The Future of Wine: Capitalizing on New Opportunities and Preferences

Published by	Datamonitor
Published	February, 2010	Product code	114527
Content info	171 pages
Price	US $ 2995 PDF by E-mail (Single User License) US $ 7488 PDF by E-mail (Global Site License)

Introduction
Related Reports

The Future of Wine: Capitalizing on New Opportunities and Preferences published by Datamonitor in February, 2010. This report consists of 171 pages and the price starts from US $ 2995.

Introduction

Abstract

Introduction

Unlike the beer market, wine has not experienced a sustained decline and has continued to grow in value in some regions despite the economic crisis. Success in the market will be driven by appealing to the continuing growth of consumers' trading up tendencies in core markets while educating and heightening the appeal of wine among new consumers in emerging markets and younger demographic cohorts.

Scope of this research

Detailed insights and analysis documenting the drivers and inhibitors of the wine market
Exclusive occasions, market and consumer survey data and analysis covering each category
Strategic conclusions combined with actionable recommendations for all industry players looking to fully capitalize on this market
Countries covered: France, Germany, Italy, the Netherlands, Spain, Sweden, UK, US, Australia, Japan, South Korea, China, India, Brazil, and Russia

Research and analysis highlights

Alcohol sales growth is suffering from the affects of the global downturn, but longer term trends such as moderation for health or expenditure reasons are well established threats. The shift towards premiumization and a higher value/lower volume consumption pattern is set to continue but has lost momentum and is not forestalling the sales decline.

Health is one of the most significant trends influencing CPG brands in the present. Wine is best placed of the three main alcohol categories to capitalize on this, and regular moderate wine consumption has often been linked with health benefits. The industry has adapted further to this trend and lower alcohol wines have already seen some success.

Price and value-for-money are growing as influencing factors in what drinkers consume, where they consume and in what volume. The negative economic backdrop has clearly been a major motivator in this, and has further favored the off-trade over the on-trade.

Key reasons to purchase this research

Consumer understanding: obtain a detailed understanding of consumer attitudes and behaviors towards wine
Market understanding: identify the key wine markets and product innovation trends in 15 countries across four territories
Ideation: find inspiration for innovative formulations and positioning that takes advantage of consumers' desires for premium and health attributes

OVERVIEW

Catalyst
Summary

THE FUTURE DECODED

INTRODUCTION: Wine is beer' s principal competitor in the global alcoholic drinks market
TREND: The overall alcoholic beverage market is defined by its maturity and the moderate consumption behaviors of consumers
- Sales performance in the alcoholic beverages market highlights the contrast between the saturated, static markets of the West and the developing potential of key emerging markets
- Trends in consumers' consumption occasions mirror the flat performance in sales volumes
- Moderation, driven by rising attentiveness to health issues, is increasingly characterizing many consumers' alcoholic beverage consumption behaviors
- Alcohol abstainers: although a minority, those that never drink account for a sizable share of LDA consumers
- Key takeouts and implications: growth potential in the alcohol market will be centered on tapping new consumer groups and the sustenance of trading up behavior

TREND: Wine is a popular alcoholic beverages category that is not experiencing the same slow sustained decline seen in beer, cider and FABs
- Wine sales figures show mixed fortunes, although the category is not in the middle of a sustained decline
- Wine occasions are one of the key consumption occasions in the alcohol market but frequencies in some developed markets are falling
- Wine consumption is still skewed towards older age groups
- Categorization of wine consumers can cross typical demographic groupings with differing mindsets having important lessons for the industry
- Key takeouts and implications: the outlook for wine remains more positive than that for other major categories despite the downturn

TREND: On and off-trade dynamics in the wine market: consumers' off-trade consumption is the fundamental driver of category sales
- The shift in alcohol sales from the on-trade to the off-trade reflects a trend predating the global economic downturn
- The economic climate is influencing consumers' propensity to consume on-trade and also their product choices
- Time scarcity and related external pressures on alcohol consumption occasions adds impetus to the move to the off-trade
- Brand choice is being influenced by price both on and off-trade, although this is, perhaps surprisingly, more marked off-trade
- The wine category is rooted in the off-trade in most key markets
- Key takeouts and implications: the strength of the off-trade in the wine market continues to offer a reasonable degree of security for the wine industry

INSIGHT: Changing consumer preferences in the wine market: food and health associations are strong points for wine
- Some consumers are shifting between categories based on price and value-for-money considerations, but habit and experiential attributes remain highly important
- Wine' s continued success is heavily based on its strong association with eating
- Wine is a fundamentally social consumption experience, influencing its suitability for different types of occasions
- The influence of health on alcohol choice: wine benefits from widespread awareness and acceptance of certain healthy attributes but still faces challenges in maintaining a credible healthy positioning
- Consumers' origin and style preferences within wine are influenced by quality, sensory and value factors
- Distribution channel preferences among consumers are shifting in favor of supermarkets and convenience stores
- Authenticity is a growing consumer motivator and stronger point for the wine market
- Key takeouts and implications: wine continues to capitalize on its association with eating and actively benefit from the moderation of non-food related drinking occasions

INSIGHT: Innovation trends in wine: upscale and natural/ethical halo claims lead in new product releases
- Recyclable is the leading product claim associated with wine, underlining the growth of issues such as ethicality and sustainability in the market
- Manufacturers have continued to focus on meeting the upscale/premiumization trend despite the economic crisis
- Mature has emerged as a tag in wine as manufacturers and marketers embrace the core older consumer base more openly
- Organic claims have become increasingly relevant as a premium measure
- Private label wine releases have been given impetus by the economic backdrop and increased credibility among consumers
- Key takeouts and implications: tracking the key consumer mega-trends is essential to directing innovation in the wine market

ACTION POINTS

ACTION: Build a compelling case for brand loyalty in the off-trade
ACTION: Be aware of the risks of discounting and promotions to post-recessionary sales and brand equity
- (Untitled sub-section)

ACTION: Target comfort-based and social occasions
ACTION: Look at inorganic growth opportunities through co-operation and consolidation
ACTION: Online distribution is a major opportunity for the wine industry
ACTION: Social media presents opportunities for targeting younger wine drinkers
ACTION: Enhance approaches to effectively educate consumers
- (Untitled sub-section)

ACTION: Be ready for renewed trading up opportunities during the post-recessionary period
- Maintain a strong focus on innovation and R&D during times of economic uncertainty
- Start planning for the longer term by continually tracking consumers as an economic recovery begins to become a reality

APPENDIX

Methodology
Further reading and references
Ask the analyst
Datamonitor consulting
Disclaimer

FIGURES

Figure: Alcoholic beverages market value and growth, 15 countries, across Europe, North and South America, and Asia Pacific
Figure: Alcoholic beverages market value (US$m) and volume (millions liters), by country, Europe, 2003 - 13
Figure: Alcoholic beverages market value (US$m) and market volume (million liters), Brazil and the US, 2003 - 13
Figure: Alcoholic beverages market value (US$m) and market volume (millions liters) by country, Asia Pacific, 2003 - 13
Figure: Number of alcoholic beverage occasions (millions), in 15 countries across Europe, the Americas and Asia Pacific, 2004 - 14
Figure: Number of LDA per capita alcoholic beverage occasions, in 15 countries across Europe, the Americas and Asia, 2004 - 14
Figure: Male dominance in expenditure on alcohol mirrors that seen in occasion numbers
Figure: Number of alcoholic beverage occasions (millions), Europe, comparison by gender, 2009
Figure: Number of alcoholic beverage occasions (millions), Europe, by gender, 2004 - 14
Figure: Number of alcoholic beverage occasions (millions), US and Brazil, comparison by gender, 2009
Figure: Number of alcoholic beverage occasions (millions), US and Brazil, by gender, 2004 - 14
Figure: Number of alcoholic beverage occasions (millions), Asia Pacific, comparison by gender, 2009
Figure: Number of alcoholic beverage occasions (millions), Asia Pacific, by gender, 2004 - 14
Figure: Number of alcoholic beverage consumption occasions (millions), by age, in 15 countries across Europe, the US, South America and Asia Pacific, 2004 - 14
Figure: Number of per capita alcoholic beverage consumption occasions, by age, in 15 countries across Europe, the US, South America and Asia Pacific, 2004 - 14
Figure: Consumer survey: the level of attention given to ‘ensuring you do not drink too much alcohol in general' , by age, in 15 countries across Europe, the Americas, and Asia Pacific, 2008
Figure: Consumer survey: How much attention do you give toward the following? Potential weight gain from drinking alcohol
Figure: In Europe, Italians are showing the highest overall commitment to consciously moderating their alcohol consumption
Figure: Over a quarter of US drinkers strongly agree that they are making an effort to moderate consumption
Figure: Asia Pacific consumers, compared to consumers globally, are less committed to moderating their alcohol intake, despite relatively high overall levels of interest in restraint
Figure: Consumer survey: Please indicate to what extent you agree or disagree with the following statements: I make a conscious effort not to drink too much alcohol
Figure: Europeans are highly attentive to alcohol spend, but its impact on overall consumption is limited
Figure: Brazilians and Americans show a greater likelihood to cut consumption and are more attentive than Europeans, but a stark gap is still apparent
Figure: Asia Pacific exhibits a similar attentiveness/behavior gap in their alcohol consumption
Figure: Consumer survey: How much attention do you give toward the following? The amount of money you spend on alcohol
Figure: Consumer survey: Please indicate to what extent you have done the following more or less frequently in the past six months: Cut down on the overall amount of alcohol you buy/consume
Figure: Rate of alcohol abstention (% of LDA population and number of abstainers, millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2009
Figure: Rate of alcohol abstention (% of LDA population), by gender, in 15 countries across Europe, the Americas, and Asia Pacific, 2009
Figure: Rate of alcohol abstention (% of LDA population), by age, in 15 countries across Europe, the Americas, and Asia Pacific, 2009
Figure: Wine market value (US$m) and volume (liters millions), by country, Europe, 2003 - 13
Figure: Wine market value (US$m) and volume (liters millions), Brazil and the US, 2003 - 13
Figure: Wine market value (US$m) and volume (liters millions), by country, Asia Pacific, 2003 - 13
Figure: Number of wine consumption occasions (millions), Europe, Brazil, the US, and Asia Pacific, 2004 - 14
Figure: Per capita wine consumption occasions, Europe, Brazil, the US, and Asia Pacific, 2004 - 14
Figure: Number of per capita wine consumption occasions, by gender, Europe, 2009
Figure: Number of per capita wine consumption occasions, by gender, Brazil and the US, 2009
Figure: Number of per capita wine consumption occasions, by gender, Asia Pacific, 2009
Figure: Number of wine consumption occasions (millions), by gender, Europe, Brazil, the US and Asia Pacific, 2004 - 14
Figure: Percentage share of wine consumption occasions, by gender, Europe, Brazil, the US and Asia Pacific, 2004 - 14
Figure: Wine marketers are more directly targeting women consumers, especially female Young Adults
Figure: Number of wine consumption occasions (millions), by age group, in 15 countries across Europe, the Americas and Asia Pacific, 2009
Figure: Number of per capita wine consumption occasions, by age group, in 15 countries across Europe, the Americas and Asia Pacific, 2009
Figure: Overall alcoholic beverage market volume sales (million liters), by on-trade versus off-trade, in 15 countries across Europe, the Americas and Asia Pacific, 2003 - 08
Figure: Share of overall alcoholic beverage market volume sales (%), by on-trade versus off-trade, in 15 countries across Europe, the Americas and Asia Pacific, 2003 - 08
Figure: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Europe, 2009
Figure: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Brazil and the US, 2009
Figure: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Asia Pacific, 2009
Figure: Number of on-trade alcoholic beverage consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004 - 14
Figure: Number of off-trade alcoholic beverage consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004 - 14
Figure: In light of recessionary conditions, Europeans, especially the French, Germans and Italians, are showing a tendency to restrain their eating out
Figure: Americans and Brazilians are showing an above average propensity for cutting back on their eating out due to the downturn
Figure: South Koreans stand out in Asia Pacific through their significant cut backs in on-trade eating
Figure: Europeans are making a greater effort to drink more frequently at home than they are to change the frequency of their on-trade visits
Figure: Brazilians and Americans are notably contrasting in their behavior toward changing the balance and relative frequency of drinking both on and off-trade
Figure: The more developed markets of the Asia Pacific region have seen only a limited change in on- and off-trade drinking behavior compared to the emerging markets
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Cut down on the number of times you drink in bars, restaurants, etc.
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Made a conscious effort to drink more frequently at home
Figure: Consumer survey: In the last month, on average how many times did you have a drink in a bar, restaurant, pub, etc.?
Figure: Consumer survey: In the last month, on average how many times did you have a drink at home or in somebody else' s home?
Figure: Europeans' propensity for alcohol consumption on-trade is particularly strongly tied to restaurant visits
Figure: US consumers' moderate drinking patterns on-trade favor restaurants and local bars
Figure: Brazilian consumers' on-trade drinking is more frequent across most channels than their US or European peers
Figure: Asia Pacific consumers show a greater propensity for more frequent alcoholic beverage consumption in restaurants and local bars
Figure: European drinking patterns reflect a trend for regular off-trade social drinking and propensity for frequent weekly drinking at home
Figure: Half of US drinkers are prone to social drinking in others homes several times a month
Figure: Brazilians show a high propensity for regular weekly alcohol consumption in the home
Figure: Asian consumers exhibit a much lower propensity for social drinking in the homes of others
Figure: UK and Spanish consumers show the most striking tendency to trade down in brand terms off-trade compared to on-trade
Figure: A quarter of Brazilians are switching to cheaper alcohol brands both on- and off-trade
Figure: Australians have shown a particular tendency to purchase cheaper brands for off-trade consumption in recent months
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Bought cheaper brands of alcoholic drinks when drinking in bars, restaurants, etc.
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Bought cheaper brands of alcoholic drinks when drinking at-home
Figure: Overall wine market volume sales (million liters), by on-trade versus off-trade, in 15 countries across Europe, the Americas, and Asia Pacific, 2003 - 08
Figure: Share of overall wine market volume sales (%), by on-trade versus off-trade, in 15 countries across Europe, the Americas, and Asia Pacific, 2003 - 08
Figure: Share of wine consumption occasions, by on-trade versus off-trade, Europe, 2009
Figure: Share of wine consumption occasions, by on-trade versus off-trade, Brazil and the US, 2009
Figure: Share of wine consumption occasions, by on-trade versus off-trade, Asia Pacific, 2009
Figure: Number of on-trade wine consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004 - 14
Figure: Number of off-trade wine consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004 - 14
Figure: Consumer survey: factors influencing consumers' alcoholic beverage choices, 2008
Figure: Italian and Spanish consumers have shown a particular tendency to switch types of drink based on price
Figure: Consumers in the Americas are switching alcohol types based on price more than their global peers
Figure: Consumers across Asia Pacific are more likely to trade down their choice of alcoholic drink than their peers globally
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Chosen cheaper type of drinks (e.g. beer instead of spirits)
Figure: Consumer survey: In the past six months, to what extent have you done the following more or less frequently: Chosen alcohol on the basis of how well it goes with food
Figure: Wine is particularly popular in the home as an accompaniment to food
Figure: Wine is dominant in most countries as the choice for accompanying a meal in the home
Figure: Wine is a popular choice for a relaxing drink at home, but beer remains more popular overall for this purpose
Figure: Wine is the most popular option when enjoying food in the on-trade, but beer is a close second
Figure: Beer remains the dominant on-trade drink although wine is second choice in many countries
Figure: Wine is not particularly favored for high-energy nights out
Figure: Wine is comfortably the most popular choice at dinner parties, emphasizing the sophistication and connoisseurship associated with the category
Figure: Southern Europe and Russia stand in contrast to the rest of Europe in how much health influences alcoholic beverage choice
Figure: Health is a below average influence on US consumers' alcoholic beverage choice
Figure: Australian and Japanese consumers stand out regionally with their lower concern for health in their drinks choices
Figure: Consumer survey: Please tell us how much influence the following factors have in your alcoholic beverage choice: Health
Figure: The most mature European markets have seen relatively limited shifts in behavior, favoring low-alcohol versions of well known brands
Figure: The contrast between Brazil and the US highlights the limited traction of health as a factor in alcoholic drinks purchases in mature markets compared to a greater degree of openness in emergent ones
Figure: Australia and Japan contrast the growing interest in lower alcohol brands in Asia' s emerging markets and South Korea
Figure: Consumer survey: In the past six months, please indicate to what extent you have done the following more or less frequently: Opted for lower alcohol versions of favorite brands
Figure: Wine distribution (% of volumes sales), by channel, total for 15 countries across Europe, the US, Brazil, and Asia Pacific, 2003 - 08
Figure: The top 10 product claims in wine, across 15 countries in Europe, the US, Brazil, and Asia Pacific, 2004 - 09
Figure: Case study: Cowhorn' s and Sainsbury' s wines highlight practical strategies for increasing the sustainability of wine packaging
Figure: Recyclable was a very popular tag in 2006 and 2007, but its usage has faded dramatically in the past two years
Figure: The upscale tag has been relatively popular since 2005
Figure: Upscale product releases in wine have continued apace, positioned to capture the emergent post-recessionary consumer
Figure: Companies have begun to use mature as a tag for wine in the last three years
Figure: Organic has become a popular tag in all industries but this has fluctuated somewhat in the wine industry
Figure: Organic and natural ingredients rank low on consumers' list of influences on purchase choice for alcoholic drinks
Figure: Private label releases increased significantly in the wine industry in 2009
Figure: Manufacturers and retailers looking to deliver value-for-money must provision the factors associated with the PPI, but while also offering consumers lower than expected prices
Figure: Majestic wines has responded to recessionary consumers needs with increased flexibility in minimum volume purchases
Figure: iflorist demonstrates an effective, convenient way to tap into consumers' trading up impulses when presenting wine as a gift
Figure: Naked Wines brings niche wines to a wider UK audience online
Figure: Datamonitor' s Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term