Fair trade wine tipped to be next big thing in ethical alcohol

By Guy Montague-Jones

- Last updated on GMT

Related tags: Fair trade, Datamonitor

Datamonitor has predicted that fair trade will be the next big ethical trend to hit the alcoholic drinks market.

The market research firm expects wine to lead the way as consumers are particularly interested in how wine is made and the traditions involved. According to its research, the market has already begun to take off.

Katrina Diamonon, consumer insights analyst at Datamonitor, said: “Over the last year, we have seen a flurry of activity in fair trade wine globally, despite the economic pressures being faced by consumers.

“This activity has been driven by an increase in the quality of fair trade wines, as well as awareness of the concept as well.”

UK leads the way

The UK fair trade market for alcohol is leading the way as the largest in Europe – worth £26m last year. And Datamonitor expects year-on-year growth of around 18 per cent over the next five years.

Standardised labelling has been a big driver for the UK market as consumers have come to recognise and trust fair trade logos. But that is not to say that opportunities for growth do not exist elsewhere.

Datamonitor expects strong double-digit growth in the fair trade alcohol market in Australia, Japan and North America.

The market research firm said there are examples already of wine producing regions that have benefited from the growth in the fair trade market.

In Argentina, for example, the economic crisis of 2001 resulted in small grape producers being squeezed out of the market by larger commercial operations. Fair trade aims to help such smaller, disadvantaged producers by buying their grapes at a guaranteed minimum price and often paying a social premium to benefit the broader community.

Awareness barrier

One potential barrier to the development of fair trade wine is that awareness of labour issues surrounding its production is less than it is for other major fair trade commodities like cocoa and coffee beans.

But Diamonon told BeverageDaily.com: “While consumers may not necessarily be acutely aware of pressing labour conditions surrounding the wine industry, their growing awareness of the benefits of fair trade should improve their perceptions of any product carrying fair trade certification.”

The growth of the fair trade concept may not be entirely positive for the movement itself. Although Diamonon expects significant growth still, the analyst warned that there is a danger that fair trade could become a victim of its own success.

“As the fair trade movement reaches mainstream and multinational companies start to embrace the concept, consumers may become skeptical of such offerings and suspect that fair trade is a mere marketing ploy to promote ethical credentials.”

Related topics: Markets, Beer, Wine, Spirits, Cider

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