WINE INTELLIGENCE

GLOBAL WINE
INDUSTRY OUTLOOK:
Confidence, opportunities
& threats to 2025
AUGUST 2019
 Special thanks to the global wine trade members who
contributed their insights and expertise to this study

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2 | Global Wine Industry Outlook 2019|August 2019

 Table of Contents

Executive summary 4
Global trade survey respondants at a glance 5
Wine industry trends and forecasts 6
Wine style opportunity 8
Packaging opportunity 9
Alternative wine type opportunity 10
Innovation opportunity 12
Market attractiveness 13
Threats to the wine industry 15
Future opportunities for the wine industry 17

August 2019 | Global Wine Industry Outlook | 3

Executive summary
F
or the first time in 2019, Wine Intelligence collected views from wine industry professionals around the world to
produce a strategic report focusing on confidence, opportunities and threats in the wine sector that are expected until
2025. The Global Wine Industry Outlook 2019: Confidence, Opportunities and Threats to 2025 study investigates
insights and predictions from global wine trade experts on:
• Wine business trends and forecasts • Threats and opportunities for wine
• Changes in investment and employment in wine • Wine market attractiveness
• Growth opportunities by wine type and style • Wine business investment priorities
Key takeaways:
Future expectations for the global wine market appear to be broadly positive, with global trade members
1 more confident in investment and commerce potential compared with business conditions and employment
opportunity over the next five years
Trade members that conduct business in China have the highest confidence score for the global wine
2 industry, which is based on China having the highest ratings for global commerce, investment potential and
employment opportunities

Sparkling wine is believed to deliver the highest opportunity according to the trade with rosé following closely
3 behind

Alternative wine opportunity is positively led by sustainably produced wine, followed very closely by organic
4 and environmentally friendly wines

The number one innovation opportunity identified by the trade is alternative packaging, driven by consumer
5 demand for portability and convenience

A ‘less is more’ approach to wine packaging will appeal to consumers, with lighter weight glass bottles having
6 the highest opportunity as predicted by the trade. Half of the trade respondents believe canned wine will
present high growth opportunity.

China is considered the most attractive wine market in the world by the global trade experts, followed by the
7 US and Japan, which is expected until 2025

The UK wine market is considered the least attractive market by wine trade respondents, mostly due to the
8 effects of Brexit on the UK economy, leading to this market becoming harder to predict

One of the main factors that the industry is concerned about is growing political instability and trade wars,
9 especially between the major players of the US, Europe and China

The increase in consumption in emerging markets such as China, India, Japan, Brazil, Russia and Eastern
10 Europe is seen as an opportunity for the wine industry until 2025, along with growing wine tourism, cellar
door visits and consumer engagement

4 | Global Wine Industry Outlook 2019|August 2019

 Global trade survey
respondents at a glance
Wine industry professionals from over 50 wine markets were
invited to participate in an online survey and depth interviews

Organisation type: Global and by top five countries

% who work in the current organisations
Base = Trade experts representing 52 markets (n=296) Trade members representing the following
top five markets

296 113 108 74 71 71

Wine producer 36% 39% 41% 64% 52% 51%
Marketing agency & Consultancy 23% 27% 23% 21% 23% 21%
Importer & Distributor 12% 8% 7% 5% 7% 6%
Retailer, Online retailer & On-premise operator 12% 10% 12% 3% 3% 7%
Trade association & Government 17% 17% 17% 8% 15% 15%

Wine markets covered by trade respondents

Canada
22%
Europe
56%

UK
36%

United
States
38%
China
24%

Asia
Africa 24%
Latin 10% Australasia
America 26%
21%

Source: Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 5

Wine industry trends
and forecasts

T
he wine industry confidence within the category and increasing particularly in terms of GDP growth
index is calculated based on wine consumption in many emerging and reducing unemployment rates.
each trade member’s answer to markets. According to the most
the four items regarding overall wine recent IWSR dataset, the global wine Moving forward, trade respondents
industry trends and forecasts: market value has increased by 1.2% in note that the wine industry will
the past year, while the total volume continue to be increasingly dependent
1. Business conditions: of wine consumed has decreased by on the expansion of e-commerce and
Changes in outlook for the 1.7%, with quality-driven consumers online sales, which will likely drive
global wine industry for the being the main drivers of this change. sales across the world.
next five years Another potential reason for this is
2. Commerce: Changes in the increase in disposable income Whilst currently offline wine sales
wine commerce within the across the world, including dominant account for the majority share
next five years markets such as the US and China. of retail sales, trade respondents
3. Investment: Changes in Economically, the global performance expect growth of online wine sales
wine investment within the is currently relatively strong, around the world to continue. More
next five years
4. Employment: Changes in
employment opportunities Wine industry confidence index
in the wine industry over the Base = Trade experts representing 52 markets (n=296)
next five years

The index ranges from 0 to 100 (100

= the trade member is extremely
confident about the outlook of the
wine industry and 0 = the trade
member is not confident at all about
the outlook of the wine industry).

Overall, future expectations for

the global wine market appear to
be broadly positive, with global
trade members more confident in
investment and commerce potential
compared with business conditions
and employment opportunity over
the next five years. The global wine 0 = Extremely low confidence
50 = Neutral
market is expected to grow, driven by 100 = Extremely high confidence
premiumisation trends, innovation

Wine Intelligence trade interview programme; IWSR 2018;

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

6 | Global Wine Industry Outlook 2019|August 2019

specifically, they anticipate an increase Wine industry confidence index:
in online platforms used to purchase
wine as well as more delivery services Top five markets
Base = Trade experts representing the following markets
via online platforms as consumer
demand for convenience continues to
surge. For example, US e-commerce
platform Drizly allows people to order
alcohol directly from local retailers for
delivery via the internet.

E-commerce potential is especially

strong in China, with just under
half of regular wine drinkers having
purchased wine online in the past
six months. This is primarily driven
by wider and more diverse offerings
online compared with those available
in-store and the widespread use of the
social media platform WeChat.

At a country level, overall confidence

surrounding the outlook of the
0 = Extremely low confidence
wine industry is similar across the 50 = Neutral
top markets that the global trade 100 = Extremely high confidence
respondents represent. Trade members
that conduct business in China have
the highest confidence score for the organisations are the most confident
global wine industry, which is based on regarding the outlook of the wine
China having the highest ratings for industry, driven by high confidence
global commerce, investment potential levels, commerce and investment.
and employment opportunities. The least confident ratings come
from importers and distributors who
Trade members involved in trade rate future business conditions and
“The speed of change
associations and government employment opportunities poorly.
towards online sales
has been a surprise
over the past year“

– Commercial Director,
“E-commerce and online isn't going to slow down – those Argentina
are the building blocks of our business moving forward”

– Off-premise retail manager,

Australia

Wine Intelligence trade interview programme; Wine Intelligence China Landscapes 2019
Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 7

 Wine style opportunity

T Wine style confidence index

he wine styles confidence index is calculated based
on each trade member’s answer to questions Base = Trade experts representing 52 markets (n=296)
regarding growth opportunities for the following
styles of wine: red, white, sparkling, rosé and flavoured
wine. The index also ranges from 0 to 100 (100 =
the trade member is extremely confident about the
wine style opportunity, 0 = the trade member is not
confident at all about the wine style opportunity).

Sparkling wine growth has taken many developed

markets by storm over the past decade.
Unsurprisingly, sparkling wine is believed to deliver
the highest opportunity according to the trade, with
Prosecco driving this sparkling wine opportunity.
French Champagne is also predicted to grow due to
lowered price points and consumers becoming more
connected to the sparkling category overall.

Following closely behind sparkling wine is rosé. Most

specifically, rosé from Provence is the foundation for
the category, with the key focus being on younger
consumers. With sparkling and rosé wine on the rise,
0 = Extremely low confidence
trade experts expect major opportunity from these 50 = Neutral
categories. 100 = Extremely high confidence

“The positive surprise for me is the growth in

Champagne. I love the fact that it, and the “Prosecco and sparkling wine are now so
story, is getting out there. What does worry me dominant that they have made sparkling
is that two to three years ago, the cheapest democratic. The key is that they target younger
Champagne you could find was just under $40, consumers and females, who are the most
and now we have let it go to under $20 and it’s important new targets”
happened so quickly”
– Wine Marketing Director,
– International Manager, Spain
Australia

Wine Intelligence trade interview programme;

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

8 | Global Wine Industry Outlook 2019|August 2019

 Packaging opportunity

I Wine packaging opportunity

n a world where material science is
developing at an extraordinary rate, % who find the following packaging types to have growth opportunity
Base = Trade experts representing 52 markets (n=296)
and packaging in adjacent categories
is evolving rapidly in line with this, the
future of wine packaging is a key focus. Lighter weight glass bottle (75cl, 250ml or 187ml)
Can (250ml or 187ml)
Bag-in-box / cask (1.5L, 2L, 3L or larger)
Standard 75cl glass bottles continue to 375cl half bottle
50cl bottle
account for the majority of wine sales; PET (250ml, 187ml or 75cl)
however, consumers are becoming Tetrapak
1.5L bottle
more aware that transporting glass 66%
12%
10%
bottles comes with a carbon footprint. 17%
This has the potential to make 22%
consumers seek more sustainable
26%
alternatives. Trade members also
predict that a ‘less is more’ approach
to wine packaging will appeal to 51%
consumers, especially with lighter 42%

weight glass bottles. Half of the trade

respondents believe canned wine will
present high growth opportunity due the canned wine drive is primarily especially popular amongst Millennial
to cans being lighter and typically driven by convenience, as noted in drinkers. The popularity of canned
produced with more recycled materials, our US Landscapes 2019 report, as wine is driven by the United States, as
requiring less cardboard and energy they allow people to bring a ready to suggested by our respondents, who
for transporting. For consumers, drink beverage to all occasions, which project this influence.

“For now, wine in a can is

“As ‘eco awareness’ increases,
“One of the greatest opportunities consolidating its path in the US, but
new packaging forms are an
in the next five years for the with the global cultural influence
opportunity space – maybe fiber
wine industry will be delivering that this country has, it is possible
bottles, a better plastic that breaks
convenience driven packaging and that this trend spreads beyond the
down or lighter weight glass?”
fulfillment” US”
– Vice President and
– Director of Insights & Innovation, – R&D Manager,
Director of Marketing,
UK Portugal
US

Wine Intelligence trade interview programme; Wine Intelligence US Landscapes 2019 and Wine Packaging Formats and Closures in the
Australian Market 2018; Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 9

Alternative wine type
opportunity

T Alternative wine type confidence index

he alternative wine type
confidence index is calculated Base = Trade experts representing 52 markets (n=296)
based on each trade member’s
answer to growth opportunities for
Sustainably produced 77.7
14 ‘alternative’ wine types, which
we have classified as Sustainable, Environmentally friendly 77.5
Organic, Lower Alcohol and other Organic 77.5
alternative wines (SOLA for short).
Lower alcohol wine 70.3
The index also ranges from 0 to
100 (100 = the trade member is Bio-dynamic 68.2
extremely confident about the SOLA Preservative free 64.6
wine type opportunity, 0 = the trade Vegan 64.6
member is not confident at all about
the SOLA wine type opportunity). Sulphite free 63.5
Natural 63.5
Overall, alternative wine opportunity Carbon neutral winery 62.9
index scores are positive, most
Fairtrade 61.0
likely due to the rise of ethical
consumerism. Alternative wine Cannabis infused 53.7
opportunity, as rated by trade No alcohol wine 53.5
members, is led by sustainably
Pet Nat (Petillant Naturel) 53.3
produced wine, followed very closely
by organic and environmentally Overall alternative wine index 65.1
friendly wines. When compared with
0 = Extremely low confidence
consumers, we found that there is 50 = Neutral
alignment between the trade and 100 = Extremely high confidence
consumers in the belief that organic
and sustainably produced categories
offer the greatest opportunity. The “The commitment and great effort of most producers to
trade also values lower alcohol produce sustainably has been a surprise. Sicily, as a matter of
wine and biodynamic wine much fact, has shown remarkable sensitivity towards this new social
more highly, while Fairtrade is responsibility and is the reason why many producers adopted
more important for consumers. In various measures to reduce the impact on the environment,
addition to ethical awareness, the rise from the vineyard to the bottle”
of moderation and health amongst
consumers has also been noted by – Vineyard CEO,
the trade, most likely driving the Italy
opportunity for lower alcohol wines.

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

10 | Global Wine Industry Outlook 2019|August 2019

 “I think the greatest opportunity in wine emphatically will be through the lens of organic,
biodynamic and sustainable products. I think that consumers are increasingly aligning
their consumption of other products – ie fruit, vegetables, eggs, proteins, fish – with their
other decision-making processes, and that can be anything from accommodation to
holidays to countries to sport, an ethos to the lifestyle holiday that combine activities that
are about health and well-being benefits. I think the next logical step is wine and other
beverages, particularly alcohols, will fit into this sort of decision making and alongside that
an exploration of organic, generic product and associated beverages”

– Independent Retailer,
Australia

However, moderation trends also

present a threat to the category, as
noted by the trade, as consumers
reduce their consumption of
alcohol.

An increase in interest in
sustainability in the wine category
amongst the trade is evident, “Consumers’ appetite
“There is a global
primarily with producers tackling for less alcoholic
consumer trend that
environmental and social issues wines (below the
alcohol management
surrounding wine production. For legal limit to be
is important and that
example, whilst a push for carbon considered as wine)
the consumer cares
neutrality may be an important goal and emergence
about it. Since this
for many companies, Lanchester of the non-alcohol
will continue, this
Group, a UK distributor, have category is an
makes the declining
achieved ‘carbon-minus’ status. This opportunity over the
consumption even
means they are able to produce more next five years, either
more problematic”
energy than they use. in the still wine or in
the sparkling wines”
– On-premise
Managing Director, – R&D Manager,
Germany Portugal

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 11

Innovation opportunity

W Wine innovation opportunity

ith rising competition
from other beverage % who find the following items to be the most innovative for wine
Base = Trade experts representing 52 markets (n=296)
categories and cannabis,
the requirement to innovate within
the wine industry is essential,
particularly for engaging Millennial
consumers.

Trade respondents were asked

where they thought innovation
would be most likely to come from
for wine up until 2025. The number
one opportunity identified by the
trade is alternative packaging,
driven by consumer demand for
portability and convenience.

Following closely behind alternative

packaging opportunity is enhanced
communication with consumers. In “One opportunity is
an increasingly competitive market, branding. Wine clubs
it is imperative for brands to and events are going
facilitate innovative communication to grow. Direct to
techniques in order to both keep consumer is a real
existing consumers committed as opportunity for wineries
“Different packaging
well as engage new consumers to and building a direct
formats that make
drive awareness levels. to consumer base. It
wine more relevant for
also offers a chance
different consumers are
The development of different to compete and talk
an opportunity”
styles of wine is also identified directly to consumers,
as a way to help wine keep its which is important.”
competitive edge. For example, – Commercial Director,
producers are brewing beer with Argentina
– Marketing Manager,
grapes, while others are developing Australia
wines with beer tasting notes or
vice versa, with their main aim
to attract consumers looking for
something a little different.

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

12 | Global Wine Industry Outlook 2019|August 2019

 Market attractiveness

C Top 15 most attractive wine markets to 2025

hina is considered the most
attractive wine market in the Size of words: Greater prominence given to markets
Base = All global trade respondents (n=296)
world by the global trade
experts, followed by the US and
Japan, which is expected until 2025.
Driven by continued growth and
demand, China is considered the key
market. The US is also seen as a very
attractive wine market, mostly due to
its size.

Emerging wine markets are

considered to have prospering
outlooks for wine including India,
Russia and Brazil. The increased
per capita consumption and the
markets with a trend of increased The UK wine market is considered
increased demand in the premium
consumption, currently low the least attractive market by wine
sector in these markets makes
consumption per capita, but with trade respondents, mostly due to
them attractive for wine producers
a large young population. We are the effects of Brexit on the UK
and distributors. Supporting
talking mainly of four or five economy, leading to this market
this, a Portuguese trade member
countries: China, India, Brazil, becoming harder to predict. The
notes, “I believe that the greatest
Nigeria, Mexico and eventually level of risk of a no-deal Brexit
opportunities will come from
Turkey”. has increased significantly since the

“China is clearly at a very different pace from all other

Our 7th
edition Global
markets. It is already one of the largest markets in the world,
Compass 2019 report and is preparing to become the No. 1 market. If there are
identifies the five most changes, especially in taxes and import easiness and inter-
attractive wine markets state transport, Brazil and India will be able to join China as
in the world as: the major world powers in wine consumption”
US, Canada, France,
Germany and The
Netherlands – R&D Manager,
Portugal

Wine Intelligence trade interview programme; Wine Intelligence Global Compass 2019 report;
Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 13

election of Boris Johnson as the Top 15 least wine attractive markets to 2025
UK’s Prime Minister. The UK trade Size of words: Greater prominence given to markets
Base = All global trade respondents (n=296)
body, the Wine and Spirits Trade
Association, has set out suggestions
for the government in order for
the beverage industry to continue
running as smoothly as possible in
the event of a no-deal Brexit:

• Secure free-trade agreements

with key partners

• Guarantee continued access to

a skilled workforce

• Retain the EU excise

movement and control system

Germany, Italy and France are seen

as less attractive markets due to the “Brexit will increase our costs, and we predict more trade
fact they are classified as mature disputes in international trade. We see these factors adding
markets, making it harder for new costs to the wine sector”
competitors to enter the markets.
As they are long-established wine – Director of Insights & Innovation,
producing and consuming countries, UK
these markets are stable and rigid,
making them less attractive for
innovation and new products or
producers. As these markets are
challenging for imported wine, “For German wine, I see opportunities in exports as there has
the opportunities are more seen in been a positive image change for German wine”
exporting wine from the respective
markets into the new emerging, – Managing Director,
attractive markets. According to the Germany
trade, the image of German wine has
changed in the past 10 years, which
has led to positive opportunity for
exporting these wines. The increased
demand for premium wines in “The macro economic outlook in the UK market is pretty dire,
emerging markets such as China, and we are going to need to battle harder for our share of
Brazil, Russia and India also offers the disposable income of the UK consumer”
opportunities for French and Italian
wine. – Brand Owner & Distributor,
UK

Sources: Decanter, Financial times, Wine Intelligence trade interview programme;

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

14 | Global Wine Industry Outlook 2019|August 2019

 Threats to the wine industry

O
ne of the main factors that Other alcoholic beverages are also
the industry is concerned posing a threat to wine as there is a
about is growing political shift towards spirits, craft cocktails
instability and trade wars, especially and beer.
between the major players of US,
Europe and China. Furthermore, The competition within the wine
Brexit is a factor that increases category is also a concern for wine “There will be an
uncertainty within the EU and may producers. An increased volume element of the survival
impact exporting countries for both of wine production globally leads of the fittest. I think
consumption in the UK and re- trade members to view that smaller there will be further
exports from the UK. producers will be pushed out by consolidation as there
larger wine producers who export are still too many
A further threat to the wine industry internationally and can offer lower businesses chasing too
until 2025 is increasing alcohol sales prices. As consumers are more few customers”
regulations. In Europe in particular, willing to trade up, wine prices
there has been a dual trend of are increasing due to wholesalers’ – Brand Owner and
reducing alcohol consumption increasing add-ons, which threatens Distributor,
by consumers, as well as by margins for retailers. UK
governments, with the first driven by
an increase in health consciousness,
and the latter driven by health
lobbies aiming to educate consumers
to consume alcohol responsibly and
diminish abuse.

“The current environment of trade tensions and looming tariffs, particularly between the
US and Europe, may pose a big challenge for all large wine growing countries in the EU.
However, it may also serve as an incentive to increase the efficiency of the European
wine industry. Especially the worrisome high dependency on subsidies that should be
significantly reduced”

– Wine Writer and Educator,

US

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 15

Most prominent threats to the wine industry to 2025
% of those who find the following factors to be the most prominent threats to the wine industry over the next 5 years
Base = All global trade respondents (n=296)

Threats

“As more people become engaged in wine, it’s not about loyalty
to a particular brand; instead, there is a tendency is to try a lot of
“In Europe, in different styles. That makes it hard for wineries to stand out given
particular, the the amount of variety that consumers have to choose from”
regulatory environment
is a threat. I think – Marketing Manager,
when we look at the Australia
Irish Health Bill and
health lobbying in
general, the danger is
if minimum unit pricing
catches on. Whether “I think that a threat to the wine industry is the rise of other
or not the health lobby beverages and the increased interest in the quick turn-around of
changes consumers’ things like spirits and beer. These products can be produced and
tastes will also affect consumed within a couple of weeks, versus products like wine
the category” which takes a year or more, effectively, to come to life. Wine
is more reliant on detailed agricultural practices than just the
– Managing Director, standard brewing techniques”
US
– Independent Retailer,
Australia

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

16 | Global Wine Industry Outlook 2019|August 2019

 Future opportunities
for the wine industry
T
he wine trade also sees future new innovative products into the
opportunities in wine until 2025. marketplace.
Consumers are increasingly “Importance of stories that support
looking for small, local, authentic The increase in consumption in the wine are an opportunity,
wine producers that can tell a emerging markets such as China, so going beyond the technical
story. This is in line with growing India, Japan, Brazil, Russia and quality of the wine to tell a story
wine tourism and cellar door Eastern Europe is also seen as that is memorable and shareable,
visits, as consumers become more an opportunity for the wine such as social responsibility that
experimental and willing to learn industry to 2025. A growing supports the brand, and label
about the category. production surplus and stagnating design that tells the story”
consumption in traditional wine
Millennials and their open-minded markets could be balanced out – Marketing Director,
attitudes provide opportunity as they with the growing interest in wine Spain
are less restricted by tradition and in those new markets.
enjoy experimenting which allows

Most prominent opportunities for the wine industry to 2025

% of those who find the following factors to be the most prominent threats to the wine industry over the next 5 years
Base = All global trade respondents (n=296)

Opportunities

Wine Intelligence trade interview programme

Wine Intelligence, Vinitrac® Global, wine trade members representing 52 markets (n=296)

August 2019 | Global Wine Industry Outlook | 17

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