The “Top 10″ Wine Consuming Countries

The International Organise of Vine and Wine (OIV) published the “State of the World Wine and Vine Sector 2021” report April 2022 which estimates wine consumption per country, which also includes which countries consume the most wine per annum.

Despite the Western European reputation for a glass of wine with lunch and a glass of wine with dinner, it appears that the US (with its population of approximately 258 million adults) consumes the most wine per annum.

The estimated 2021 total consumption of 236 million hectolitres marks a 0.7% increase on the 2020 level, disrupting a trend of otherwise continuous decline from 2018 to 2020. This spike can be partially attributed to the reopening of the on-trade.

Note: this data is not per capita but estimates overall consumption for each country.

Here is a list of the top 10 counties that consume the most wine each year.

1) USA – 33.1 mhl

33.1 mhl equates to about 4.4 billion standard 75 cl bottles. Also note that USA still has dry municipalities and where alcohol cannot legally be purchased by anyone under the age of 21. The OIV data indicates that wine consumption has risen by around 5% since 2016, with older, affluent consumers driving the market.

2) France – 25.2 mhl

Consumption has slightly decreased in France in recent years, falling from an estimated 28.3 mhl in 2016, though this figure is actually 2% above the pre-pandemic volume. There are still those who enjoy their two glasses a day, including President Emmanuel Macron, but attitudes have shifted to favour less frequent consumption. Health consciousness may be part of it, though attempts to place the Nutri-Score system on bottles and label wines as “unhealthy” were met with outrage from the industry and consumers.

3) Italy – 24.2 mhl

Just falling short of France, Italian wine consumption does not meet the level of its wine production, with the country making almost twice as much wine as it drinks. This amount is actually Italy’s highest level since 2008, though sales of all alcohol in Italy declined by -8.5% during the pandemic. The notable rise also comes in spite of a report suggesting that while more Italians are drinking wine, consumption is less frequent.

4) Germany – 19.8 mhl

Sparkling wine is especially popular among German consumers. Prosecco and Cava juggernaut Henkell Freixenet’s recent results show that Germany, Austria and Switzerland remains the company’s strongest region. Champagne is also fizzing ahead – with the 15 million bottles sold in Germany in 2021 representing a phenomenal 28% increase on the 2019 level, a symptom of post-pandemic celebrations.

5) UK – 13.4 mhl

A survey of Brits’ favorite wine brands shows that there is a strong preference for sweet, less expensive wines or expensive Champagne. As for British bottles, the Queen’s Platinum Jubilee served as an occasion for many to crack open fizz from England’s burgeoning sparkling sector – as consumption has tripled since the Diamond Jubilee. Last year’s result was approximately 3.4% above the five-year average and shows that, despite Brexit, the UK remains a strong market.

6) China – 10.5 mhl

Wine consumption did drop by -17.4% between 2019 and 2020, largely as a result of the country’s rigid lockdowns, and by a further -15.4% in 2021. China was also a major market for Australian wine, but the tariff dispute which began in March 2021 shows no sign of cooling down.

7) Russia – 10.5 mhl

Russia has a reasonably-sized wine industry, producing an average of 4.5-5 mhl of wine per annum, and there is a strong domestic market for it. Indeed, as the country has become increasingly isolationist, Putin’s antagonism toward the European wine industry has grown, such as was the case with his declaration that only Russian sparkling could be labeled as ‘Champagne’. Despite this, there is still demand for foreign wine, and it will be interesting to see how this consumption figure changes, in light of the trade sanctions imposed as a response to the Russian invasion of Ukraine.

8) Spain – 10.5 mhl

Spain is a major global producer, on a similar level to France. However, despite wine being a fixture of meals in the country, alcohol consumption plummeted by -16% in 2020 as the majority of drinking takes place in restaurants and bars, which were shut during lockdowns, the reopening of those venues resulted in a 9.9% boost on the 2020 volume, a result that reflects pre-pandemic figures.

9) Argentina – 8.4 mhl

Though producers such as Bemberg have propelled the country’s fine wines into international markets, and Mendozan Malbec is now a staple of supermarket shelves across the world, for a long time most Argentinian wine never left Argentina. But domestic consumption dipped by -11.1% between 2020 and 2021, and the overall trend since the start of this century has been downwards. This is likely due to economic troubles and currency devaluation diminishing consumer purchasing power.

10) Australia – 5.9 mhl

Wine Australia launches AUS$2.2 million biodiversity program

There are currently 20 million drinkers over the legal age. Australia’s wealth of wines has found a domestic audience among millennial drinkers. In fact, between 2018 and 2021, the percentage of regular wine drinkers over the age of 55 fell by -7%, whereas for 25 – 44-year-olds it went up by a third, the reverse of the demographic shift that has been seen in the US. Overall, Australian wine consumption last year was 7.9% above the five-year average, reaching the highest consumption level recorded.

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US E-Commerce Alcohol Sales Surpass $6bn in 2021

According to new data released by Rabobank their 2022 Alcohol E-commerce Playbook Report looked at the US alcohol e-commerce market and how it has grown since the start of the pandemic. The report forecasts that the online channel is set to be the biggest driver of industry growth for years to come.

The report predicts online alcohol sales in the US will grow an additional 3.4% in 2022 and has noted that the average size of e-commerce teams at US alcohol companies has jumped by 117% since 2019.

“E-commerce will be the number-one driver of industry growth over the next decade and a critical component of brand building, awareness, and trial, both online and in-store,” said Bourcard Nesin, a Rabo Research F&A beverages analyst, and author of the report.

“Companies that fail to proactively invest in their e-commerce teams will struggle to remain relevant and retain market share.”

Analysis of Major Channels
Online sales now represent about 4% of all off-trade alcohol sales in the US, an increase of nearly 1.9% in 2019.

The online grocery and marketplace channels grew 271% in two years and are now nearly four times larger than they were pre-pandemic.

Online alcohol sales in the grocery channel increased 238% in 2020 and 9% last year. Rabobank states the increase is due to a large number of retail locations offering alcohol online.

The report further said online alcohol marketplaces increased by 274% in 2020, with the channel predicted to grow by 15% in 2022.

Rabobank said companies such as Drizly and Instacart obtained millions of customers and added thousands of stores to their retail networks. Together, the two companies have an 86% market share of sales in the channel.

The channel’s success resulted in major merger and acquisition activity, including Uber’s US$1.1 billion purchase of Drizly last year, Rabobank noted. In November 2021, e-commerce platform Reserve Bar agreed to acquire Minibar Delivery.

Meanwhile, specialty alcohol retailers, which include large chain stores, state-owned retailers, and independent shops with an online offering, increased by 151% in 2020. Rabobank said growth was driven by operators offering local delivery and curbside pick-up for the first time.

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#instawine #drizly #uber #alcohol #winedelivery #winetrends

Wine Industry Predictions for 2022 – Wine Intelligence

Wine Intelligence, a global leader in wine consumer research and insights has come up with five predictions for 2022.

Firstly, beverage alcohol has proven to be one of the most resilient product categories in the world in the Covid era, in part due to the industry’s ability to innovate and pivot from a largely restricted or closed channel (the on-premise) to more accessible channels such as e-commerce and convenience retail, where regulation allowed.

The challenges that face the wine industry in 2022 will be similar to those facing beverage alcohol as a whole and consumer goods generally: keep costs down while persuading consumers to trade up; improving the substance as well as the image of the category in light of increasing demands from governments for a step-change commitment to environmental and social responsibility; and making the product relevant to the next generation of legal drinking age consumers.

Here are Wine Intelligence’s five predictions for 2022:

1. Global wine will get serious about ‘light-weighting’ – reducing glass packaging weight

Despite many worthy efforts over the past 3 decades, the wine industry has yet to find a way of peeling consumers away from their love of a 75cl glass bottle. Part of the problem is that glass bottles work so well from a consumer point of view: they seem more environmentally friendly than plastic, they convey reassurance by reflecting the values, tradition, and quality of wine, and they look good on a table. Last month, we reported consumer research that showed 55% considered glass to be a ‘sustainable’ form of wine packaging, compared with 35% who thought that a bag-in-box was sustainable.

Why does this matter? A standard glass wine bottle, with a typical dry weight of 500g, accounts for 29% of a wine’s carbon footprint, according to a 2011 study by PE International for the Wine Institute of California. However, there are many bottles for still wine out there which tip the scales at substantially more – with a dry weight of nearly a kilo in some cases, which pushes packaging’s share of wine’s carbon output to close to 50%, and the total carbon output up by around 10%, according to the same PE study. A lightweight bottle reduces packaging’s share substantially – by roughly 1g of carbon per gram of glass, depending on the proportion of recycled glass used, and that’s before any transportation saving. Remove the aluminium foil capsule, throw in a natural cork (and count the full benefit of carbon sequestration in a cork forest, as calculated by a study from EY, commissioned by cork manufacturer Amorim in 2019), and you have a product who’s packaging is almost carbon neutral.
Why will this change in 2022? Influential figures in the wine industry, such as Jancis Robinson MW and Tim Atkin MW, have long campaigned against heavy wine bottles. Now this powerful group of influencers is rallying a growing coalition to their cause. Crucially, this now includes major retailers, who will use their buying power (and the need to meet their own carbon reduction targets) to strong-arm suppliers into committing to lightweight glass where possible (sparkling wine will still need heavier glass to cope with gas pressure). More pragmatically, strains on the global supply chain, in terms of raw material cost increases, rising fuel and transportation costs, and retailer reluctance to pass costs on to consumers, will force producers to seek out savings wherever they are available. Unnecessary packaging will seem an obvious place to start.

2. Luxury wine will need to burnish sustainability credentials

What does luxury mean today? Chewing over this topic at a gathering organised by upscale Provence wine producer Chene Bleu in London’s Linley Gallery a few weeks ago, Lucia van der Post, the leading style guru and Financial Times columnist, was unequivocal: “luxury will have to show that it is sustainable to appeal to younger consumers”. Her thesis, and that of Xavier Rolet, co-owner of Chene Bleu and former CEO of the London Stock Exchange, was that luxury brands will need to work out how to align their values, and actions, with those of the next generation of consumers. In practice this means committing as much to acting sustainably – both in human and environmental terms. The challenge for luxury brands in general, and luxury wine in particular, is to do this while not compromising the quality of the product itself.

How will this play out in 2022? Around the world, wine drinkers are trading down in volume, and trading up in quality (see also Prediction 3, below), and luxury wine is currently one of the main beneficiaries of this trend. However, when the tide of disposable income starts to ebb, as it surely will when inflation starts eating away at household incomes and travel reopens fully in the next year, consumers are likely to become more discriminatory in how they spend their money. The usual quality-and-heritage pitch will no longer be sufficient.

3. The premiumization train will keep on rolling in 2022

One of the most notable silver linings of the pandemic for the wine industry has been consumers’ willingness to transfer the budgets they would have spent in going out and travel into higher quality food and beverages for the home. After an initial blip during the first period of lockdown, the premium and super-premium price categories of wine, which in the US context means wines selling for USD 10-20 and over USD 20 per bottle respectively, have bounced back by +2-4% in volume terms in the first 6 months of 2021, according to IWSR data. At the very top end, the Liv-Ex Fine Wine 100 Index, which measures the prices of the most sought-after fine wines in the secondary market, hit an all-time high in October, capping an impressive 17 month run of increases.
The trend to spend a bit more has of course been with us since well before Covid and is closely linked with the trend to drink less volume of wine.

Wine Intelligence data shows that 39% of consumers in key consumption markets around the world are actively moderating their wine consumption, rising to over 50% in markets such as Netherlands and Switzerland. Wine producers have also been innovating and promoting their premium offerings assiduously, as the profit margins on these products are orders of magnitude higher compared with low-priced wines, thanks largely to the impact of fixed value taxes that are levied on alcohol by volume.

Three factors will fuel the wine premiumization train in 2022: the reluctance of some consumers – particularly the Boomer cohort –to re-engage with the on-premise and travel, which will reserve more of their budgets for at-home entertaining; the increasing influence of Millennials within most wine markets, who have been the biggest drivers of the drink-less-but-better movement; and a nasty inflationary crunch in the supply chain, combining the disastrous northern hemisphere wine harvest of 2021, which the OIV estimates reduced wine volumes by an estimated 18%, and rising energy, dry goods and transport costs.

4. Wine in cans will become low-alcohol wine RTDs in cans (and small bottles)

Canned wine made huge strides in 2021, both from a technical and a sales point of view, and this will continue in 2022. However, the big innovation will come from industry building new product sub-categories in wine that hit both of the growing trends of the 2020s: wine in a portable, single serve format, with a low-alcohol formulation that turns it from wine to a wine-based sparkling drink. The continued growth of RTDs, especially in the US, is being led by an unprecedented bout of innovation in the category, and remains on course to grow substantially in 2022, according to forecasts from the IWSR. More astute RTD manufacturers are looking for ways in which they can premiumize their offering (tapping into the same trends as discussed in Prediction #3, above), which at the moment is largely focused around spirits-based beverages, using premium branded whiskies, rums and gins to drive consumer demand up the price ladder. There is also an increasing focus on flavour, according to the IWSR’s in-house market experts, which will see a shakeout of poorly formulated, low-value RTDs. Eventually, we think, the same logic of successful RTD innovation – marquee brands, better flavours – will be applied to premium wine products. We expect the first movers here will be the sparkling wine producers, especially Champagne houses with an eye on extending their reach into the low alcohol / single serve space.

5. Wine industry needs to do battle for global talent
Most of the wine industry would agree that it is a fun place to work. Unlike most other industries, wine can offer a unrivalled mix of intellectual challenges. What other industry requires its leaders to be part-farmer, part-chemist, part-production expert, part-salesperson, and part-marketing guru? In recent years it has attracted talented, well-educated, and passionate people from the Millennial generation, drawn by its vast complexity, heritage, and multifaceted work challenges, as well as the romantic notions of working in harmony with nature that wine still manages to conjure.

That’s the good news. The more troubling news is that there are now many other exciting things for the next generation of global talent to work on. The war for their services is taking on a new dimension, driven primarily by the rise of global technology giants backed by vast quantities of investment cash. True, working for TikTok may not offer time in a field, bottling line or upscale retailer, but the financial rewards can be astounding. For the moment, the battle for talent is being fought in other sectors – global accountancy and financial services firms are finding their conveyor belt of talent picked apart by the top technology firms, who can offer starting salaries of well over USD 100,000 per year, according to research published by Payscale.

In on-premise, a field much closer to the wine industry, a corresponding re-valuation of talent is already happening. A survey of its own job postings released in June 2021 by Reed, the largest recruitment agency in the UK, found that hospitality and catering staff jobs were being advertised with salaries 18% higher on average in May 2021 compared with the previous year. The most eye-opening number in this survey was the 43% increase in salaries offered for restaurant kitchen staff.

While wages are obviously important to workers, they are not the only thing that matters. Surveys of younger workers from the Millennial and Gen-Z age cohorts focus on consistent requirements from employment: being part of an ethically sound business, transparency and fairness in the workplace, purpose, autonomy, and opportunities to develop. As with many other industries, wine is going to need to up its game in 2022, not just in terms of money, but also in its ability to offer more holistic rewards to its workforce.

So, what are your thoughts on this? Do you have anything else to add?

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#wine2022 #winetrends

Portuguese Wine Exports Increase H1

Exports of Portuguese wines increased by 14.5 % in volume and 19.3 % in value, during the first six months of 2021, reaching almost €436 million.

“Portuguese wine exports had very positive behavior in the first half of 2021, registering a remarkable increase, both in value and in quantity, when compared to the same period of 2020: 14.5 % in volume, 19.3 % in value and 4.2 % in average price”, stated the Ministry of Agriculture.

Between January and June, Portuguese wine exports stood at €435.6 million, €70.5 million more than last year.

With regards to the community market, exports advanced 14.6 % in volume and 19 % in value in the first half of the year, while the average price grew by 3.8 %.

In turn, exports to third countries increased 14.4 % in volume and 19.6 % in value until June, compared to the same period in 2020.

France, United States, United Kingdom, Brazil and Germany were the most important markets during this period.

According to data from the National Institute of Statistics (INE), quoted by the Ministry of Agriculture, the agri-food complex grew 8.4 % in the first semester, compared to the same period of 2020.

“This is another sign of the sector’s resilience and capacity to adapt to the situation of a serious health crisis that we are still going through. The Ministry of Agriculture has always been on the side of producers and companies, with the necessary measures to guarantee predictability and stability in this period of greater uncertainty”, said the Minister of Agriculture, Maria do Céu Antunes.

#wine #winenews #wineeconomics #winelovers #portugal #Portuguesewine #instawine #winesofportugal #wineexports #vinho #vinhoverde #whitewine #redwine

Institute of Masters of Wine Webinar: Climate Change & Global Wine Trade – February 17th, 2021

The Institute of Masters of Wine is continuing its webinar series next Wednesday February 17, 2021 with a session on “The Impact of Climate Change on the Global Wine Trade.”

This webinar will examine the impact of climate change from vine to glass with leading experts climatologist Dr Greg Jones, economist Mike Veseth and CEO of Wine Intelligence Lulie Halstead sharing their views in a discussion covering the impact on growing grapes and wine quality, trade and distribution and on wine consumers. 

Climate change is having an impact on wine production. Increasing temperatures affect vine phenology with reduced winter dormancy, and earlier physiological ripening. They also affect the spread of disease and pests. Climate change is leading to more frequent and more extreme, extreme weather events with increased drought conditions and wildfires in regions such as Australia, California, Spain and South Africa, spring frosts and more violent storms leading to flooding. This means greater variation in quantities of wines produced from one year to the next with increased volatility in wine prices. Climate change imperils the smooth flow of goods as transport infrastructure and ports are vulnerable. Wine consumers are increasingly concerned about climate change and are becoming more demanding in terms of wanting to know what goes into the products they buy and how they are made. This discussion will cover each of the aspects across the entire global wine supply chain.

The event will be moderated by Jane Masters MW and there will be an opportunity for attendees to ask questions.

The panel includes:

Dr Greg Jones – Chair, Evenstad Center for Wine Education / Wine Studies
Lulie Halstead – CEO Wine Intelligence
Jane Masters MW (moderator) – view MW profile
Mike Veseth – Wine Economist, Professor emeritus of International Political Economy at the University of Puget Sound (Tacoma, Washington)

This webinar is open to everyone, but capacity is limited. Follow this link to register.