When having a close look at what is available on the different markets, one might think that every single wine style is available to any consumer profile at any price point. However, when having a closer look at what on the different markets, the answer is not that obvious.
Generation X - replacing baby boomers - are increasingly being taken into account along with Millenials as the main wine consumer categories. In order to have a far-reaching approach to availability of wine styles, style has to be considered in a broad manner, including not only wine styles (white, red, sparkling, fortified, sweet) but also wine categories such healthy wines (low or no SO2, low or no alcohol wines), premium and luxury wines and regional wines. Availability will be considered as both physical presence of a wine and affordability by new consumers. Economic, social, health, cultural, sustainability and legal issues do have an influence on the availability of wine to the new consumer demographics.
As far as economic issues are concerned, a categorization of Generation X and Millenial's consumption habits have to be considered. The average annual income in the case of Generation X is 95.100 USD (Source: US Department of Labor, 2017). They can buy any wine. In its 2017 report, the Silicon Valley Bank predicts that Generation X will surpass the Baby Boomers in wine purchasing, both in volume and dollars spent, by 2021.
They are part of the premiumization trend. As a response to that, Gallo is heavily investing in premium wine brands - not branded Gallo - and will continue to do so in the coming years. Millenials have a lower average income, at around 65.300 USD. Their limited purchasing power makes that not all wines can be purchased by this consumer category. To face this situation, the Tesco offer in the UK amounts to around 650 SKUs (Stock Keeping Units) coming from 17 different countries and featuring over 120 different grape varieties are available online as of March 2018. Besides, 70% of the wines are priced under 10 GBP. In this case, variety and affordability of many wine styles is assured by Tesco. However, they cannot afford Bdx GCC such as Château Latour 2007 at 714 € (Lavinia) or a 2003 at 1570 €/bottle.
And beyond mere economic issues, geographical availability of wine styles has to be taken into account. For instance, some wines stay local, as Pankaj Ghemawat, theoretician of the semi-globalization concept states. This is notably the case of wines from regions such as Savoie in France, Lanzarote in the Canary islands in Spain or wines from countries like Switzerland or Greece.
The way the wine industry handles social issues is common to all consumers. Some producers do make wines that are aimed at a certain segment of the market, therefore aiming at a limited market impact / availability. For instance, Rosé Piscine is a sweet low degree rosé wine made by the French group of cooperatives Vinovalie especially for women and a context of summer / holidays. Aromatic intensity is aimed at keeping up with dilution brought by the addition of ice cubes in the mix. Rosé piscine is therefore only a seasonal product, not readily available all year long. Besides, it is not attractive for all wine consumers.
On the other hand, Ice Imperial from Moët & Chandon is made for parties. It is a blend of a majority of black grapes and 10% chardonnay with an added sugar of 45 g/l. Aimed at being served with ice cubes and drunk as a cocktail, it is destined at those who want to drink wine in a light / relaxed way (Millenials). Ice Imperial: mainly distributed in the “night channel”.
Health issues are increasingly a priority to all consumers. Both Generation X and Millenials pay close attention to health issues. As a result, organic/biodynamic, natural wines and low alcohol wines are wine categories on the rise. As regards grapes for wine, biodynamic production is represented worldwide by 639 farms certified as Biodynamic® with the largest number in France (~300) and Italy (>70). The vineyards are around 11,000 hectares. France with 4,700 hectares is the country where biodynamic viticulture is mostly spread. Four countries register more than 1,000 hectares. Two are traditional wine producers (Italy and Spain) and the others belong to the “New World” (USA and Chile). Source: Demeter 2016. Due to its limited production, the biodynamic wine segment can be considered as a niche within a niche. Therefore, biodynamic wines are not readily available. Moreover, some are very expensive, like Domaine de la Romanée Conti for example.
Linked to healthy wines, natural wines are on the rise. Natural wines data shown in a 2015 survey by Nielsen in the US revealed that 65 percent of 21- to 34-year-old were interested in natural wine. This interest can be explained, at least in part, by the fact that Millenial values do resonate with those of natural wine producers: honesty, transparency and experimentation among others.
A dozen major expos are held every year, giving evidence of the dynamism of the natural wine movement: RAW in London, New York and Berlin, Rootstock in Sidney and The Big Glou, also in New York. In many countries, importers and distributors of natural wines see their turnover increase. This is the case for Les Caves de Pyrene in London, Vinaturel in Germany, Jenny & François in New York, just to name a few, all have seen their sales register a double-digit growth over the past five years. Besides, some top Michelin star restaurants, Noma in Copenhagen and El Celler de Can Roca in Girona, each stock hundreds of labels of natural wines. At country level, the Georgian government has invested about $500,000 since it started promoting the country’s natural wine in 2012. Source: National Wine Agency in Tbilisi. This dynamism of the industry makes this wine category readily available in many markets. In spite of these encouraging symptoms, the natural phenomenon seems far from being global – that is relating to or involving the whole world. In fact, for many experts, natural wines are still a sub-culture. According to Pontus Elofsson, head sommelier of Noma restaurant, natural wines are a Copenhagen phenomenon. In the Netherlands, Richard van der Linden, from Dutch distributor Coenecoop agrees: 75% of sales happen in Amsterdam. This is aligned with the rare existing statistics. Natural wines represent less than 1% of the total worldwide (268 billion $ in 2014). Source. Euromonitor International.
Coming back to low-alcohol wines, the interest of consumers have been steady for many years. The German Sparkling Wine Association said annual sales of non-alcoholic sparkling wine have reached about 10m bottles (2016). And, in November 2015, the German trade magazine, Lebensmittelzeitung, was reporting double-digit growth of alcohol-free sparkling wine during the first eight months of that year. In the UK for example, website betterRetailing.com reports that low-alcohol wine sales in 2017 rose by 8.5 percent, to £36.3m ($51.1m), compared with £33.3m in 2016. In Spain, Natureo from Torres, a 0% abv white wine made from Muscat grapes is readily available at retail level in the country. In Germany, alcohol free sparkling wines only represent 3% of all sparkling wine market (Source: German Wine Association, 2016).
One of the best known no-alcohol wine made in France by Vinadeis is Bonne Nouvelle while France’s other major producer, JP Chenet, offers a range of low-alcohol wines. However, these wines appear to be mainly available in the UK.
Linked to the interest in low-alcohol wines, the fortified wine category has also to be considered. The overall decline in the consumption of fortified wines by the Generation X and the Millenials is a symptom that producers of these categories have not been able to properly assess the health concerns of the consumers. Alternative to these wine styles are not available, in spite of their efforts to make this wine style attractive. Examples: drier white Ports made for aperitif; promotion of the rebujito mix, made with a base of fino or manzanilla blended with a soft drink in Montilla Moriles and other parts of Andalucía in Spain.
Finally, vegan wine category is increasingly taken seriously by retailers and distributors. For example, in October 2017, Majestic Wines – which stocks 32 vegan-friendly wines on a dedicated online section – relaunched its website, price tickets and labelling, adding vegan and vegetarian symbols. For the time being, it is only an emerging movement. Sainsbury’s and Aldi have just released new vegan ranges, lagging behind Tesco in this aspect.
Cultural issues also have an impact on the availability of wine styles. Not all countries have a culture of wine. Either they produce wine, like Spain, France, Italy or they have had historically strong ties with wine producing regions like the UK did with Bordeaux and Port for instance, and in that case, wine culture is present. Or they do not produce wine and they have no specific interest in it. Example: Russia. In mature markets, wine is mainly bought in the retail channel, with % varying from 65% to 85% (IRI / Nielsen data, 2017) depending on the country considered.
This widespread distribution of wine, makes that this product is easily present on the shelves with variety in all aspects (style, origin, grape variety). In Russia, wine registers low figures of wine consumption. Russia Average drinking habits are 6,6 liters of vodka and spirits, 57 liters of beer and only 7,3 liters of wine, sparkling wine and Champagne. Source: Rosstat, 2017. Something similar also happens in China, where 83% of alcoholic drinks consumed in China is beer, 10% spirits (baiju) and only 3,3% is grape wine, the remaining % being non-grape wine. Source: Euromonitor International 2016. In these two countries, cited as examples, cultural consumption habits, even if they are changing, make that still not all wine styles, origins and grape varieties are readily available everywhere, in spite of the rise of Internet purchasing habits notably in China.
Finally, legal issues do impact wine availability. Most parts of the globe do offer the possibility to buy and drink wine with no restriction. However, in many countries the religious law bans alcohol consumption. This is the case in countries like Afghanistan, Bangladesh, Iran, Maldives, Pakistan (excluding non-Muslims), Saudi Arabia and Somalia among others.
Even in countries like the USA, some counties and municipalities do prohibit the retail sale of alcohol. For instance, Arkansas has 75 counties, 35 of which are dry, and all alcohol sales are forbidden statewide on Sundays. New Jersey has no dry counties, but as of 2013, 35 municipalities (out of 565 statewide) prohibit the retail sale of alcohol. North Carolina does not allow alcohol sales between 2am and 7am Monday through Saturday or before 10am on Sundays.
Overall, budget restrictions, consumer interest in certain wine categories, limited availability of “healthy” wines – low alcohol, low sulfur, vegan wines – or sustainable wines, cultural habits that privilege spirits and beer over wine in certain geographies along with legal limits in certain countries, all make that all styles of wines are not readily available for the new consumer demographics. Consumer choice is restricted and s/he has to make with what’s on offer during the year and across geographies.
Published in ISSUE 103 on Fine Wine and Liquor
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