consumption frequency grew strongly in the US, driven by Millennials.

Source: Wine Intelligence Wine Consumer Trends in the Covid-19 Era, published October 2020

 

Pau Roca, Director General of OIV gives his overview of the 2019 global wine sector and the impact of Covid-19

Speaking from the OIV’s [International Organisation of Vine and Wine] headquarters in Paris, by web conference to over 3,000 international wine journalists, and trade, Director-General Pau Roca presented today [April 23, 2020] details of the 2019 wine production, consumption, and international trade. The impact of Covid-19 in the sector was also highlighted.

Here are the important facts and highlights of today’s Conference:

  • The surface area of the world vineyard is estimated at 7.4 mha, which has been stable since 2016;
  • World wine production is estimated at 260 mhl, a marked decrease, compared to 2018 historically high;
  • World wine consumption is estimated at 244 mhl, marking a +0.1% with respect to the previous year;
  • The world wine export market has expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%);
  • 2020 Harvest – first estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 (with the exception of South Africa and Uruguay).

Vineyard area stabilization

In 2019 the world area under vines, corresponding to the total surface area planted with vines for all purposes, including young vines not yet in production, is estimated 7.4 mha.

Starting with the Northern Hemisphere, overall stability can be observed in the European Union (EU) vineyards, which stands for the fifth consecutive year at 3.2 mha.

Within the EU, the latest available data for 2019 indicates an increase in the area under vines in France (794 kha), Italy (708 kha), Portugal (195 kha), and Bulgaria (67 kha). The vineyard surface area in Spain (966 kha), Hungary (69 kha) and Austria (48 kha), on the other hand, slightly decreased from 2018.

In East Asia, after over 10 years of significant expansion, the growth of Chinese vineyard (855 kha), second in the world by surface area just behind Spain, seems to be slowing down.

In the United States, the vineyard has been consistently decreasing since 2014, and its estimated surface area in 2019 is 408 kha.

In South America, developments in vineyard surface area between 2018 and 2019 showed a downward trend for the fourth year in a row.

The only exception in the continent is represented by Peru that increased by 7.1 kha (+17% / 2018) its vineyard surface area reaching 48 kha.

South Africa’s vineyard surface area remained stable with respect to 2018, at 128 kha.

Australia the area under vines remained stable at 146 kha in 2019; while New Zealand the surface area grew by 1.6 % reaching a record-high of 39 kha.

Production back to the average

World wine production, excluding juices and musts, in 2019 is estimated at 260 (259,0) mhl, marking a sharp decrease of 35 mhl (-11.5%) with respect to the exceptionally high volume recorded in 2018. Overall, after two consecutive years that can be defined as extremely volatile, 2019 brings global wine production back to average levels.

Italy  (47.5  mhl), France (42.1 mhl), and Spain (33.5  mhl), which together account for 48% of world wine production in 2019, saw a sharp decrease in their wine production with respect to 2018.

Other EU countries that registered a decrease in production with respect to 2018 are Germany (9.0 mhl, -12%), Romania (5.0 mhl, -4%), Austria (2.5 mhl, -10%), Hungary (2.4 mhl, -34%) and Greece (1.9 mhl, -8%). The only EU country that, in 2019, saw an increase in its wine production is Portugal with 6.7 mhl (+10% / 2018).

In Eastern Europe, weather conditions were favourable in Russia (4.6 mhl, +7% / 2018) and Ukraine (2.1 mhl, +6% / 2018), while in Moldova the harvest was less abundant in 2019 and the vinified production was equal to 1.5 mhl (-23% / 2018).

In Asia, the new data available for China indicate an estimated vinified production of 8.3 mhl in 2019, marking a decrease of -10% with respect to the already relatively low production level of 2018.

In North America, wine production in the USA is estimated at 24.3 mhl, a decrease of 2% compared to 2018. This slight decline in 2019 does not depend on bad weather conditions or the raging fires that occurred in California (harvest was just before), but it is a response to overcome an oversupply of grapes and wine.

In South America, the overall trend for wine production in 2019 is negative with respect to 2018. However, while in Argentina (13.0 mhl) and in Chile (12.0 mhl) 2019 vinified productions are lower with respect to 2018 but overall in line or even higher than their five-year averages, Brazil (2.0 mhl) registered a sharp decrease in its wine production in 2019 of more than 1 mhl (-34% / 2018).

In South Africa, 2019 production reached 9.7 mhl. This represents an increase of +3% with respect to the low volume registered in 2018, but it is still far from the average production levels recorded before the beginning of the drought that heavily impacted the country for three years in a row (2016, 2017 and 2018).

With regard to Oceania, Australian wine production registers a decline for the second consecutive year reaching 12.0 mhl in 2019 (-6% / 2018). In New Zealand wine production was 3.0 mhl in 2019, a slight decrease of -1% with respect to 2018.

Expansion of the international trade of wine

In 2019 the world wine export market – considered here as the sum of the exports of all countries – has expanded with respect to 2018 both in volume, estimated at 105.8 mhl (+1.7%), and in value, with 31.8 bn EUR2 (+0.9%).

Strong increases can be observed in exports from Italy (+2.0 mhl), Spain (+1.3 mhl), Canada (+0.4 mhl) and Chile (+0.3 mhl). However, significant reductions in exports are recorded for Australia (-1.1 mhl), South Africa (-1.0 mhl), Ukraine (-0.4 mhl) and Hungary (-0.3 mhl).

In 2019 the global value of wine exports is on the sustained growth path started in 2010 reaching a new record high. France was still the most important world exporter in terms of value, with 9.8 bn EUR exported in 2019. There were rises in the value of exports in many large exporting countries like France (+425 m EUR), Italy (+211 m EUR), and New Zealand (+84 m EUR). The largest declines include Spain (-234 m EUR) and South Africa (-73 m EUR).

In 2019 the international trade of wine in terms of volume was mainly dominated by three European countries – Italy, Spain, and France – that together exported 57.1 mhl, accounting for 54% of the world market.

In 2019 the top three importers in terms of volumes were Germany, the UK, and the USA, which together imported 40.4 mhl, reaching 38% of world total. These three countries represent 39% of the total value of world wine imports, reaching 11.9 bn EUR.

The first importer in 2019 is still Germany with 14.6 mhl, even if its wine import volume decreases by 0.6% compared to 2018.

China for the second consecutive year saw a significant decline in its imported volumes (-11% / 2018), reaching 6.1 mhl in 2019. In terms of value, the trend is similar, with an overall downfall of -9.7% compared to 2018, reaching 2.1 bn EUR. The only category that increased both its volume (+8%) and its value (+8%) is sparkling wine, although it represents only 2% of the total imported volume.

Early estimates of the 2020 harvest in the Southern Hemisphere

First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 for the majority of countries, with the exception of South Africa and Uruguay.

In 2020 a decline in production volumes in all South American countries, with the exception of Uruguay, are expected. In Argentina estimated production is 11.6 mhl (-11%), in Chile 10.5 mhl (-12%) and in Brazil 2.0 mhl (-1%), while in Uruguay 0.65 mhl (+11%).

South Africa seems to continue its recovery path from the drought and expects +5% with respect to last year, reaching 10.2 mhl.

In Oceania, Australia expects a lower production level in 2020 estimated at 11.5 mhl (-4%) due to drought and bushfires while in New Zealand (2.9 mhl, -2%) expectations on wine production are by and large in line with 2019, or just below.

These are preliminary estimates and should be interpreted with caution,  given the current exceptional circumstances.

Impact of Covid-19 in the wine sector

At this early stage the information and statistical data available are insufficient to provide an accurate forecast and anticipate the scenario of the vitivinicultural sector in the future. However, due to communication with OIV members (“Member States”), the OIV has certain qualitative information at its disposal.

The feedback given by the Member States reflects a radical change or transfer between distribution channels. The expected overall balance is a decrease in consumption, a reduction in average prices, and therefore an overall decrease in total sales value, turnover, margins and finally profits of the wineries.

As far as exports are concerned, economies in recession are not a promising market to develop, and during this pandemic, the largest consuming countries have been the most affected. Trade flows may recover along with the economy, but some permanent changes could occur.

Alcohol consumption is also being debated. Messages on the positive effects of wine consumption are totally unacceptable and irresponsible.

The same applies to the issuing, under these circumstances, of general statements or biased messages that are the result of ideological concerns about wine consumption, such as abstention.

The OIV’s work follows the Strategic Plan approved by the General Assembly in October 2019 and covers a 5-year period until 2024. In the current context, the objectives and goals of the OIV go hand in hand with the needs that this crisis has highlighted.

The OIV is the intergovernmental organization of scientific and technical nature of recognized competence for its work concerning vines, wine, wine-based beverages, and other vine-based products. It is composed of 47 Member States. In the framework of its competence, the objectives of the OIV are as follows:

  • to inform its members of measures whereby the concerns of producers, consumers and other players in the vine and wine products sector may be taken into consideration;
  • to assist other international organizations, both intergovernmental and non-governmental, especially those that carry out standardization activities; and
  • to contribute to international harmonization of existing practices and standards and, as necessary, to the preparation of new international standards in order to improve the conditions for producing and marketing vine and wine products, and to help ensure that the interests of consumers are taken into account.