To get an idea of where the wine industry is going, we have to take a little from this and a little from that. Starting off with expectations, according to Beverage Daily in an article by Rachel Arthur, the total alcohol eCommerce sales in key worldwide markets are expected to grow a whopping two-thirds over the next half-decade getting up to $42 billion according to IWSR Drinks Market Analysis.
Until the Pandemic, the wine drinkers were not that much into buying wine on the internet. It was more visiting wine tasting rooms, pondering which label looked the best in the grocery aisle, reading wine gook’s blogs, and magazine advertisements, etc. With the Pandemic, internet sales shot up 43 percent in 2020. Gee, go figure. Was it because stores that sold booze, restaurants, and other mom and pop businesses were shuttered by those that thought they knew best and still, unfortunately, routinely passing mandates? People out of work have a lot of time on their hands. My dad would always say to us kids, “Nothing good comes from boredom and always quoted – idle hands are the devil’s workshop, so get your butts out there on the ranch, or the packing shed, and make your own money for your hot rods, girls, and a college education! “ Which we did, like most River Rats in the Delta, and were fortunate to have a place to earn money from the age of 10 years old.
About 25 percent of alcohol drinkers around the world are now buying on the internet, with two-thirds of them using eCommerce while in this Pandemic. China is the largest to switch, with over 60 percent of drinkers buying online, and here in the states at 54 percent for the first-timers online. But, wine’s share of the internet market is being tested by beer, cider, and hard liquor, which are at less than one-fifth of the market but are catching up with wine. Older buyers are looking for good prices and known brands and do not mind waiting for delivery. Whereas the younger buyers are willing to pay for more rapid delivery and interesting premium brands. Wine is the top supplier in most of the world markets at 40 percent in eCommerce. The exceptions are China, Colombia, Mexico, and Nigeria, where spirits are more popular. Expect your wine purchases to go up in price, like everything else, because there are a lot of costs of production that are skyrocketing for the grower, wineries, and supply chain that have to be accounted for. The best deal is to buy locally produced wine because of fewer supply line issues, and it is the right thing to do which the industry thanks you for that. Especially because of the Pandemic, smaller wineries are financially stressed, and many are being gobbled up by the “Big Guys.”
We have always said it is important that when we old winos move on that, the younger generation must pick up the slack. Well, they might not be what we hope. They seem to tend to interesting cocktails, seltzers, beer, and their moderation in consuming alcohol which in the scheme of things is a good thing for safety and health. Drink Business article by Patrick Schmitt points out that 40 percent of regular wine drinkers are seriously moderating the amount of alcohol they are drinking. Many of those aged between 18 to 34 are reducing their wine drinking from studies around the world. The trend is either reducing the number of drinks, especially at social events, reducing the strength, or switching by alternating drinks substituting with something like tonic water between glasses of wine. They also are mixing up their own lighter alcohol drinks. Millennials, up to the age of 40, are the strongest moderators. The rate of wine consumption of regular wine drinkers, in the UK, for example, since the beginning of the last decade, has dropped in the 18-34 group by 50 percent.
So, the ones holding up the industry are Generation X (born in the ‘60 – ‘80s), Baby Boomers (‘46 to ’64), and seniors (World War II and back) combine into those over 55 years old. It is a changing mix of who the wine consumer is, the ways they are buying wine, and how they are consuming it that will dictate how to market the industry. It is helpful that wine is showing more and more to be a safer and healthier choice of alcohol—more on that next month.
Wishing you all a Happier New Year.
“I love everything that is old; old friends, old times, old manners, old books, and old wine” Oliver Goldsmith. The Vicar of Wakefield.