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Moderation and convenience - perhaps a road to SA's wine recovery?

In a report commissioned by Vinexposium, the IWSR and Wine Intelligence trace the drinks industry road to recovery following a period of deep structural challenges and changes. Moderation, premiumisation and convenience are the main driving trends...

While preparing to resume its calendar of trade fairs, Vinexposium, the company behind 10 of the world’s biggest alcoholic beverage trade events, partnered with market research agency IWSR and its consumer behaviour child company, Wine Intelligence, to issue a report charting the drinks sector’s road to recovery.

For Rodolphe Lameyse, CEO of Vinexposium, ‘the last couple of years have been a game changer for the drinks industry’, with structural transformations in logistics, packaging, product design and consumer behaviour. ‘We can see these trends on the trade show’s floor’.

Lulie Halstead, CEO of Wine Intelligence, presented the report with a positive outlook following a period of uncertainty during which the industry consolidated its stance. The key takeaway is that beverage alcohol has proved to be one of the most crisis-proof consumer goods categories. Its resilience was built upon the suppliers’ adaptability and capacity to pivot in the face of structural challenges, ever-changing restrictions, and severe supply-chain disruptions.

Most strategies followed trends that were already gaining traction pre-Covid and were merely accelerated by the economic and social impact of the pandemic, namely:

  • New or enhanced at-home experiences, with wine consumption moving beyond and between meals

  • Focus on sustainability, with shift towards localism

  • No- and low-alcohol beverages gathering momentum within a broader trend towards moderation

  • Off-premise (take away) and e-commerce significantly increase their performance while the on-trade continues to be affected by restrictions and changes to consumer behaviours

  • Premiumisation, with consumers buying at higher price across categories

  • RTDs (ready to drink beverages) gaining both market share, especially hard-seltzers, and premiumising the category’s offering“Ut eu libero at metus porttitor pulvinar vitae quis velit.”

A global view of alcohol consumption shows significant decline in 2020, with a 6.2% decrease in volume from 2019. But the long-term outlook is positive, with projected full recovery by 2023, boosted by the strong volume growth of RTDs in selected core markets.

RTDs is indeed the only category that reported positive evolution in 2020, benefitting from the immediate impact of Covid-19, with consumers seeking convenience packaging and no/low alcohol products widely available in ready-to-drink formats. This in turn meant that all other categories suffered both from a change in consumer behaviour and from restrictions to consumption on-premise. Beer (-7.1%), wine (-6.5%), spirits (-6.1%) and cider (-10.9%) all reported a decrease in volume in 2020, and although there are signs of short- and long-term recovery, RTDs are again the only category expected to see two-digit long-term growth (10.2%).


Moderation is a key behavioural trend, with at least one-third of wine drinkers actively moderating their consumption across the nine key markets Wine Intelligence looked at. The Netherlands and Switzerland are the most moderation-driven markets, with over 50% of regular wine drinkers expressing this as a concern.

This affects even key market categories and soft brands, such as Champagne: in the US, 30% of regular wine drinkers say they ‘would definitely prefer to buy a bottle of Champagne that has lower alcohol levels’ (lower than 10% ABV).

The trend is expected to gather in pace in the next few years, benefitting from less restricted ecommerce channels and more flexible route to market strategies. Consumers are, however, demanding more from the products in the no/low category, questioning traceability and expressing concern about the taste, poor availability and lack of knowledge about their ingredients and production.

Moderation has also had a broader impact across categories, by promoting staggered intake, often alternating alcoholic with no/low alcohol beverages, a behaviour supported by an inevitable change in lifestyle, with consumers staying at home and planning their beverage intake around a new routine.

Premiumisation and Sustainability

Such change in consumption patterns, also made possible by a greater availability of disposable income, supported a premiumisation (purchase of products above average market price) across markets and categories. Reduced mobility had a particular impact in the high-premium and luxury sectors: these shifted from being mostly travel-based to locally-focused, with localism falling under the broader sustainability trend.

Sustainability continues to be an important behavioural guiding factor, conditioning both product perception and buying decisions – 33% claim they will always buy sustainable wines when given the choice.

According to Halstead, however, ‘sustainability is yet to gather momentum overall’. Why? Because ‘wine, as a product, is considered sustainable in itself,’ which means consumers might not actively look at, or understand, differentiating sustainability stamps.

A look at attitudes towards sustainability in wine does reveal an interesting, albeit worrying, conclusion: severe misconceptions might be impairing the understanding of differences in classifications and production methods. This in turn might be preventing a growth in market share. Organic wine’s expansion was only moderately affected by the pandemic with just over 6% growth. Still, organic wine corresponds to only 3.5% of total wine consumption, with Germany and France dominating in absolute numbers and the Nordic countries among the biggest in market share, much due to the fact that local monopolies actively favour organic over conventional products.

There’s clearly much work to be done. As an example, most consumers (55%) believe glass wine bottles are a sustainable form of packaging, even though there is an ongoing movement, promoted by wine retail & media key stakeholders, to raise awareness about the environmental impact and carbon footprint of glass bottles, the benefits of alternative formats (such as bag-in-box) and the benefits of bulk shipping.

Where there’s challenge there’s also opportunity though. As younger generations shift towards moderate and wellness-aware consumption there could be potential to seize momentum under the sustainability umbrella. This might, however, apply not to wine/beer/spirits but to no/low alcohol RTDs. A broader, more fundamental, discussion about the future of the wine & spirits industry might be just around the corner….

*all data and charts copyright of the IWRS and Wine Intelligence

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