Category: Wine Economics

Twelve Wine Consumer Trends in the Covid-19 Era

The Wine Intelligence report entitled “Wine Consumer Trends in the Covid-19 Era” was published last week and highlights a mini-boom for wine since the pandemic struck, yet it also warns of dark economic clouds on the horizon.

While key consumption markets have been turning more often to wine in the past six months, spurred by new ‘lockdown’ occasions and more drinking outside of mealtimes, there are concerns about the sustainability of this growth, given the deteriorating economic environment and possible pressure on household finances in the coming months, according to Wine Intelligence.

As part of the report, which collected data from wine drinkers in Australia, Canada, China, Germany, Sweden, the UK and the US, the research agency has identified 12 key consumer trends in the Covid-19 era, which we have reproduced below.

  1. Growth in wine consumption frequency with the shift to at-home occasions more than compensating for the loss of on-premise occasions.
  2. Heartland wine drinkers driving growth with growth in wine coming from women, Gen X and those already connected with wine.
  3. Non-food occasions driving wine growth bringing opportunity for wine to migrate to occasions where other beverages have been more dominant in the past.
  4. Slow recovery in average bottle spend on wine in the off-premise but remains below pre-pandemic levels in most markets.
  5. E-commerce for wine comes of age and it is rapidly becoming a new and habitual way of shopping for wine.
  6. Shift to wines seen as a safe choice and ‘localism’ with mainstream and local wine brands winning.
  7. Consumers increasingly cautious in their lifestyles with confident ‘Hedonist’ segment shrinking as 2020 progresses, and an increasing proportion of ‘Halters and Reducers’.
  8. Large scale events off the agenda with consumers seeking to avoid crowds, even when restrictions are lifted and the current dangers of the pandemic have passed.
  9. Travel plans remain on hold with overseas and international travel not on the agenda for wine drinkers, even when travel restrictions are lifted.
  10. Consumers becoming more distant from the on-premise, shifting socializing patterns.
  11. Treat-seeking behavior losing momentum as consumer spending becoming more conservative.
  12. US wine market returns to growth as wine consumption frequency grew strongly in the US, driven by Millennials.

Source: Wine Intelligence Wine Consumer Trends in the Covid-19 Era, published October 2020

 

Pouilly-Fuissé gets 22 premier cru vineyards

The French National Institute of Origin and Quality (INAO) has officially recognized 22 premier cru ‘climats’ within the Pouilly-Fuissé appellation.

The AOP Pouilly-Fuissé will become the first appellation within Burgundy’s Mâconnais sub-region to benefit from premier cru vineyards.

The 22 new premier crus account for a total of 194ha of land planted to vine, corresponding to circa 24% of Pouilly-Fuissé’s total vineyard area (800ha), spread over the four communes of the appellation: Chaintré, Fuissé, Solutré-Pouilly and Vergisson.

A proposal for the recognition of these climats as premier crus was first submitted to the INAO 10 years ago. Since then, the INAO has been working in partnership with the Organization for the Defense and Management (ODG) of the Pouilly-Fuissé appellation to assess the worthiness of these ‘terroirs’.

The 22 new premier crus, commune by commune

Chaintré:

  • Le Clos de Monsieur Noly
  • Les Chevrières
  • Aux Quarts
  • Le Clos Reyssier

Fuissé:

  • Le Clos
  • Les Brulés
  • Les Ménétrières
  • Les Reisses
  • Les Vignes Blanches
  • Les Perrières
  • Vers Cras

Solutré-Pouilly:

  • La Frérie
  • Le Clos de Solutré
  • Au Vignerais
  • En Servy
  • Aux Bouthières
  • Aux Chailloux
  • Pouilly
  • Vers Cras

Vergisson:

  • Les Crays
  • La Maréchaude
  • Sur la Roche
  • En France

#wine #bourgogne #burgundy #pouillyfuisse #Mâconnais

ZACHYS ANNOUNCES WORLD RECORD-BREAKING DEBUT EUROPEAN AUCTION OF WINES FROM THE CELLAR OF ENOTECA PINCHORRI TOTALLING £3.2 MILLION

After decades of auctions in New York and Hong Kong, the world’s leading wine auction house, Zachys, hosted its first European auction in London via livestream, on 12 September 2020. In a great success by any measure, the auction was sold out and realized £3,153,952. The wines and aquavit in the auction were from the legendary cellar of three-Michelin-star Enoteca Pinchiorri in Florence, Italy. The sale included Coche-Dury, Rouget, Dujac, Ramonet, Leflaive, Jayer, Liger-Belair, DRC, the First Growths, Pétrus back to the 1920s, Le Pin, Yquem back to the 1920s, Masseto, Ornellaia, Krug, Chave, an amazing collection of Italian aquavit in beautiful hand-blown Murano glass, all curated by the restaurant’s owner Giorgio Pinchiorri. The auction was live-streamed from Zachys’ home office in New York, by Zachys President Jeff Zacharia and Head of Auction Sales Charles Antin, while bidders logged in from home, along with intimate get-togethers in Stockholm, Geneva, Beijing and at Cabotte Wine Bar and Restaurant in London. Bidders from 20 countries, including the UK, US, UAE, China, Hong Kong, Israel, Switzerland, Sweden and Monaco, all vied to take home a piece of vinous history. The 864-lot auction featured 2,507 large formats including nebuchadnezzars, methuselahs, jeroboams, magnums and was 100% sold. 26% of the auction, or 226 of the lots, set new World Records, and an astonishing 55% of the lots set European Records, despite this being Zachys first auction in the UK. The top World Records include:

• A single magnum of 1979 Jayer Richebourg for £47,120

• A single magnum of 1990 Roumier Musigny for £47,120

• A single imperial of 2009 Pétrus for £42,160

• A single bottle of 1985 Jayer Richebourg for £34,720

• A single methuselah of 1981 DRC RSV for £29,760 Zachys sold over £115 million worth of wine at auction and retail in 2019.

In March 2020, as Covid-19 forced bidders to stay at home, Zachys quickly transformed into a digital business and was the first major auction house to offer its live auctions fully online, allowing clients to bid from anywhere globally. Despite COVID-19, Zachys has had its busiest first half-year ever, overreaching projections with over £34 million in year-to-date auction sales. Since the start of the pandemic, all live auctions have taken place through Zachys’ “Studio Sales” live-streamed, sometimes with over 150 people in the “virtual room,” watching the auctioneer from New York. Zachys even carried out a Hong Kong sale on EST, which took place 10pm-4am. Zachys’ global team hosts now-famous bidding parties, where potential buyers in Beijing, Shanghai, Stockholm, London, Hong Kong, or elsewhere can get together in small groups, enjoy a glass of Burgundy, some fine dining, and bid in real-time. The “Studio Sales” have made Zachys auctions more accessible as bidders are no longer required to attend in person. Zachys has offices in New York, Los Angeles, Napa, Washington DC, Hong Kong, Beijing, Shanghai, Stockholm and Paris. London, the historic centre of wine buying and trading worldwide, was the obvious choice for Zachys’ new European hub. Zachys’ presence in the UK capital is a key piece in a global expansion strategy that ensures the company’s global clientele will receive the same level of service regardless of time zone. Christy Erickson, Head of Europe, Zachys said: “We’re delighted with the results of our European debut. We were coming into the auction against a backdrop of global uncertainty due to the ongoing pandemic, but since wine auction sales in 2020 thus far have exceeded our January projections, we decided to forge ahead. And we’re glad we did: this auction shows that the fine-wine auction industry is still booming, and our buyers’ appetite for quality shows no sign of slowing. We’re thrilled to have set a 226 World Records and achieve over double our pre-auction estimate for this collection. We can now look forward to three more sales in New York and Hong Kong in September, three auctions in New York in October, and then we’re back in November for our second sale in London.’’ In addition to its upcoming auctions in New York and Hong Kong, Zachys will follow up the London auction with a multi-vendor sale in the city in November 2020. Visit the auction calendar here: http://www.zachys.com/auctions.

US Wine Market Adapts to “New Normal” According to Nielsen Report

US off-trade consumers are settling into new normal following the incredible sales spikes seen at the height of the pandemic, the latest data from Nielsen has shown, but US wine appears to be losing out to imports from New Zealand, Italy and France in the most recent weeks.

According to data for the week ending 22 August, wine in the US off-trade grew 17.4%, marginally lower than the previous week, and well below the 25.2% of the whole Covid period to date. Spirits meanwhile led the charge at with growth of 26.2% (down from 27.2% last week, or 33.5% over the whole Covid-period to date) led by the whiskey (24.2%), which accounts for a third of the spirits category, tequila (+59.1%), ready-to-drink cocktails (+101%) and cognac (+53.2%).

Hard seltzers also saw triple-digit gains, up 113% this week, compared to the same period last year. Although this growth has slowed slightly, it still accounts for 10.2% of sales in the latest week.  Craft and super-premium beer also showed strong sales within the core beer category, which rose 9.8% overall.

Drilling into wine sales, sparkling wine grew well ahead of table wine, rising 35.5%, compared to table wine’s 13.3% growth.  However, the data showed sales of American table wine are losing out to wines imported from New Zealand (23.6%), Italy (23.3%) and France (18.7%) at a faster rate than pre-pandemic, with the market share of domestic table wine falling 3 percentage points, on the back of a 2.5 percentage point decline in Californian wine.

US Consumers are settling into a new normal, according to Nielsen’s vice president of beverage alcohol Danella Kosmal, with year on year trends up 18.5%

However, Kosmal stressed that although off-premise growth rates for alcohol continue to outpace growth rates of total consumer goods, the off-premise growth was not enough to make up for the total losses in on-premise channels. “There has been a significant shift in volume from on-premise channels, which has exaggerated growth rates for off-premise alcohol,” she said.

The latest data showed that the US Wine Market Adapts to “New Normal” According to Nielsen Report premise saw steady growth, showing the seventh consecutive week without decline, with the average rate of sale per average establishment up 3% compared to last week. This metric varied in different states across the US, with New York rising 4% in the last week, and Illinois seeing the strongest growth, at 11%, making it only a third (36%) below the ‘normal’ level of the same week last year.

However, the average rate of sale in outlets that are currently open is still down 22% compared to the same period last year.

WINE NEWS: ALCOHOL BAN LIFTED, BUT A LONG ROAD TO RECOVERY FOR THE SOUTH AFRICAN WINE INDUSTRY

The South African wine industry acknowledges today’s announcement by President Ramaphosa to resume local trade and distribution of alcohol under alert level 2 from midnight 17 August 2020, but says the industry still has a long road to recovery.

“Although we are grateful to start trading and delivering online sales again, we are dismayed at the extent of the damage caused to our industry during the temporary ban on exports and extended restrictions on local sales,” says Rico Basson, MD of the wine industry organization Vinpro.

“It might be too little too late. Many wine businesses have already closed down and a long road to recovery lies ahead for the industry as a whole,” says Basson.

The industry is believed to have lost more than R7 billion since the introduction of sales restrictions in March 2020. Following the initial nine-week ban on local sales, five-week ban on exports and second domestic sales ban, Vinpro estimates that more than 80 wineries and 350 wine grape producers would go out of business over the next 18 months, with a potential loss of more than 21 000 jobs across the value-chain.

Vinpro has been working closely with industry partners on a disaster recovery plan to address the urgent need to stabilize the sector, including the extension of further excise relief for the current year, as well as the 2021 season, addressing bottlenecks and challenges at the Cape Town Port and formulating solutions to reduce a current wine surplus of around 300 million litres.

“The wine industry is geared to reopen domestic trade and distribution with all necessary health and safety regulations in place, while focusing on changing behaviour with regard to responsible production, promotion, trade and consumption.”