Trends in wine trade reflect sustainability, localism, DTC

Humans have been making wine since before recorded history, but trends in the modern industry point to deeper currents that marketers can mine.

Why it matters

Categories will have their specificities, and none more so than wine which, unlike most beverages, has an audience ranging from value buyers to multi-year research degree educated masters of wine; it is made all around the world and its history stretches back between six and seven millennia; it is at once a daily product, a religious symbol, and an investment-grade asset. It’s worth looking at.

What’s going on:

• Sustainability
  
  Uncommonly exposed to climate change, wine producers need to ensure sustainability. But so does the wider wine industry, which sells the product around the world.
  
  Here, a demand is growing for a sustainability standard that can help consumers make greener choices and give producers and distributors a benchmark. Meanwhile, some brands are experimenting with new packaging formats such as biodegradable paper containers, at a time when the price of glass is rising along with the cost of transporting heavy wine bottles.
  
  
• Localism
  
  While the wine industry has always relied on its patriots (no prizes for guessing the provenance of most of the wine consumed in France), new players are emerging, catering to audiences struck by an inflationary environment.
  
  China, now one of the major producers of wine, has not quite become the wine exporting and consuming behemoth that experts were touting some years ago – a pandemic that has kept people at home and extensive anti-graft laws from central government haven’t spurred consumption of a luxury product – but now some local producers are starting to see strong domestic sales, as well as local tastemakers causing waves in the industry.
  
  In the UK, the Kent-based winemaker Chapel Down has seen post-pandemic (and post-Brexit) sales soar as British drinkers swap French Champagne for English sparkling wine. Similar to trends in Chinese buying patterns, winemakers are observing some patriotism to sales that has helped to pull Chapel Down into profit.
  
  
• At-home consumption likely to persist
  
  DTC wine sellers like the publicly-traded Naked Wines PLC have found that pandemic-induced sales increases have persisted with a 77% two year sales boost fuelled by repeat customers, and by a successful US launch that offers strong potential for the company.
  
  As the company explained during the pandemic, part of the insight that drives its success is to build a base of happy customers that can then provide makers much-needed security, bringing a marketplace model to the direct-to-consumer space.
  
  Still, some reports suggest that as the boomer generation diminishes, wine might fall prey to millennials’ interest in other beverages better suited to on-trade consumption than wine. Similarly, other products are starting to deploy the wine business’s tendency to connoisseurship but catering to far more accessible price-points.

Sourced from Beverage Daily, The Guardian, Jing Daily, Retail Gazette, FT, WARC