How will coronavirus affect wine consumption? ‘We may have seen the end of the premiumization trend for now’

By Rachel Arthur contact

- Last updated on GMT

The most immediate change is that wine is now being drunk at home rather than in bars and restaurants. Pic:getty/littleny
The most immediate change is that wine is now being drunk at home rather than in bars and restaurants. Pic:getty/littleny

Related tags: Wine

How will the coronavirus pandemic change the wine world? Wine Intelligence looks at how consumer trends are likely to shift: from a dramatic move towards off-premise sales, to a new awareness and emphasis on local origin products.

In January 2020, Wine Intelligence published its annual update of its Global Trends in Wine report. Since then, of course, the global coronavirus pandemic has changed the economic, social and political agenda of the world in a completely unprecedented way.

So how will this affect wine? Wine Intelligence looks at how trends may evolve during the current crisis and its aftermath.

'Mega trends remain the same - but their evolution has undoubtedly changed'

In January, Wine Intelligence said the key themes in global trends in wine for 2020 revolved around ‘The Four Rs’: Relationship, Retail, Repertoire and Responsibility.

“In our new environment, we believe these mega trends are as valid as they were in the pre-coronavirus world,”​ says Lulie Halstead, CEO, Wine Intelligence. “However, the way in which these trends present themselves in the current context, and the path of their evolution through the remainder of this year and beyond, has undoubtedly changed.”

On-premise vs off-premise

In January, Wine Intelligence noted the rise of demand for eating out and experiences to go with that. This lead to more frequent wine consumption in the on-premise section, increased spending, and trading up to more premium choices.

With the on-premise market wiped out in a number of markets under the coronavirus pandemic, this is evidently one of the biggest changes in the wine market.

“We have now witnessed an unprecedented, fundamental and sudden shutdown of the on-premise,"​ notes Wine Intelligence. "In contrast many off-premise retail channels are currently reporting ‘Christmas’ levels of sales over the past few weeks, although these dramatic uplifts in retail sales are not anticipated to continue.

"The inevitability of a global economic recession suggests that this switch to at-home consumption of wine will be both a medium and potentially long-term trend. However, the fundamental need to have a strong and memorable experience in out-of-home settings will continue –just not as frequently and most likely with a more restricted budget.”

Premiumization

The wine industry had been enjoying an ongoing shift towards premiumisation, with younger drinkers driving this trend. This has been driven by the ‘less but better’ mentality.

This, however, is another trend that may be turned on its head by coronavirus:“We may have seen the end of the premiumisation trend for now."

The shock to the world economy is unprecedented in its sharpness, with its short-term and long-term impact still being analysed. 

"Economies will recover, but consumer confidence may take longer to come back. Value for money will be paramount and this will be particularly true for the category of wine, where price-points are distributed across such a broad range, delivering quality options at lower prices.”

Wine origin

Another shift in consumption that we could see emerging is a new emphasis on local wines.

“We anticipate a renewed focus on domestic and local wine in wine producing countries, reflecting national populations becoming more inwardly-focused and protective. This will also reflect consumers’ agendas to support their local businesses at a time of economic crisis.

"Potentially, there could be a consumer backlash against certain countries and regions, depending on how the pandemic is managed.”

Wine consumers

Something that isn’t likely to change enormously, however, it the make-up of the general wine drinking population: the wine drinking population continues to age globally. Similarly, consumers’ lack of loyalty to any particular category will continue – with consumers choosing drinks from across different beverage categories rather than categorising themselves as a ‘beer guy’ or a ‘wine guy’.

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