Wine’s growth represents somewhere between 2.5 and 3 times as much growth as seen in tequila, US whiskey, gin and Scotch – the fastest growing international spirits. This demand for premium wine continues the remarkable growth seen over the past decade. Since 2009, premium wine has added a staggering 90m cases, dwarfing growth in any other drinks category.
Consumers in developing markets are inching up the price scale, moving from ‘cheap and local’ to more premium local brands, then on to imported brands. In Western markets, this manifests itself through ever higher-priced premium-and-above brands in the form of either craft or brand line extensions. This has been a long-established and long-recognised trend. For most people, premiumisation is associated with spirits, for some it is linked to national spirits such as Chinese baijiu or Indian whisky, but few will readily identify the largest growth area: wine.
Since 2009, premium wine has added a staggering 90m cases, dwarfing growth in any other drinks category.
The premium wine market is now almost double that of all premium spirits combined; this growth is all the more impressive given that this trend is almost universal. Almost all supplier countries have benefited, with only French (suffering in their domestic market and China), Spanish (in several countries due to supply pressure) and Chilean (mainly in Russia) wines losing out. Driving demand are consumers in the US, Italy, the UK, Canada, New Zealand and across much of northern Europe. There was also significant growth in China, Australia and Spain up to 2018, when a mix of weakening economies and poor harvests saw these markets retrench.
Profits tend to be much higher in spirits than in wine, but demand for premium wine only reinforces how strong the premiumisation trend really is, and, of course, consumers of wine do not consume in isolation. The amount spent on $20-and-above wine has increased by over 3 million cases in the past five years. At a time when older consumers are drinking “less but better” and many younger consumers are turning to alcohol alternatives, spirits companies would be wise to pay attention to the international wine markets.
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