Wine is enjoying a "mini-boom" but "dark economic clouds" are on the horizon

Wine is enjoying a “mini-boom” in the Covid-19 era, but dark economic clouds are on the horizon for the category, according to the latest report from Wine Intelligence.

The Wine Consumer Trends in the Covid-19 Era report shows wine drinkers across key consumption markets have been turning more often to wine during the Covid-19 pandemic, spurred by new “lockdown” occasions, and more drinking outside of mealtimes.

The report draws on tracking data collected from nationally representative samples of wine drinkers in seven major wine consumption markets in April and August 2020.

The growth in wine consumption occasions comes as online sales of wine have exploded in markets where regulations permit this channel, with younger and “more involved” wine drinkers leading the surge.

Wine Intelligence said the report also raises concerns about the sustainability of this growth, given the deteriorating economic environment, and possible pressure on household finances in the coming months.

It said: “So far, many consumers have traded down in terms of their spend per bottle of wine to fund the increasing volume of purchase and have returned to more mainstream trusted brands at the expense of less well-known and more pricey offerings.”

Consumer responses about their economic behaviour indicates a general tightening of belts will occur during the coming months, the report stated.

It added: “In most markets the future of the on-premise channel and hospitality generally looks very uncertain. An increasing proportion of wine drinkers are not planning on going out to eat for the foreseeable future, and holidays and hotel stays are off the agenda for most. The only exceptions to this are in China and Germany, where popular opinion is more positive about these activities and consumers appear more confident generally.”

Wine Intelligence chief executive officer, Lulie Halstead, said: “Our data earlier this year pointed to wine being one of the winners of lockdown, and this trend has solidified over the past few months.

“Producers and off-premise retailers with strategies focused on their heartland of high to involved, frequent drinkers have found reward, while new occasions have prompted a different dynamic in terms of product and packaging.

“The worry for our category remains the extent and longevity of the economic downturn. Household finances across many markets are currently benefiting combination of job retention schemes and lack of spending on vacations and going out, but this may not last. The broader issue of consumer confidence in the economy, and in their own safety, may start to weigh on the category in 2021.”

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